What you need to know about Temu
What you need to know about Temu
The #1 Shopping App in the US is the brainchild of a Chinese company
That orange ad to “Shop like a billionaire” that aired in the Super Bowl?
It’s the top shopping app in the app store, with more downloads since October than Walmart and Amazon.
It’s called Temu (“tee-moo”). Here’s what you need to know:
Temu is the brainchild of Chinese giant PinDuoDuo (PDD). PDD is known for “social shopping,” where if more people buy something, it’s cheaper. Temu doesn’t focus on that. It relies instead on:
Being Cheap
Peace of Mind
Heavy Marketing
Optimized Funnel
VECTOR 1: BEING CHEAP
Temu is much cheaper than Amazon:
iPhone Charger: $8.98 vs 14.99
6 in 1 Lip Balm: $2.69 vs $9.99
20w Charger: $4.98 vs $11.99
Surge Protector $12.48 vs. $15.99
It’s operating in the deals space: it’s more like Wish than Amazon.
That means it’s price > quality. The app has a mere 3.1/5 out on TrustPilot. The reviews:
“It’s junk”
“Products misrepresented”
“Cheap and sizing is way off”
A search for “Nike socks” reveals $2 off brand socks. Temu operates more in random deals than necessities.
VECTOR 2: PEACE OF MIND
What is the barrier to users trying a new e-commerce site? Shipping and returns. Temu offers both for free. This helps provide peace of mind for users. Even if the product is junk, they can always return it. This gets people to try.
You can even buy one $2 item - and get free shipping! There is NOWHERE else on the web you can do this. Most e-commerce sites have $25+ order minimums. By covering shipping on a small order, Temu is losing money on that order in the hope of keeping you for future one’s.
VECTOR 3: HEAVY MARKETING
Temu makes heavy use of marketing channels like push and email. On the push side, reviewers complain of “notification overload.” Same with email: “So tired of receiving 3-4x emails per day.” Temu is a heavy marketer.
It all comes down to the LTV / CPA equation. Temu paid a high Cost Per Acquisition (CPA) for users with ads. So, to compensate, it increases the Lifetime Value (LTV) of those users. Channels like push and email help it get there.
VECTOR 4: OPTIMIZED FUNNEL
Temu uses every shopping app’s growth funnel optimizations. Some of the highlights:
Logged out experience
Marketing SMS pop ups
Time-limited deals
and Expiring cart
Each one of these compounds to improve the conversion rate of visitors.
The logged out experience helps users see the selection before signing up.
The marketing SMS opt in pop ups open a new marketing channel.
The time limited deals create FOMO.
And the expiring cart encourages you to shop before time runs out.
Temu uses every trick.
Only time will tell if Temu’s Super Bowl ad will pay off. Many of last year’s advertisers are not doing well:
Coinbase: stock down 66%
FTX: massive ponzi
Carvana: stock down 92%
Neither is Wish, with its stock down 97% from the IPO price.
PDD’s betting Temu’s being cheap, peace of mind, heavy marketing, and optimized funnel will help avoid the fate of Wish and prior Super Bowl advertisers.
I, for one, am skeptical.
Product Managers and JIRA
The unfortunate reality is that there is an inverse relationship between how long you spend in JIRA and how much product management you are doing.
JIRA can be a useful tool for project management, but product managers should be spending most of their time influencing, writing specs, understanding data, and learning about users.
JIRA is great. Too much JIRA is not.