Low-cost eCommerce startup Temu expands to Japan following a successful launch in Europe

Back in April, we wrote about Temu after the ultra-low-cost e-commerce platform startup owned by Pinduoduo made its debut in Europe following a successful U.S. launch. The move was part of Temu’s push to make inroads into the overseas market and challenge Amazon.

Now, just two months later, Temu has expanded into Japan, marking its first foray into the Asian market. On visiting its website, users can now find Japan listed as one of the countries to which they offer shipping services. This drop-down menu indicates that Temu has expanded its reach and customers in Japan can now benefit from their shipping options.

Temu, a sister site of the Chinese discount e-commerce platform Pinduoduo, offers a wide range of products at affordable prices. Its inventory includes clothing, accessories for women, home products, and pet supplies, among other categories. The platform focuses on cross-border trade, allowing customers to access low-cost products from various locations.

Since its launch in the United States in September, the Boston-based Temo has experienced remarkable growth, expanding its presence to 22 additional countries. Its European expansion covers customers from France, Germany, Italy, The Netherlands, Spain, and the United Kingdom. In many of these countries, Temu has achieved top rankings in app download charts, indicating its widespread popularity.

Temu’s unique model has resonated particularly well in Western markets, where consumers are grappling with rising inflation and a cost-of-living crisis. The platform’s ability to offer affordable options has struck a chord with consumers, contributing to its widespread success and popularity.

Temu first made a big splash in the US last September, selling shoes, jewelry, beauty accessories, and home goods, most of which come from overseas, especially from China. Temu said shipping to the U.S. could take 7-15 business days. But the wait could be worth it. For example, Temu offers dresses for as low as $6 and an $8 handbag and $10 sneakers. Shipping is also free for orders over $49.

Temu’s cross-border approach drove Shein, which delivers to more than 150 countries, to become the world’s largest fast-fashion brand, with more than $58.5 billion in annual sales.

According to mobile intelligence firm Sensor Tower, Temu, which is located in Boston, witnessed 19 million U.S. downloads in the first quarter of this year. Temu is also the most downloaded software on the Apple and Google Play stores in the United States.

“It’s important to keep in mind that you may see longer delivery times than you’re used to from other e-commerce websites. This is due to the fact that items that may be coming from another country or need to be bundled or packaged with other similar-sized items,” the website says on its shipping information page.

In a conference call with analysts this week, Pinduoduo Chairman and CEO Chen Lei confirmed the company was aiming to expand its business overseas but did not mention the US launch.

“Overseas business is one of the opportunities that we see,” Chen said. “At the same time, we also see that many peers in the industry are achieving good results. So we believe that it is a direction that is worth trying out.”

Meanwhile, it’s too early to tell how Temu will be received by US consumers. Temu’s “main challenges will be cultivating trust and awareness among customers,” Jacob Cooke, CEO of WPIC, an e-commerce tech and marketing firm that helps foreign brands sell in China, told CNBC.

Pinduoduo was founded in 2015 by former Google employee Colin Huang. The e-commerce company has been dubbed “China’s Groupon” and a cross between “Costco and Disneyland.” We first covered Pinduoduo in 2018 after the then-eCommerce startup raised about $24 billion in valuation in IPO. The company was backed by Tencent and Sequoia Capital.