Americans are flocking to Temu, but they trust Amazon much more

Above all, one factor helps explain the sensational development of the online shopping market Ago since its inception in 2022: extremely low prices. As a result, nearly 6 in 10 U.S. online shoppers made a purchase in the last year on a shopping marketplace, according to a recent study commissioned by e-commerce marketing firm Omnisend.

But if Temu is to continue winning over the wallets of American customers in the coming years, it will need to build something that its giant competitor Amazon has countless of: customer trust. Only 6% of Americans surveyed said they trusted It more than Amazon.

These results, based on a survey of 1,000 U.S. online shoppers, highlight both the remarkable growth of Temu, which launched in the U.S. less than two years ago, and the steep climb it still faces in building trust enough to keep US customers coming back again and again for years to come.

Backed by Chinese e-commerce parent PDD Holdings, Temu has won the wallets of American customers through a combination of ultra-low prices, massive advertising spending, and frequent use of coupons and gamification tactics. Thanks to this tactic, the app can continue to grow in the US despite long delivery times, questionable product quality, and ruthless marketing that can border on spam.

Temu’s parent company, legally known as WhaleCo, counts its Boston office as its global headquarters. But as Fortune reported exclusively in April, Temu has few employees there and counts on large product and technology teams based in China.

Strong ties to China – coupled with questions about whether any of its traders use forced labor, as well as the country’s reliance on a century-old trade rule that eliminates tariffs on many shipments to U.S. customers – have led to increased scrutiny from by both U.S. lawmakers and agencies. . The U.S. House Select Committee on the Chinese Communist Party and some Republican senators are pushing for an investigation into Temu.

The Department of Homeland Security also recently said it would step up inspections of packages covered by the “de minimis” trade program favored by foreign e-commerce giants such as Temu and Shein, as well as some U.S. sellers that use foreign suppliers and manufacturers. (Supporters of the trade rule say it helps keep prices low for American consumers.)

As a result of US analysis, Temu is increasingly looking to new geographies for future growth, the Wall Street Journal recently reported. Much of this information may be welcomed by Amazon, the dominant online retailer in the US with approximately 40% market share. Company leaders are paying increasing attention to Temu, as well as its fast-fashion rival Shein. While Amazon has lowered some seller listing fees for cheaper clothing to attract sellers who can sell through these low-cost marketplaces, the tech giant is also doubling down on advantages it says it already has: fast delivery speeds and strong brand awareness and consumer trust.

Based on the survey results, this looks like a smart bet.

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