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

Above all, one factor helps explain the sensational growth of the online shopping market Ago since its inception in 2022: ultra-low prices. As a result, nearly six in 10 U.S. online shoppers made a purchase on the marketplace last year, 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, confirm both the remarkable growth Temu launched in the U.S. less than two years ago and the steep growth it still faces while building enough trust to keep U.S. customers they come back to us again and again for many years.

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 spend and frequent use of coupons and gamification tactics. This strategy has allowed the app to continue to grow in the US despite long delivery times, questionable product quality, and ruthless marketing that can border on spam.

Under its PDD subsidiary, legally known as WhaleCo, Temu says its global headquarters is an office in Boston. 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 China’s dependence on century-old trade rules that eliminate tariffs on many shipments to US customers – have led to increased scrutiny from both US lawmakers and agencies alike. . 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 analysis carried out in the USA, Temu is increasingly looking at new geographical areas for future growth, i.e “Wall Street” daily reported recently. Much of this information could be welcome news for Amazon, the dominant online retailer in the U.S. with about 40% of the 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 lower-priced 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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