Online retailer Temu sees strong demand from South African customers

Global online retailer Temu has been well-received by South African customers and its local business has grown significantly since its launch.

Temu, which debuted locally in January, has more than 400 million app users worldwide and was the most downloaded app in the first quarter of 2024. In June alone, the app was downloaded more than 50 million times worldwide, making it more popular than the Amazon Marketplace app, according to research firm Statista.

Temu’s business model is based on a multi-segment marketplace where listed third-party sellers offer a wide range of product categories, including fashion, home goods, appliances, toys and electronics.

The e-commerce platform, owned by Chinese e-commerce giant PDD Holdings, says it has seen rapid growth across the 71 markets it operates in by offering affordable products and using effective marketing campaigns.

“We have seen strong demand from consumers in SA. Shoppers tell us they enjoy access to high-quality products at affordable prices,” says a Temu spokesperson.

“Household goods are some of the most popular products on Temu. But because we offer general merchandise in over 200 categories, we attract local customers with a variety of needs.”

The online retailer says it cannot disclose any growth figures.

In the past few years, new online retailers have emerged and shaken up the local landscape with inexpensive, made-in-China products and free shipping. These include Shein, Wish, Made-in-China and Sunsky.

This has caused local online retailers and the manufacturing sector to express concern about the actions of Chinese multinational corporations disrupting e-commerce, complaining of alleged anti-competitive practices.

The Chartered Entrepreneurs Institute and South Africa’s largest online retailer, Takealot, are among those calling on the government to introduce legislation that aims to create a level playing field that supports national localisation efforts and protects the sustainability of the local manufacturing industry.

“We are fully committed to complying with the relevant laws and regulations in the markets in which we operate, and South Africa is no exception. Our competitive advantage comes from our connection to cost-effective manufacturers and our experience in managing complex supply chains,” Temu tells ITWeb.

In the first five months of 2023, it generated more than $1.5 billion in gross merchandise sales, according to research firm Stastista, as it captured the attention of inflation-weary shoppers around the world.

“By focusing on offering affordable products with free and fast shipping, Temu has emerged as a wallet-saving alternative in the face of rising inflation,” the statement reads.

Discussing its strategy in South Africa, the company said it is still analysing local consumer preferences and intends to continue expanding its product categories, as well as offering free shipping worldwide.

“At this early stage of our operations in South Africa, our priority is to understand consumer preferences so that we can tailor our services to their needs. At Temu, our mission is to offer consumers access to high-quality, affordable goods by connecting them directly with cost-effective manufacturers and cutting out the middlemen,” says a Temu spokesperson.