It attracts more repeat customers than eBay, putting pressure on Amazon – Daily Bulletin

Chinese e-commerce startup Temu attracts more repeat customers than eBay Inc., an e-commerce pioneer that has been in business for nearly three decades. An April survey of 1,000 consumers found that 34% of respondents buy something from Temu at least once a month, better than 29% on eBay. Amazon.com Inc. remains an outstanding leader. (Bloomberg photo: Lam Yik)

Spencer Soper | Bloomberg

Less than two years after its U.S. debut, Chinese e-commerce newcomer Temu is attracting more repeat customers than eBay Inc., an e-commerce pioneer that has been in business for nearly three decades.

An April survey of 1,000 consumers found that 34% of respondents buy something from Temu at least once a month, better than 29% on eBay. Amazon.com Inc. remains the clear leader – according to London-based online marketing company Omnisend, which conducted the survey, more than three out of four respondents say they shop there at least once a month.

Ago, a unit of PDD Holdings Inc., advertises and offers deep discounts to lure customers who order products directly from China and typically wait a week or longer for them. The company ran two ads during the Super Bowl with the slogan “Shop like a billionaire” and is ubiquitous on social media. Burning money on expensive marketing and profit-oriented discounts is a time-worn and risky startup strategy. The key to longevity is convincing first-time customers to become loyal customers — and Temu appears to have cracked the code, at least so far.

“It just goes to show how aggressive marketing for Temu — like Super Bowl ads and social media campaigns — is paying off,” said Greg Zakowicz, senior e-commerce expert at Omnisend, which conducted the survey to compare sentiment toward incumbents , such as Amazon and Walmart. Inc. with the perception of Chinese newcomers such as Temu and Shein. The margin of error was plus or minus 3 percentage points.

The post-pandemic price spike has ushered in significant changes in consumer behavior, so now is a good time to check the pulse. As recently as 2022, more than half of U.S. purchases began on online platforms such as Amazon, according to an annual survey conducted by EMarketer. Last year, only 40% of purchases started there. Nearly 30% of shoppers started their purchases on search engines like Google, up from 25% the previous year.

The shift to search engines shows how bargain-hungry customers want to browse multiple retail sites and platforms to compare prices, opening up an opportunity for upstart discounters.

In a statement, a Temu spokesman said: “We are pleased that American consumers trust Temu’s factory-direct model for affordable products,” and added that the company conducts random inspections and takes other actions to address quality issues. An Amazon spokesperson said the company continues to innovate “to offer the best selection, best quality and convenience, low prices and fantastic deals, fast delivery and a range of great benefits for Prime members,” adding that for seven years in a row, Amazon has offered “the lowest prices among all major U.S. retailers,” according to an independent study. eBay did not respond to a request for comment.

Omnisend also asked respondents to rank their sources of dissatisfaction in each market, with options including pricing, poor product quality and long delivery times. There were sharp contrasts between Amazon, which performed poorly on pricing, and new discounters such as Temu, which were criticized for product quality and speed of delivery.

Prices have been a major source of consumer dissatisfaction with Amazon, suggesting that deals – rather than fast delivery – have become a priority for a large percentage of inflation-affected consumers. This could be disturbing news for a company that has spent tens of billions of dollars to ensure customers receive many products within two days or less.