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      Temu the Rising Titan of Shopping Apps 

      Vincent L. by Vincent L.
      1 year ago
      in All, Android, Feature, Industry, iOS, Mobile Phone
      Reading Time: 3 mins read
      0 0
      Temu the Rising Titan of Shopping Apps 

      Unedited Image Credit: Temu

      Share on FacebookShare on TwitterShare on TelegramShare on WhatsappShare on Reddit

      Temu, a Chinese 2022 online marketplace newcomer, is a driving force that altered and shifted the shopping app market landscape last year in drastic ways.

      In an analysis shared by mobile app analyst AppMagic, the shopping apps market had a surprising shift in 2023, ending its plateau of roughly 4 billion downloads that had persisted for several years prior with a noticeable 10% increase.

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      Image Credit: AppMagic

      According to AppMagic, the changes in the shopping app landscape are largely contributed by Temu, but also by fast-fashion app Shein with a less pronounced effect.

      As seen in the graph above, Temu and Shein have dominated the shopping apps industry, significantly influencing future market share redistribution globally.


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      However, this impact differs depending on region as primarily attributed to how each app adopted distinct regional approaches.

      Image Credit: AppMagic

      Based on AppMagic’s data, Temu has been actively moving into the West beginning in Fall 2022 and securing the No.1 spot in the Top Free Downloads chart by Summer 2023.

      It was noted that their stronghold includes markets the likes of the USA, Canada, Australia, New Zealand, Germany, Italy, the Netherlands, and the UK.

      In contrast, the market app’s ranking is seen to remain modest in regions which is not actively targeting.

      Image Credit: AppMagic

      On the other hand, Shein operates globally and excels especially in Tier-2 markets such as Portugal, Hungary, Romania, Brazil, and the Czech Republic.

      Business Model Showdown

      Temu

      Established by its China-based parent company PDD Holdings, Temu is one of the first significant global expansions by a Chinese company where even Alibaba’s AliExpress and JD.com’s Joybuy have yet to match its impact on the global market.

      AppMagic comes up with several key aspects that made Temu such as a powerhouse in the online marketplace industry.

      1. Business Model: Temu operates a B2B2C model, serving as more of a bridge between suppliers and consumers, allowing the sellers to focus on production while the market app handles product listings, marketing, and logistics.
      2. Logistic Model: Setting apart from traditional retailers, Temu does not stock products in the USA and orders shipped directly from China, saving up hundreds of millions of dollars in customs duties.
      3. Affordable Products: The marketplace offers over 200 categories of products, with many sold at wholesale prices.
      4. Marketing Strategy: Temu invests approximately $500 million in marketing each quarter, which includes Super Bowl ads, social media campaigns, influencer marketing, and customer referral incentives.
      Image Credit: Shein

      Shein

      Aside from Temu, another online marketplace that affected the shopping app market growth in 2023 is Shein, which got a total download of 216 million as compared to Temu’s 337 million installs.

      The two apps may seem alike at first glance, but Shein differs in business models and instead, operates as an online megastore.

      In comparison, Temu utilizes the B2B2C business model, while Shein adopted the first-party model, holding ownership of its inventory and partnering up with manufacturers.

      Although Shein does not own factories, its substantial order volume positions it as a primary customer, thus enabling it to keep product prices low.

      In 2023, Shein also expanded into introducing a third-party cross-category marketplace.

      Image Credit: Temu

      Based on the analysis, AppMagic concluded that both companies have successfully leveraged diverse regional strategies with effective business models.

      Both companies’ strengths lie in low-cost and diverse product ranges, data-driven strategies, and effective supply chains, enabling them to secure and maintain their position in the global market.

      However, AppMagic noted that sustainable consumption and conscious shopping are on the rise and the market app trend might shift again.

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      Vincent L.

      Vincent L.

      Short Bio: A geek with a passionate love for games, arts and creativity. Graduated with a Bachelor's Degree in Game Design and always interested in all things within the game industries. Has an unhealthy obsession with Capcom games like Monster Hunter and Resident Evil.

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