{"id":12145,"date":"2024-03-27T15:40:53","date_gmt":"2024-03-27T15:40:53","guid":{"rendered":"https:\/\/dmsretail.com\/RetailNews\/the-attitude-behavior-gap-how-us-customers-accelerate-temus-success\/"},"modified":"2024-03-27T15:40:53","modified_gmt":"2024-03-27T15:40:53","slug":"the-attitude-behavior-gap-how-us-customers-accelerate-temus-success","status":"publish","type":"post","link":"https:\/\/dmsretail.com\/RetailNews\/the-attitude-behavior-gap-how-us-customers-accelerate-temus-success\/","title":{"rendered":"The Attitude Behavior Gap: How US customers accelerate TEMU\u00b4s success"},"content":{"rendered":"

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In the ever-evolving landscape of online retail, one newcomer is generating considerable buzz \u2013 Temu. With its rapid ascent in the US e-commerce market, Temu has caught the attention of both consumers and industry analysts alike. Surprisingly, despite being a relatively new player, Temu boasts an impressive 74% awareness among US consumers, positioning itself as a serious contender in the highly competitive arena dominated by giants like Amazon, Walmart, and Target. Based on a <\/span>representative survey<\/span> from market research agency Appino and Spryker, <\/span>40%<\/b> of Americans have <\/span>purchased <\/b>something from Temu<\/span> in the last six months<\/b>. However, 77% of the respondents who shopped at Temu in the last six months also answered that it\u2019s important to them that products are \u201clocally made in the US.\u201d How is this possible?<\/span><\/p>\n

The rise of Temu.<\/b><\/em><\/p>\n

What sets Temu apart is not just its rapid rise, but its intriguing appeal to older demographics. With an 80% awareness rate among boomers, compared to 70% among younger demographics, Temu\u2019s marketing strategy seems to resonate effectively with this often-neglected e-commerce segment.<\/span><\/p>\n

But awareness alone isn\u2019t enough to sustain success \u2013 we learned that from the Wish marketplace failure. Temu\u2019s ability to meet consumer needs and preferences is equally crucial. And here, Temu seems to be making significant strides. Take Target, for example, who started building its ecommerce presence in 1999. According to the aforementioned survey, 36% of Americans shopped at Target in the last six months. In those same six months, 35% of Americans shopped on Temu, which has only been in the market for a speedy yet impactful 15 months.<\/span><\/p>\n

Another factor contributing to Temu\u2019s rapid rise is its investments. With a <\/span>reported<\/span> $3 billion spent on online advertising in 2023, Temu has spared no expense in promoting its brand and attracting new customers. They also spent <\/span>tens of millions<\/span> of dollars on Super Bowl ads this past February. According to the data, which surveyed US consumers both before and after the big game, the ads didn\u2019t have any noticeable or \u201cviral effect\u201d on awareness or purchasing habits.<\/span><\/p>\n

The elephant in the room, however, is whether Temu has what it takes to challenge THE e-commerce industry giant \u2013 Amazon. While Temu\u2019s progress is impressive, it still has a long way to go before it can truly rival Amazon\u2019s dominance. Amazon\u2019s variety and convenience remain unparalleled, with 82% of respondents indicating that Amazon meets most of their needs, compared to only 26% for Temu. But why is Temu growing so fast? Is the old golden triangle of commerce (selection, price, and availability) not valid anymore? <\/span>Temu is obviously making compromises on availability (ten day delivery time) in order to offer much better prices. This is not something we have seen before.<\/span><\/p>\n

Temu found its niche.<\/em><\/b><\/p>\n

There are signs that Temu is gaining ground. Temu has managed to carve out a niche for itself, particularly among consumers who prioritize value for money and product variety.\u00a0<\/span><\/p>\n

In the past, speedy delivery was king but when faced with economic challenges, a more financially savvy customer emerges. The data found a high willingness from Temu buyers to wait longer in order to save, as 41% said it\u2019s extremely likely they would choose a longer delivery time for a lower price.<\/span><\/p>\n

Furthermore, and in contrast to many narratives, Temu\u2019s satisfaction ratings are also promising, with a significant majority of consumers rating its variety of choices, value for money, and website usability as very good. In fact, every second American that is familiar with Temu made a purchase in the last six months, suggesting a highly efficient market entry. The cohorts are stable \u2013 a very different image from what we saw with Wish. Temu is here to stay and will change the way we shop forever.\u00a0<\/span><\/p>\n

It\u2019s time for Amazon to worry.<\/b><\/em><\/p>\n

Here is the reality. No other retail platform has achieved comparable growth in the last 50 years. My prediction is that it will be just like when Amazon introduced its marketplace model: the big brands didn\u2019t want to sell via Amazon at first \u2013 but then realized that they had to sell where the customer is.\u00a0<\/span><\/p>\n

Today, almost all major brands have a direct relationship with Amazon. I expect the same from Temu. And Temu will sweeten the deal with particularly favorable conditions. This could lead to brands using this to renegotiate their terms with Amazon.\u00a0<\/span><\/p>\n

Until now, it has been very difficult for brands and manufacturers to get good conditions on Amazon. Now comes Temu, a platform that can promise access to the same customers for half the price. This is putting pressure on the Amazon margin like never before.<\/span><\/p>\n

Temu\u2019s rapid rise underscores the shifting dynamics of the e-commerce landscape and its potential to disrupt the status quo. Businesses can take this as a warning. It\u2019s not just Amazon and it\u2019s not just online retailers. Organizations across all industries are going to be faced with unexpected and unavoidable volatility in the near future. Agility will be the key to survival.\u00a0<\/span><\/p>\n

Alexander Graf is the co-founder and co-CEO of B2B e-commerce leader <\/span>Spryker<\/span> and co-author of <\/span>The E-Commerce Book<\/span><\/i>.<\/span><\/p>\n

Methodology: The survey was conducted from February 2nd to February 5th, 2024, by Appinio. A total of 1,000 individuals aged 16 to 65 were surveyed, nationally representative of the age and gender demographics of the USA population.<\/span><\/i><\/p>\n

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  1. 90% <\/b>of Americans are <\/span>ordering <\/b>from an online retailer at least <\/span>once a month<\/b> and almost half are ordering every week.\u00a0<\/span><\/li>\n
  2. Three out of four Americans have heard of Temu, <\/span>beating out Costco, Etsy, Shein<\/b>, and others that have been on the market much longer.<\/span><\/li>\n
  3. Nearly <\/span>40%<\/b> of Americans have <\/span>purchased <\/b>something from Temu<\/span> in the last six months<\/b>.<\/span><\/li>\n
  4. 55% <\/b>said it\u2019s very <\/span>important <\/b>to them that <\/span>products are made locally<\/b>. However, 77% of the respondents who shopped at Temu in the last six months also answered that it\u2019s important to them that products are \u201clocally made in the US.\u201d<\/span><\/li>\n
  5. Temu wants to reduce its delivery times \u2013 but do they need to? The data found a high willingness from Temu buyers to <\/span>wait longer for a similar product if it means a lower price<\/b>.\u00a0<\/span><\/li>\n
  6. Data pre and post-Temu<\/span> Super Bowl ad spend<\/b> questions if there is a \u201cviral effect\u201d from this marketing move.<\/span><\/li>\n
  7. 60% of respondents said Amazon has come up in <\/span>conversation with friends<\/b> or relatives recently. 35% said the same for Walmart, and 31% for Temu, beating out Target, Shein, and others.\u00a0<\/span><\/li>\n
  8. People shop as often at TEMU as they do at Target.<\/b> 36% of Americans shopped at Target in the last six months. In those same six months, 35% of Americans shopped on Temu, who has only been in the market for a speedy yet impactful 15 months.<\/span><\/li>\n
  9. Temu is <\/span>super successful with 45y+<\/b> with almost 39% active buyers.<\/span><\/li>\n
  10. Every second American that is familiar with Temu made a purchase in the last six months \u2013 suggesting a highly efficient market entry.<\/b>\"\"<\/b><\/li>\n<\/ol>\n

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