The Truth About Temu, America's Most Downloaded New App (2023)

Tmostdownloaded free appin the App Store and Google Play most of the last two months hasn't been TikTok, YouTube or Instagram, but a shopping app that didn't exist four months ago.

Temu offers deep discounts on a large number of products, most of which are shipped directly from Chinese factories or warehouses. In addition to the incredibly low prices, Temu can certainly attribute its popularity to its strategy of giving free content to users who promote the app on their social media and getting friends and family to sign up.

But the company, the US arm of Chinese e-commerce giant Pinduoduo, is also starting to make a name for itself for undelivered packages, mysterious fees, wrong orders and indifferent customer service. Temu has already been the target of more than 30 complaints to thebest office, and has a BBB customer rating of less than 1.5 stars.

"They make delivery promises and people don't get their stuff when they're supposed to," Melanie McGovern, BBB's director of public affairs and social media, told TIME.

When contacted by TIME, the company did not directly address questions about customer complaints or concerns about the BBB.

Temu's business model, if caught on, could also have a major impact on U.S. retailers and the global supply chain in the coming year.

What is Temu and how does it work?

At first glance, Temu might make some users wonder if it's legit. In addition to really cheap consumer goods, Temu has the opportunity to earn credits by spinning the wheel or persuading his friends to participate. In recent months, posts praising Temu have spread like wildfire across Facebook, Twitter, and TikTok, though many of them use appreciative language that seems to be recycled from post to post.

But for now, Temu is a very real platform, offering a variety of genuine products at deep discounts, from deep fryers to Lenovo wireless headphones ($8.98), computer keyboards ($15), and clothing ($15). $1.69 for five pairs of socks). . Users who turned to Temu as their Christmas shopping lifeline this month vs.highest inflation in a generationbecame one of the fastest growing platforms in the US.

What does Temu sell?

The better question is what TemuNOsell. Users of Temu's website or app are immediately overwhelmed with offers of all kinds: running shoes for $17.48, universal keys for $4.48, talking hamster toys for $6.99. A banner shows items discounted up to 90% thanks to the New Year sale. The selection of items and prices is remarkable, and the site's aesthetic feels like a dollar store.

Temu offers extremely low prices on a variety of cheap consumer goods, shipped directly from Chinese factories and warehouses.

(Video) TEMU Taking Over U.S. - Is it the Amazon Killer? New Tech #amazon

Return

But the strategy makes sense considering Temu is a "sister company" of the Chinese e-commerce giant.pinduoduo, which has offered similar offerings in China in recent years. Pinduoduo has found success in China by selling heavily discounted products directly from manufacturers to low-income buyers, as well as selling products to farmers. the company nowhas a market cap of $102 billion, and its stock price rose in a year when competitors like Alibaba were hit hard.

Pinduoduo launched Temu in September to target the US market and Temu's site includes an office in downtown Boston. A Temu spokesman responded to TIME's inquiries with a statement from its website: that the company's pricing is enabled by a "deep network of dealers, logistics partners and [Pinduoduo's] established ecosystem that has been built over the years."

How do people get free stuff in Temu?

Although Temu's prices are cheap, many new customers pay nothing. That's because Temu has launched a social media campaign where the more you convince others to sign up, the more credit you earn. This allowed some people who had earned enough credit to obtain household items without even giving Temu their credit card information.

"It looks like they're being subsidized to become a loss leader, to gain market share, which isn't too different from what Amazon has been doing for a long time," says Douglas Schmidt, a professor of computer science at Vanderbilt University.

Brianna Lukey, who lives in Fort Worth, Texas, says she received $200 worth of free Temu items. He first heard about the app from a friend a month ago and was wary at first: "I know there's a lot going on that might not be legal," he says. "But that was."

Lukey has posted about Temu on Facebook, TikTok, and Snapchat and eventually convinced his friends to join the app, earning a ton of credits in the process. She used them to buy a ring light (priced at $25.48) for her small plaster art shop, Array of Aura's, as well as an oil diffuser ($5.48), several necklaces, and a mouse and keyboard for her daughter (age 19). $.98) to order. Lukey says the keyboard works well: "I didn't expect it to be of such good quality. But it's really nice because it's free,” she says. "I'm grateful for that."

Temu may have given Lukey many items without giving any money in return, but in return the company gets free publicity through Lukey's social network. Temu is marketing the campaign as a way for communities to come together to save money: their tagline is "gear up, price down."

The strategy seems to be working: when Lukey posted a photo of his Temu shipment on Facebook, his post was soon inundated with 70 comments from his Facebook friends, mostly made up of people posting their own recommendation links with Hope for similar rides. .

What's the catch?

However, one of the comments on Lukey's post was significantly less positive than the rest. Julie Roper Malloy wrote that the package of Christmas gifts she ordered from Temu never arrived, despite the company's promise to deliver it by December 19th had arrived. “Still waiting for my November order! Thanks Temu, you ruined Christmas!” she wrote.

In a series of Facebook posts with TIME, Roper Malloy says he spent $178 on Temu gifts for his family, including two drones and some makeup for his daughter. But the things never arrived. Roper Malloy says he has contacted the company multiple times to request a refund, which is pending. "I will definitely be more diligent when ordering online in the future," he wrote. [Update: After this article was published, Roper Malloy received his Temu orders and a refund from the company.]

Roper Malloy isn't the only one having trouble with a Temu order. Temu himself admits that his orders take longer than Amazon's, typically 7 to 15 business days, as they come from "overseas warehouses". But it looks like Temu is also struggling to deliver within this larger timeframe. In October, the Boston branch of the Better Business Bureau opened a file on Temu and received 31 complaints about the site.

Temu currently has a C rating on the BBB and an average customer rating of 1.4 stars out of 5, but only from 20 reviews. (Complaints are separated from ratings, which do not take into account the official BBB rating.) BBB's McGovern says it's unusual for such a new company to receive so many complaints in such a short period of time. She notes that while Temu has acknowledged and responded to all complaints posted on the BBB website, many of those complaints remain unresolved.

Temu's sister company, Pinduoduo, haslong accusedvonhosting salesof counterfeit, illegal products or products that do not match their descriptions. (Pinduoduo wrote in its SEC filings that it immediately removes unauthorized products or misleading information from its platform and freezes the accounts of sellers on the site who violate its policies.)

There have been no complaints from the BBB claiming that the products shipped from Temu are counterfeit or counterfeit.

Also, in 2021, the death of two Pinduoduo employeesdrove investigations and boycottsabout the company's working conditions, according to New YorkMal.

How Temu can affect the US economy

Vanderbilt's Schmidt, a security and privacy expert, says Temu's data and privacy practices are not uncommon: The company collects a lot of personal information about users and distributes it to sell ads. However, he says the rise of Temu could have a bigger impact, not in terms of privacy but in terms of pressure on American businesses and workers.

As more American consumers flock to Temu to buy products at discounted prices, it could put pressure on Amazon and other competitors to lower their prices as well, which would hurt wages, argues Schmidt.

“This is an interesting example of how the manufacturing base in China is so mature that you no longer feel the need to go to distributors. They sell directly to consumers. And there are a lot of people who are suffering financially and are looking for a bargain,” he says. "Obviously, this will put pressure on commodity makers to further lower their cost base and profit structure, which could lead to further erosion of domestic manufacturing in the US."

Correction, December 29th

The original version of the story misrepresented the relationship between Temu and Pinduoduo. Pinduoduo is not Temu's parent company; both are subsidiaries of Pinduoduo Inc.

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