Temu hopes to be more like Amazon, in order to reduce supply chain risks and provide faster delivery; while Amazon is imitating Temu, because it cannot ignore the fact that some consumers value low stock price over convenience.
Due to changes in the regulatory environment and other factors, Temu, a cross-border e-commerce platform under pdd holdings, is undergoing significant transformation in its strategy in the US market, gradually approaching Amazon's localization operation mode.
According to reports, Temu is currently vigorously developing sellers in local warehousing in the United States, which contribute about 20% of the platform's GMV.
Firstly, this will effectively avoid potential policy risks. Previously, the media reported that Temu and other platforms extensively used the "de minimis" rule, which involves sending goods directly from China to US consumers with a unit value of less than $800 without paying any tariffs.
However, this practice has aroused the attention of the US Congress and may even face the risk of embargo. By developing local warehousing, Temu can maintain business stability when policies tighten.
Secondly, localized operation can relieve logistics pressure. With the vigorous development of cross-border e-commerce in China, freight costs have risen sharply and the cost advantage of direct shipping model has been weakened. Local warehousing can provide faster and more stable distribution services while expanding commodity categories, such as large furniture.
Moreover, this strategic transformation enables Temu to attract more high-quality sellers. It is reported that many Chinese sellers who have performed well on the Amazon platform have joined Temu's local warehousing project. For example, well-known electronic product brand Anker and furniture merchant Costway offer more competitive prices on the Temu platform than Amazon.
However, Temu's transformation also faces challenges. The first is how to balance the interests of new and old sellers, and some Chinese suppliers have reported affected sales volume. Secondly, local operations require higher logistics and management costs, and how to maintain price advantages is a major challenge.
At the same time, Amazon is also testing a low-price product sector similar to Temu, planning to directly ship goods from Chinese warehouses using the same "de minimis" rule. This alternating competition highlights the intensity of the China-US cross-border e-commerce market.
Juozas Kaziukėnas, founder of Marketplace Pulse, told the media:
Temu hopes to be more like Amazon, in order to reduce supply chain risks and provide faster delivery; while Amazon is imitating Temu, because it cannot ignore the fact that some consumers value low stock price over convenience.
Overall, Temu's strategic adjustment reflects the flexibility and adaptability of Chinese cross-border e-commerce platforms in the globalization process. Under the multiple pressures of policy risks, rising logistics costs, and intensified market competition, the key factor determining Temu's future development is how to improve service quality while maintaining price advantages.