Why TEMU Is Fast Taking Over Online Marketing

• The Story Of The Chinese Online Market Platform

Have you heard about the new Chinese Online market platform called Temu? This online market space which has been dominating online market in the Asia, Europe and America for many years is finally here in Nigeria. And it came in full force that it’s competitors have started panicking because of its many benefits and incentives.

Temu in Nigeria has quickly become a household name. Like many others, I found myself wondering why Temu seems to be everywhere. If you’ve been on Instagram, TikTok, or Facebook recently, chances are that you might have come across its ads promising irresistible deals on everything from trendy outfits to home gadgets. But what exactly is Temu, and why has it captivated Nigerian shoppers in such a short time?

Launched in 2022, Temu is owned by PDD Holdings, the parent company of the Chinese eCommerce giant, Pinduoduo. PDD Holdings, founded by former Google employee Colin Huang, built its reputation on offering low-cost products shipped directly from suppliers.

With headquarters in Boston, Temu has expanded aggressively into over 80 markets, leveraging on it’s Chinese roots and supply chain expertise. In January 2024, it was launched in South Africa. Its competitive advantage lies in its ability to offer products at prices so low that they rival wholesale rates.

Temu’s entry into Nigeria isn’t accidental. It is driven by a mix of demographic, economic and market factors. With over 200 million people, Nigeria’s population, the largest in Africa, represents a vast pool of potential customers. This demographic is not only massive but also young and increasingly tech-savvy.

Thanks to the proliferation of affordable smartphones, a significant portion of the population accesses the Internet via mobile devices. As smartphone penetration continues to rise, more Nigerians engage with eCommerce platforms, creating fertile ground for a digital marketplace like Temu to thrive .

Economic conditions further bolster the case for Temu’s expansion into Nigeria. Rising inflation and a depreciating currency have strained household budgets, forcing many Nigerians to prioritise affordability when making purchasing decisions. Temu’s core proposition of offering low-cost goods will naturally resonate strongly with many consumers.

While platforms like Jumia and Konga, have a foothold, the Nigerian eCommerce space lacks a dominant player capable of Temu’s scale or pricing power. Temu’s aggressive pricing and marketing, positions it to disrupt the market and potentially attract a substantial user base .

Additionally, the Nigerian eCommerce sector is experiencing rapid growth, driven by increased Internet penetration and rising smartphone adoption. In 2019, the country’s eCommerce market was valued at $12 billion and is projected to reach $75 billion by 2025. Furthermore, digital payment systems, which have seen increased adoption, are facilitating this growth by making online transactions more secure and accessible.

Temu’s foray into Nigeria has the potential to shake up the local eCommerce landscape. Temu reportedly spent $1.3 billion on Meta ads in 2023 as it encouraged users to “shop like a billionaire.” For context, that’s more money than Jumia, the Nigerian startup with the most venture capital raised, has managed in its history. This huge ad budget will enable it to outspend existing competitors like Jumia and Konga and could see it quickly capture a significant share of the market.

Platforms like Jumia, already focused on achieving profitability, may struggle to match Temu’s pricing strategy. Meanwhile, Instagram and WhatsApp vendors, who rely on informal imports, face an even tougher challenge. They lack the scale and resources to compete with Temu’s direct-to-consumer model.

However, Temu’s foray into Nigeria will not be without its challenges. Unlike asset-light Chinese operations like OPay, Temu must navigate Nigeria’s inefficient logistics system. Delivery delays, high shipping cost, and infrastructure challenges could affect its ability to sustain customer satisfaction while providing local competitors with a short window with which to plot their survival.

Nigerians are no strangers to Chinese brands. Companies like AliExpress and payment platforms like OPay and PalmPay have successfully established themselves in the market. Temu’s entry could signal a broader trend of Chinese brands leveraging Nigeria’s growing consumer market.

However, Temu’s expansion into Nigeria isn’t without risks. It faces lawsuits in Europe and the US over data privacy and anti-competitive practices. In June 2024, Arkansas Attorney General, Tim Griffin sued the eCommerce platform for violating the Arkansas Deceptive Trade Practices Act (ADTPA) and the Arkansas Personal Information Protection Act (PIPA). “Temu is not an online marketplace like Amazon or Walmart. It is a data-theft business that sells goods online as a means to an end,” a statement from Griffin read.

Meanwhile, Shein, another Chinese-backed eCommerce player, has sued Temu multiple times in both the US and the UK for copyright infringement. Ironicallly, Shein has also been on the receiving end of similar lawsuits. Furthermore, it is the subject of a class action suit in which the plaintiffs allege they received text messages advertising Temu without prior express written consent. A Temu spokesperson, however, denies the allegations contained in the lawsuit referring to them as misinformation and unfounded.

“We categorically deny the allegations and will vigorously defend ourselves. Our app permissions are clearly stated and are consistent with standard practices across the industry. We collect only essential data necessary to provide and improve our services, all of which is transparently disclosed on our website and within the app.”

At a time when Nigeria’s data protection laws and practices are under the microscope, Nigerian regulators need to watch its operations closely to ensure compliance with local laws.

Temu’s entry poses a crucial question: can it replicate the success of Chinese-backed fintechs like OPay in the eCommerce sector? While it has the resources to disrupt the market, sustaining profitability in Nigeria’s challenging business environment remains uncertain.

For now, Nigerians may enjoy the bargains Temu brings. Whether it becomes the next eCommerce giant or fizzles out under operational pressures will depend on its ability to adapt to the realities of doing business in Nigeria.

What makes Temu different: Temu is an online shopping app that has quickly gained traction worldwide. Originating from the parent company PDD Holdings, which also owns the popular Chinese e-commerce platform Pinduoduo, Temu focuses on providing low prices across various product categories. Think of it as a platform that merges affordability with variety, much like Shein, but with an expanded product range beyond just fashion.

The app’s user interface is designed to keep you scrolling, offering recommendations based on your browsing history and enticing daily deals that make you feel like you’re missing out if you don’t grab them immediately. Temu’s secret lies in its pricing strategy—it’s hard to resist a platform offering deals that seem almost too good to be true.

WHY TEMU IS SO POPULAR IN NIGERIA

If you’re based in Nigeria, you might have noticed Temu’s surge in popularity. Here’s why: Affordability: Temu’s price points are a significant draw in a market where budget-conscious shopping is essential. Nigerians are always looking for ways to stretch their naira further, and Temu provides access to affordable items that cater to diverse needs.

Product Variety: From fashion to electronics, home decor, and beauty products, Temu offers an extensive range of goods. This variety appeals to shoppers looking for a one-stop platform for their needs. Aggressive Advertising: Temu has mastered the art of staying top-of-mind through consistent advertising. Their campaigns are easy to notice and strategically targeted, creating a sense of curiosity and urgency among potential users.

Global Appeal, Local Relevance: While Temu is a global platform, it has tailored its marketing to resonate with Nigerian consumers, tapping into the growing trend of online shopping and the desire for convenience

–Isaac Abimbade

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