Temu has overtaken eBay to take second place in the rankings of the world's most visited e-commerce sites. Keep in mind that only two years have passed since it was launched, thus becoming one of the fastest-growing websites ever. 

This statistic, released by Marketplace Pulse, states that Temu is the only e-commerce company on the top 10 list created in the last decade.

The big players in the global e-commerce sector are well established, and the landscape has not changed significantly in recent years. Shein, Temu's often-compared rival, is close to entering the Top 20.

According to data from SimilarWeb, Temu.com receives nearly 700 million monthly visits. Only a quarter of that figure comes from visits in the U.S. - Temu operates in 79 countries.

By comparison, Amazon.com attracts 2.7 billion visits, almost all from U.S. users. Although it initially sold only in the U.S., Temu is now a global retailer, with the U.S. accounting for only a small part.

Temu is soaring 

PDD Holding, owner of Temu, has closed fiscal 2023 with double-digit sales and profit growth. Following the release of the results, the company's shares have risen 15% in value.

PDD Holding, the Chinese group that owns the Temu marketplace, closed the 2023 financial year with a turnover of 247.639 billion yuan (31.6 billion euros), almost double the previous year's figure. Shortly after reporting its results, the company's shares rose 15% in value on the stock exchange, where it has been listed since 2022.

The company's profit has soared to almost double the net result in 2021. Specifically, PDD Holding earned 60.026 billion yuan (€7.6 billion) at the close of 2023, compared to the 31.538 billion yuan (€4 billion) the company earned the previous year.

Although the group has maintained its strategy of not breaking down sales by business line, which makes it impossible to know the weight of Temu in the group's revenues, PDD Holding's platforms, which also include Pinduodo, represent 153.54 billion yuan (19.6 billion euros), compared to the 94.098 billion yuan (12 billion euros) it earns under the heading of “transaction services”.

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Temu has opened its marketplace to European merchants responsible for its product range, inventory management, and product shipping. These conditions are because Temu determines the final prices of products to the consumer.

Having snowballed with a consignment model, Temu also announced a site-to-site model earlier this year. In this alternative model, sales partners handle product shipping themselves. The new model allows international retailers to capitalize on Temu's local popularity. 

For its owner, PDD Holdings, the marketplace offers opportunities for faster delivery to Western consumers and the inclusion of larger items on its virtual shelves. Temu launched the new model this spring in the United States, where a significant portion of its orders are currently shipped locally. 

According to Zixia Yi, seller acquisitions manager, on LinkedIn, it recently became “officially open for business registration in EU entities, including those based in Germany, France, Italy, Spain, the UK and the Netherlands. " She speaks of “exciting news for EU sellers.”

To attract merchants, Temu currently charges no base fees or sales commissions. Sellers can even advertise on the platform for free. It is not yet known how long this introductory period will last.

Keep in mind that Temu prices are set based on a unique business model. Unlike Amazon, where third-party sellers have pricing power, Temu's suppliers operate differently. They compete to offer the lowest-priced products in the same category. Only 20 suppliers are selected, and they must ensure their prices remain the lowest.

Temu is bracing for impact 

Temu recently pointed out that there will soon be an economic recession that could spread to the rest of the world's countries. Chen Lei, CEO of Temu, one of China's e-commerce giants, warned in the presentation of results that its profits will fall in the future due to the slowdown in economic growth. 

These predictions have caused the company owned by PDD Holdings to experience its darkest day on the stock market since October 2022 with a 30% drop that has caused its owner, Colin Huang, the richest man in the country, to lose 14 billion dollars.

Temu is one of the most important companies in China and the world in terms of e-commerce and its leaders have launched a warning regarding the situation of the global economy in the short term in the presentation of the company's results. Chen Lei, the company's chief executive officer, warned in his appearance at the event where the firm presented its results that revenues and profits will “inevitably” fall due to the slowdown in economic growth.

Jun Liu, vice-president of Finance at PDD Holdings, the company that owns Temu, also reported that the growth rate will be affected by the situation in the country, which in recent years has confirmed itself as the great leader of the world economy. So, the words of these leaders must be taken into account. “In the last quarter, our revenue growth rate slowed quarter-on-quarter. Profitability is also likely to be affected as we continue to invest aggressively,” he said of the situation.

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