Direct-to-consumer manufacturers keen to search out prospects have a possibility with Temu, China’s quickly rising {discount} market.
In February 2024, Temu launched a U.S. Vendor Program, successfully opening the platform to American companies. This system provides U.S. manufacturers entry to an estimated 185 million home and worldwide customers every month — and rising.
In 2023, Temu turned Apple’s most downloaded free software and dominated the iOS and Android app shops in 2024.
U.S. Vendor Program
Temu, like its sister web site, Pinduoduo, operates totally on a consignment mannequin.
Chinese language and East Asian producers fill Temu’s warehouse with items and create product listings for {the marketplace}. When bought, the merchandise is shipped immediately from the Temu facility in a well-recognized, shiny orange bag utilizing intelligent air freight methods to maintain prices low.
The corporate just lately modified techniques, permitting American retailers to listing merchandise and optionally make use of Temu’s warehouse and achievement system.
This system is free for small sellers, however a enterprise requires a subscription starting from 2% to five% of the promoting value. On the time of writing, {the marketplace} additionally charged a fee processing price of two.9% + $0.30 per transaction, and sellers paid all transport prices. Collectively, the charges make Temu much like different marketplaces.
DTC Alternative
Temu’s low costs could not match conventional retailers, however DTC manufacturers may have a possibility.
A DTC product is exclusive. Related merchandise could exist in Temu, however none are an identical. Plus, American-made merchandise might need a aggressive benefit owing to perceived worth and high quality.
All instructed, I see 5 potential advantages for DTC manufacturers promoting on Temu.
Model constructing
DTC manufacturers on Temu can introduce customers to the corporate and construct relationships.
The introduction occurs when a Temu purchaser finds the model’s merchandise. The connection begins with order achievement. DTC sellers may embrace within the packaging a bodily product catalog, a coupon for a free merchandise, or a observe describing the model’s story.
Gadgets requiring a guaranty registration provide the chance to gather the client’s e-mail deal with and telephone.
Income
Any established gross sales channel is a income alternative. Temu has a large person base, and people customers, discount-oriented as they could be, are the chance.
Temu’s media company instructed me the corporate doesn’t share estimated or common vendor income. DTC outlets ought to take a look at, optimize, and iterate on the platform.
Advertising and marketing
DTC manufacturers itemizing merchandise on Temu can take part in platform-wide promotions and flash gross sales, driving site visitors to listings and thus extra interactions
Chinese language growth
DTC manufacturers can flip the script and provide merchandise to Chinese language patrons by way of stock saved in Hong Kong or different Temu places.
Product growth
The absence of a Temu itemizing price facilitates the testing of latest gadgets. DTC manufacturers can create quick runs of prototype merchandise, provide them on Temu, and study what appeals to customers.
Marketplaces Usually
Promoting on Temu needs to be a part of a common market technique for DTC manufacturers.
A model promoting on one market can contemplate others. Therefore itemizing on Amazon, Temu, Walmart, Esty, and eBay may all be a part of an total market strategy, akin to:
- Set marketplace-specific aims. Outline income targets, buyer acquisition charges, or model consciousness metrics for every market.
- Set up market audiences. Use analytics to study buyer demographics and buying conduct on a per-marketplace foundation. A Temu shopper will probably differ from one on Amazon or Walmart.
- Align merchandise with {the marketplace}. A model might need a number of variations of comparable gadgets. Maybe the high quality items are on Amazon and entry-level gadgets on Temu. Returns and seconds may promote on eBay.
- Optimize product listings. Frequent optimization techniques throughout all marketplaces embrace high quality pictures, keyword-rich descriptions, and aggressive costs. However consider platform-specific practices, conventions, and guidelines.