“Well, let’s see,” more and more Quebecers say to themselves when faced with the ridiculously low priced products from Temu, Amazon’s Chinese competitor. With its persuasive marketing and inexpensive products, the platform has been turning heads across the country for 12 months.
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“It’s so easy to create needs by scrolling on Temu,” says Evelyne, a 41-year-old professional from Montreal.
A visit to the site or the app is enough to understand: $3.28 for a pack of 5 microfiber rags, $5.97 for an essential oil diffuser, $7.59 for polarized sunglasses, 9 $.12 for 100 feet of LED strip, $32.39 for a portable HD projector…
You still have to know what to buy, because the products, which leave China by air cargo, are not all of equal quality.
“I buy cushions, electronics, but not clothes,” says the mother of two young children.
- Listen to the techno discussion with Jordan Chénard, marketing communications specialist, on what Temu is via QUB :
She gives the example of a car phone holder for $0.99 on Temu. “It’s perfect and was worth $35 in Montreal or on Amazon,” she marvels.
Evelyne has been placing approximately one order per month for six months. During her nocturnal “scrolling” sessions, she accumulates products in her basket before purchasing them.
The speed of delivery has improved a lot, she says: from 30 days at the beginning to 7 days now.
“I’m not proud, it’s not ethical or environmental, but the prices are unbeatable,” recognizes the Quebecer.
Pumping money without common sense
The rise of Temu in Quebec, as in Canada or the United States, is due to its prices which defy all logic and its marketing of unparalleled efficiency.
Since its Canadian launch in February 2023, the Chinese-backed company has flooded the web with advertising, so much so that it is impossible to ignore its existence.
Temu spent US$1.7 billion on advertising in 2023. It will be US$3 billion in 2024, according to JPMorgan analysts.
The scale of this money pumping which benefits Meta and Google is such that Goldman Sachs calculates that Temu loses on average $7 per order.
The platform is the international extension of Pinduoduo, which appeared in China in 2015 to compete with the giants Alibaba and JD.com. Its owner, PDD Holdings, doubled its sales in 2023 thanks to its 750 million customers.
$300 elsewhere, $20 on Temu
Temu has quickly become one of the most downloaded apps in North America and Europe.
After two years of inflation in the carpet, consumers looking for good deals are less and less resistant to its tempting offers.
But all is not rosy in the kingdom of cheap. The European Toy Federation recently warned that 95% of toys offered on Temu do not meet European standards and are potentially dangerous.
The company is also accused of espionage. In 2023, the application was declared dangerous by the firm Grizzly Research, according to which it uses spyware to vacuum up a large amount of data.
Its marketing methods can also be displeasing. “In three days, for a single purchase, I received more than 20 marketing reminder emails and text messages,” says a Quebec customer.
This is without mentioning the pollution produced by the delivery of a $1 cushion from China.
Despite everything, it’s difficult to resist a product sold for $300 elsewhere and $20 on Temu.
Who is PDD Holdings
Listed on the United States stock exchange, the parent company of the Pinduoduo and Temu platforms moved its headquarters from China to Ireland in 2023. Its sales reached US$12.4 billion for the last three months of 2023. If it took Amazon nine years to become profitable, PDD got there in six years. Profits have been there since 2021.
Are we spying on you?
Temu is accused of espionage and exfiltration of data via its application, downloaded more than 100 million times in Europe and North America during the last nine months of 2023. The firm Grizzly Research calculates that of the 18 software functions that she considers dangerous and unsuitable, Temu uses them all, compared to 9 for Shein and 8 for TikTok. The application also requests access to the microphone and camera, which does nothing to reassure the authorities.
Facebook and Google dying of laughter
PDD spent nearly US$2 billion on advertising in 2023 at Meta, according to industry sources. Wall Street Journal, which surprised executives at the parent company of Facebook and Instagram. Temu also became one of Google’s top five advertisers by spending last year. Temu’s advertising volume took executives at both companies, which have long been the dominant players in digital advertising, by surprise.