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Why Everyone Is Raving About Temu

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Temu, the online shopping app most downloaded in the U.S., is retaining customers with attractive pricing and an innovative ecommerce combination of online shopping and entertainment known as “discovery-based shopping.”

The app has surged in popularity in recent months and is hailed by experts as a game-changer in the retail industry. Temu’s unique features and competitive prices stand out in a crowded market and could be key to its long-term success.

“Discovery-based shopping—the core offering of Temu—is a new and fresh idea that hasn’t been explored much,” said Connie Chan, a San Francisco-based general partner at Andreessen Horowitz, who led investments in Pinterest and Lime and is credited with coining the term “super-app.”

“The importance of discovery-based shopping is that it better mimics the in-store shopping experience and frankly, it’s fun. It’s literally shopatainment.”

What makes Temu different

Chan made the comments in a blog post titled Temu: What It Is, and Why It Matters. She wrote that discovery-based shopping differs fundamentally from the search-first shopping that is standard at Amazon and other retailers. With search-first, users might curate a list of desired items they stumble across over the course of a few days and place an order a week later. “When was the last time you opened the Amazon app with no specific thing you needed to buy?” Chan wrote.

Temu, pronounced “tee-moo,” is owned by PDD Holdings Inc., a publicly traded multinational commerce group. The company, which is listed on the Nasdaq, is known for its innovation in interactive mobile e-commerce and the C2M (Consumer-to-Manufacturer) model, a process that helps sellers create products based on consumer preferences, resulting in lower costs.

Through years of building a robust network of global suppliers, manufacturers, and logistics partners, PDD Holdings has been able to provide Temu with the resources to offer a wide variety of merchandise at affordable prices to customers.

Based in Boston, Temu connects customers with independent sellers, manufacturers, and brands. According to its website, the company’s mission is to provide affordable, high-quality products and create an inclusive environment for both consumers and sellers to achieve their goals.

Consumers like Kathi M. have taken to shoptainment on Temu, which started operations in September 2022. She raved about the “amazing deals” on the site to her friends and family and has ordered household items, clothes, cat toys, and jewelry.

“Every item I have purchased from them (and it has been MANY!) has been of superior quality. You can totally spend an entire day browsing through all of their items!” she wrote on Sitejabber, a review site.

A Temu spokesperson said that the company believes customers deserve the “most value-for-money products with the best customer service and transparency,” while sellers should have access to their target customers and customer feedback. By connecting customers with products that match their needs, Temu hopes to create a sustainable business model that allows for more effective individualization,” according to a Jan. 11 press release.

The company has also argued that its pure marketplace model helps to align the interests of the platform and sellers in a shared mission to serve customers well. Temu does not have its own brands, so it does not have the conflict of interest of competing against sellers on its platform and is incentivized to help its sellers succeed.

Operating an open ecosystem that serves everyone, including businesses big and small, is also in line with its values of empowerment, inclusion and diversity, integrity, and being socially responsible, according to Temu.

For Andreessen Horowitz’s Chan, the discovery-based shopping approach of Temu lays a foundation for new online shopping behaviors, such as seeking feedback from friends or ranking items being considered for purchase. These behaviors may not be suitable for users who are making purchases in a hurry, but work well for those who are browsing for products, she added.

Temu should extend its strong performance over the year-end holiday season and retain customers “not just because the prices are good, but because its primary differentiator, in-app product discovery, is new, powerful, and truly differentiated from what’s currently in the market,” Chan wrote.

Chan said she’s “betting Temu will have staying power” and is even more excited to see the platform introduce innovations that will “shake up online shopping.”

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