Temu, a Chinese app created by Pinduoduo Holdings, has been having explosive sales that dropped headphone prices from $50 to $25, a 50% discount from what it should have been. The company, which has had massive sales ever since its launch in September 2022, creates great offers, but could this just be an elaborate scam?
How is Temu able to lower the price of its products so much? According to USA Today, there are three ways the app can make the prices so low. First, it doesn’t require a middleman to ship its products worldwide. A middleman is an extra company businesses pay to send its products to different countries. However, Temu doesn’t need this because Pinduoduo Holdings, the company that Temu is under, already does the shipping itself. This drastically reduces the cost of its items because there are no extra fees to pay. China is already number one in terms of manufacturing products, and this helps Temu create the products for a lower price too.
Temu’s other advantage is its new technology called the “Next-Gen Manufacturing model.” This system helps predict what people will be wanting in the near future so that it will not overproduce or underproduce any goods, and helps them save money in the long run. Other companies, such as Amazon, have been selling online products for years but were never able to successfully lower the prices of their goods as much as Temu.
A third advantage is that Temu guarantees to return items within fifteen days of getting the package, which helps it gain loyal customers. Although many companies have a return policy, the one run by Temu gives more leeway for the users to give its products back. They offer the Purchase Protection program, which gives full refunds if the item doesn’t arrive or is damaged. This trust between the company and the customers is what leads to a successful business. Not only does Temu provide a good relationship with its customers, but it also makes sure the customers receive decent quality products. With prices so low, some customers may expect the items to be cheaply made and not up to standards. However, the quality of the items is worth their money. Temu makes sure that its sellers are held accountable for making bad quality products by risking them being removed from the platform or discredited altogether. Another Chinese company called Shein—a company that sells cheap clothing—is also from China and has the same market idea. However, Shein does a poor job of keeping its products up to standard and causes the customers to lose trust in the company while Temu can stop this problem from happening. The only other question left is how does Temu deliver items to its customers?
Temu, surprisingly, has a fast and reliable delivery system that lets it send items from China all over the world. Temu products are available in 35 countries including the United States, South Korea, and most of the countries in Europe. To ensure the payment data will be safe and secure, all of Temu’s links are PCI (Payment Card Industry)-certified which is the highest level of payment security that a company can provide. According to Temu shipping info, as soon as the customer buys a product, the information is sent to a warehouse in the country where the customer resides. When the product is sent, the estimated delivery time and order confirmation are emailed to the company. Within 6-7 days, the order has arrived at the front door, waiting for the customer to pick it up.
Temu’s customer-centric approach, including a return policy and Purchase Protection program, fosters trust. However, as with any emerging company, consumers should still exercise caution when shopping online. Temu needs to gain the trust of its customers if it wants to become a more dominant business, but the company does not seem to be the scam some fear it to be.
