Forced seller price reduction? Temu opens the same product bidding mode!
Temu adopts the same product bidding mode in response to forced price reduction by sellers
According to the latest global e-commerce shopping index statistics released by Salesforce, global e-commerce traffic increased by 6% year-on-year in the first quarter of 2023, achieving growth for five consecutive quarters. However, online order volume has declined for five consecutive quarters, with the average number of items per order decreasing by 6% and the average order value also decreasing.
This means that although global e-commerce traffic is growing, the profit brought by each customer’s visit to the e-commerce website is declining.
Many sellers pointed out after viewing this report data that this is a major sign that global e-commerce platforms are moving towards low-price internal competition. Among them, Temu, the “king of internal competition,” has made a significant contribution.
According to Comscore data, as of February 2023, the cross-border e-commerce platform Temu of Pinduoduo has attracted 70.7 million independent visitors to its website and applications in the United States, surpassing many mainstream e-commerce platforms in the United States, as well as SHEIN in the same industry.
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This data was revealed by a seller and caused heated discussions in the seller’s communication group:
“Temu actually has 70 million, oh my god, no wonder Amazon’s traffic has deteriorated.”
“It’s almost twice as much as SHEIN, is this real?”
“I also want to do Temu…”
It is understood that when it was launched last year, Temu’s traffic skyrocketed thanks to its low-price subsidies and viral social media marketing drainage strategy. In February of this year, with the traffic boost of “Super Bowl” in the United States, its downloads increased by 45%.
Since then, Temu, which has achieved explosive growth in the North American market, has embarked on its global expansion.
As of now, TEMU has opened sites in 12 countries, including the United States, Canada, Australia, New Zealand, the United Kingdom, Germany, the Netherlands, Italy, France, and Spain.
On May 18th, according to sellers, TEMU once again opened new sites in two countries, Austria and Mexico. From the Temu seller’s backend, the Austria and Mexico sites are already on the site list.
TEMU’s continuous high traffic and rapid expansion have made many sellers unable to resist the temptation of this new platform, and many have entered the market. Among them, there are supply-type sellers who have earned a lot through “small profits but quick turnover,” but more sellers are still suffering from TEMU’s ultra-low price strategy.
Furthermore, from the newly leaked strategy, Temu is still walking down the “low price” road without hesitation.
Recently, many Temu sellers have received a notice about the product bidding rules.
The notice states that sellers who have received the notice have products that have entered the bidding process and need to confirm and send samples as soon as possible. Failure to do so within the specified time limit may result in the product being removed or temporarily replenished.
The specific bidding rules are as follows:
1. A weekly bidding for the same product will take place, with the lower price winning (Monday 9:00 a.m. – Thursday 11:59 p.m.);
2. After the system automatically initiates the bidding, the seller needs to confirm the invitation in a timely manner. Failure to do so will result in bidding failure;
3. Products that fail in bidding will be restricted from being listed and stocked, while successful bidders will not be restricted.
Key point: A bidding competition for the same product will be held once a week. Failure to participate in a timely manner or failure to win the bid will result in restrictions on new product listings.
Upon hearing this announcement, many sellers were extremely frustrated:
“Temu is already taking advantage of sellers. Now, if we don’t participate in the bidding, we could be delisted?”
“Wasn’t there already a pricing strategy among different platforms? Now we have to deal with the same product on the same platform?”
“Continuing like this will eventually lead to the survival of the fittest.”
Since its launch, Temu’s traffic distribution logic has always been centered around “low prices.” Some sellers have discovered that Temu not only favors products with lower prices, but also takes a series of actions to lower product prices.
For example, before this, many sellers complained that Temu not only required products to be priced lower than the 1688 wholesale price, but also directly delisted sellers’ products when it found similar products with lower prices on the same or other platforms.
It is enough to show that in Temu’s bloodthirsty path of sinking into the market with the ultimate low price, platform sellers are still bearing the weight of “cutting profits.”
In addition, since its launch, Temu has been criticized by sellers who have joined the platform due to chaotic management, harsh fines, and low process efficiency.
Currently, Temu, which is well-versed in marketing, has indeed achieved great success in increasing platform traffic and user numbers, but its operation system and management system need urgent improvement. Therefore, even though Temu’s development momentum is rapid now, whether it can stand firm in the head of the overseas consumer market without falling still needs to be verified by time.
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