Following the recent Mid-Autumn Festival celebrations, the e-commerce platform Temu, Pinduoduo's cross-border venture, has become a hot topic among sellers. Many merchants participating in the program have raised concerns about the platform's demanding pricing requirements, sparking debates about whether this strategy represents an opportunity or a potential pitfall.
"Below Wholesale" Pricing: Who Bears the Cost?
Sellers report that Temu requires suppliers to offer prices even lower than wholesale rates available on platforms like 1688. This presents significant challenges for trading companies that typically source products from wholesale markets like Yiwu or 1688. The pricing pressure essentially forces many sellers to operate at a loss, suggesting Temu may be favoring factory-direct suppliers with lower production costs.
In official merchant groups, Temu's business managers frequently remind sellers about pricing details and packaging requirements to meet platform standards. Established brands like Babycare have already begun shipping products through the platform. According to business managers, Temu has made substantial investments in its U.S. operations, where the team is currently based. Despite launching just one week ago, the Temu app has rapidly climbed into the top 100 shopping applications.
The Mechanics Behind Sales Growth: Loss Leaders and Rapid Restocking
Some sellers have already achieved stable sales volumes, with one merchant reportedly reaching nearly 800 orders. The platform implements an aggressive restocking policy: non-moving inventory gets replenished to 50 units, slow-moving products (under 30 sales) get 100-200 units, and popular items (50+ sales) receive 200-500 units. High-performing products may be featured in special promotional zones offering items at $0, $0.99, or $3.99, including seasonal campaigns like Halloween promotions. This strategy clearly prioritizes customer acquisition through loss-leading pricing.
Stringent Hiring Practices: Not for the Faint of Heart
Temu's recruitment process reflects the platform's demanding nature. While officially described as a "10-16" work schedule (10am-4pm), employees reportedly follow an "11-11-7" routine (11am-11pm, 7 days a week) with minimal downtime. The company conducts thorough background checks on applicants, particularly screening for any association with VOVA (Pinduoduo's previous cross-border venture that faced counterfeit product issues) or other related companies.
Pinduoduo's Cross-Border Ambitions and Seller Dilemmas
Temu's official merchant groups remain highly active, with business managers working through holidays to address seller inquiries, demonstrating Pinduoduo's serious commitment to cross-border e-commerce. However, the current model's heavy reliance on ultra-low pricing raises questions about long-term sustainability for sellers, particularly in the current global economic climate marked by reduced consumer spending.
Navigating Temu's Pricing Challenges: Strategies for Sellers
Merants facing Temu's pricing pressures can consider several approaches:
- Supply chain optimization: Identify more competitive suppliers and streamline operations to reduce costs.
- Product differentiation: Focus on unique offerings to avoid direct price competition.
- Quality emphasis: Maintain product standards to build brand reputation and customer loyalty.
- Policy awareness: Stay informed about platform changes to adapt business strategies accordingly.
- Collaborative approaches: Explore collective bargaining with other sellers for better terms.
The Road Ahead: Beyond Price Competition
While Temu's aggressive pricing may drive initial user growth, long-term success will require balancing affordability with product quality and service standards. For sellers, finding sustainable business models within this ecosystem will require continuous innovation and adaptation to the platform's evolving marketplace dynamics.