(CNN) — A new online shopping platform tied to one of China’s top retailers has quickly become the most downloaded app in the United States, surpassing Amazon and Walmart. Now it’s trying to capitalize on a performance on America’s biggest stage.
Temu, a Boston-based online retailer that shares ownership with Chinese social commerce giant Pinduoduo, made its Super Bowl debut on Sunday.
Temu, which runs an online superstore for just about everything – from housewares to clothing to electronics – unveiled a commercial during the game encouraging consumers to “shop like a billionaire”.
The field? You don’t have to be one.
“We want to share with our consumers on as large a stage as possible that they can shop with a sense of freedom because of the price we offer,” a Temu spokesperson told CNN in a statement.
The 30-second spot shows the company’s proposition to users: It feels like you’re spending money buying lots of things cheaply. A women’s swimsuit on Temu costs just $6.50, while a pair of wireless earphones costs $8.50. An eyebrow trimmer costs 90 cents.
These surprisingly low prices, at least by Western standards, have led to comparisons to Shein, the Chinese fast fashion upstart that also offers a wide selection of low-cost clothing and home goods, and has made significant breakthroughs in markets including the United States.
According to Coresight Research, Shein is considered one of Temu’s competitors, along with US discount retailer Wish and Alibaba’s AliExpress.
Climbing the charts
Temu, pronounced “tee-moo”, was launched last year by PDD, the US-listed parent company formerly known as Pinduoduo. The company officially changed its name this month.
PDD’s subsidiary Pinduoduo is one of China’s most popular e-commerce platforms with about 900 million users. It made its name with a group buying business model, which allowed people to save money by enlisting friends to buy the same item in bulk.
On its website, Temu says it leverages its parent company’s “extensive and deep network…which has been built up over the years to offer a wide range of affordable quality products.”
Since its September rollout, the application has been downloaded 24 million times, representing more than 11 million monthly active users, according to Sensor Tower.
In the fourth quarter of last year, US app installs for Temu surpassed those for Amazon, Walmart and Target, according to Abe Yousef, a senior insights analyst at analytics firm Sensor Tower.
“Temu rose to the top of both US app store charts in November, where the app still holds the top spot today,” he told CNN, referring to mobile app stores for iOS and Android.
Yousef said the company had been particularly successful in acquiring new users by offering extremely low prices and in-app flash deals, such as 89% off select items.
The company is already looking for new territory. This month, Temu said on Twitter that it plans to expand into Canada.
‘To cheap’?
Michael Felice, an associate partner at management consulting firm Kearney, said Temu stood out simply by selling products without high markups.
“Temu may be exposing a white space in the market where brands are producing at extremely low cost, and along the value chain there are so many inflated costs passed on for margin,” he told CNN.
“That being said, US consumers may not even be willing to accept some of these price points… There’s always the question, ‘is it too cheap to be good?’”
Deborah Weinswig, CEO of Coresight Research, has warned that it may be too early to say whether Temu will be able to maintain those extremely low prices, free shipping, and other perks.
“Temu wants to continue experimenting with marketing and offerings, which is possible thanks to its resource-rich parent company,” she wrote in a report.
The launch, she said, “comes at an opportune time as consumers look for value amid still-heightened inflation and some degree of economic uncertainty.”
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