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Whether you’re on social media, playing games, or simply doing some online shopping, it’s hard to escape the persistent Temu ads at the moment. But why is Temu so cheap? Is it a scam? And, is there anything shoppers need to be aware of before placing an order through this new and flashy online marketplace?
With all these unanswered questions, we thought we’d take the opportunity to share what we know. So, read on to learn more about the pros and cons of shopping (and dropshipping) via the Temu online marketplace.
In times of uncertainty, it’s best to start with the basics! Temu is an ecommerce platform. It’s basically an online shopping go-to for just about anything and everything you could be looking for. So, in that respect, Temu can be likened to eBay or Amazon. Its catalog features everything from fashion and beauty essentials to outdoor furniture, power tools, and beyond. Not to mention all of those niche product categories in between!
What sets Temu apart from marketplaces like eBay and Amazon are its overwhelming collection of seemingly too good to be true prices. It’s true! At Temu you can pick up everything you need at a super cheap price point. For example’s sake, you can find wireless headphones for just over $2, on-trend accessories for as little as $1, and party dresses for less than $10. And so, it seems appropriate that Temu has coined the term “Shop like a billionaire” for its ad campaign. But, should we take advantage of these prices and - as they say - shop like billionaires?
Many people have been quick to draw comparisons between Temu and the likes of Shein, AliExpress, or Wish. But in truth, Temu is something a little more out of the box. Shein, for example, is cemented in the fashion niche, whereas customers can shop for practically anything they need on Temu. AliExpress and Wish are two marketplaces that have become well-known for lower-quality products, lengthy shipping times, and restrictive returns policies
But, as Temu continues to hold the top spot for free apps in both the Google Play Store and Apple’s App Store thanks to its saturation across the world of advertising and alluring prices, it’s gaining both good and bad attention. Legislators and consumers alike are scrutinizing Temu’s products offerings. And younger online shoppers have been TikToking their Temu product deliveries too.
One person’s definition of “legitimate” may differ from the next slightly but on the whole, yes, the products on Temu are real. Shopping for a product through Temu will result in you receiving a delivery of the items you have ordered within approximately 10 days.
But shoppers should express caution all the same. Temu’s tech products are generally unbranded. So, if you don’t see a blue checkmark on a tech product listing, expect it to be unbranded when it arrives. Up to this point, Xiaomi and Lenovo seem to be the only verified tech brands on Temu.
You should also be aware that some of Temu’s customers have expressed that the items received differed somewhat from those displayed on the website. Lower than expected quality seems to be another common complaint among shoppers too. With an average rating of 3.1 out of 5 stars on Trustpilot based on over 10,000 genuine customer reviews, it’s no secret that Temu leaves a lot to be desired.
There are a number of other things you need to be aware of when considering shopping or dropshipping with Temu too. The fact that it has a late delivery compensation in place should tell you everything you need to know with regards to their shipping services.
But, some customers do attest to Temu’s prompt shipping services. And some customers confirm that upon arrival the products are of good quality, and are exactly as pictured online. So, we’d say it’s safe to say that Temu’s product quality can be unpredictable. And that’s no different from when shopping with comparable online stores like eBay or Amazon, or more often with AliExpress and Wish.
Temu has been accused by U.S government officials of potential data risks. The accusations arose after its sister site (the e-commerce platform Pinduoduo) was suspended for the presence of malware by Google. But, as seen in the CNBC article we’ve linked to above, analysts see Temu as less of a threat. This is due to the risks linked to the Pinduoduo site targeting primarily Chinese users.
Another reason Temu is considered controversial is the accusations outlined by Montana governor Greg Gianforte. He accused Temu of being "tied to foreign adversaries" which resulted in the popular shopping app being banned from any government-issued devices in the state of Montana.
And then there’s the report from the U.S. House Select Committee on the Chinese Communist Party. The report underlines that Temu does not take the necessary steps to ensure its products comply with the Uyghur Forced Labor Act. It also states that Temu exploits a U.S. commerce loophole which enables it to evade paying tariffs compliant with U.S. commerce laws and regulations.
Before we begin, it’s worth pointing out that Temu has not been accredited by the Better Business Bureau (BBB). It also only garners an average rating of 2.53 out of 5 stars (as of November 2023). And the recent Temu-related complaints on the BBB website relate to items taking a lot longer than expected to arrive or just not arriving at all.
But, social media seems to tell a different story. Temu purchases are all over TikTok. And on the whole, people seem to be really happy with their Temu products upon receipt.
So, what do we take from these contrasting opinions? Well, as long as you expect the items to be made using cheaper materials than branded alternatives, products listed on Temu are generally as expected in terms of quality.
So, who’s the man - or woman - behind Temu?
Temu is actually part of a multinational commerce group that’s headquartered in Dublin, Ireland. Its parent company is called PDD Holdings which owns both Temu and Temu’s sister company, Pinduoduo.
But, determining the exact origins of Temu becomes a little difficult. In February 2023 a SEC 6-K filing enabled Pinduoduo Inc. to change its name to PDD Holdings and move its primary executive offices from Shanghai, China to Dublin, Ireland.
Temu claims to be founded in Boston, Massachusetts in 2022. But, in the site's 'About Us' page there’s no mention of its parent company. And it’s worth mentioning that as well as its Boston office, Temu has other offices of operation across the world including two addresses in Canada.
It’s hard to deny that products sold on Temu are incredibly cheap. But how, and why? Temu claims to keep its product offerings affordable by cutting out the middleman. It connects customers and suppliers while handling the shipping and distributions of the products itself. So, Temu is essentially a dropshipping platform. It does not own the products it sells and instead acts as the go between that links shoppers and wholesalers or manufacturers.
It’s also worth knowing that Temu's sister site Pinduoduo generated more than 130 billion yuan in revenue in 2022 alone. That equates to more than $18 billion USD in just 12 months.
But, the U.S. House Select Committee suggests that the reason Temu is able to offer its products so cheaply for U.S. customer is because the company operates under the de minimis loophole. The de minimis loophole enables Temu to import goods with a total value of under $800 to enter the U.S. without needing to pay duties, taxes, or fees. And, within this loophole, products also skip out on the rigorous inspections that goods totalling above the $800 mark would be subjected to.
By avoiding these costs, Temu does not have to pass them onto the customer. But in avoiding the rigorous checks that imported products usually face, their qualities are not ascertained.
Temu utilizes a reverse-manufacturing model. This is said to help cut down on waste through accurate gauging of product demands.
What’s more, Temu's Third Party Code of Conduct highlights that the company has a zero-tolerance policy for vendors utilizing forced labor in their product manufacturing processes. It goes on to explain that Temu vendors must comply with local wages and hours-of-work laws, and that all working conditions must be safe and non-abusive.
But, the U.S. House Select Committee's report (mentioned above) states that Temu does not have a proper auditing or compliance program in place. And without one, Temu cannot properly ensure that its suppliers remain compliant with its Code of Conduct.
And as for environmentally ethical practices, things get even hazier. Online marketplaces such as Temu, Shein, and AliExpress express their commitment to environmental sustainability in a number of different ways. Digitalizing the economy, cutting waste, and offsetting carbon emissions are all ways in which ecommerce sites can argue their case for sustainability.
And so, the jury is out. We can go back and forth on how Temu backs up its claims of ethical practices and how the U.S. House Select Committee's report argues that these claims are not sustainable. But, we think it’s best if you make up your own mind.
There are plenty of pros when it comes to shopping with Temu. But, here are a few of the highlights we thought were well-worth mentioning:
As with everything, there are a few downsides to shopping with Temu that customers and dropshippers need to be aware of too. Here are the more notable cons:
This is a personal decision and depends entirely on your needs, wants, and service expectations. If you’re looking to purchase products directly from China suppliers, Temu is a good choice. And for products in general, Temu is great too.
But, if you’re considering launching your own dropshipping business, we’d recommend partnering with more reliable brands. At Spocket, we understand the potential risks of dropshipping entrepreneurship and are working hard to minimize those risks. As such, any of the dropshipping suppliers we partner with have proven that they can:
But, if you do want to start dropshipping with Temu, it’s worth bearing in mind that the Temu checkout process is very lengthy. Use this information to improve your own checkout process and reduce the risk of high cart abandonment. And work on your customer service skills too. If you offer excellent customer service at every opportunity, you will retain and expand your customer base fast.
Gemma has a passion for writing, an enthusiasm for eCommerce, and a flair for creating informative content that drives others to follow their dreams. Her work foundations are built on thorough research to allow you to find all the need-to-know info in one place.
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