Temu has become the world’s Number 2 online shopping destination, overtaking eBay to move closer to Amazon.
Amazon still rules the online market but has seen growing erosion thanks to Temu, which went from zero to tens of billions of dollars in just two years, according to Marketplace Pulse.
Temu became the most downloaded shopping app in the U.S. just weeks after launching in September 2022. It has since held the top spot every day for nearly two years. It now ranks Number 1 in most of the almost 80 countries in which it operates.
And who’s reponsible for this? None other than Amazon itself.
A sea change in shopping
Very simply, Amazon changed how people shop. It got them used to buying products without famous brand names. This paved the way for Temu, which sells similar no-name products but at even lower prices.
Why does this work? Amazon shoppers often search for items like “running shoes” instead of “Nike running shoes.” They trust Amazon’s reviews and ratings to guide them, even if they’ve never heard of the brand. Basically, Amazon has become the “brand” that matters.
Traditional brands like Coca-Cola and Nike used to be a shortcut for shoppers. They knew what they were getting and were willing to pay more for that assurance. But Amazon showed people they could often find good quality even without the big names.
Now, Temu is taking it a step further. They’re saying, “Forget brands and reviews, just buy the cheapest thing!” This is working because Amazon already trained shoppers to ignore brand names.
This doesn’t mean brands are dead. There are still popular brands and exclusive products people love. But a huge chunk of online shopping is now focused on cheap, no-name items, and that’s where Amazon and Temu are winning.
Temu hasn’t had an easy time of it, plagued by consumer complaints about flimsy meerchandise and slow deliveries and by fears that using it may pose identity theft risks but it has blazed a trail that others will soon be following, with interesting results for established online sites.
