Prices on this online marketplace are unthinkably low. The aforementioned finger toothbrush is $17.28 cheaper than a very similar item sold online by a New Zealand pet supplies business. An iPhone case costs about $5, compared to paying $20-30 in a shop. A highly rated trio of concealer (“the BEST concealer I have ever used!” says one reviewer, who has bought it twice already) costs 89 cents.
But the thing that really sets Temu apart is the way it encourages you to shop ‘like a billionaire’ (or at least a billionaire who needs a 20-piece set of plastic toy foods, a giant bib to stop hair going everywhere during beard trimming sessions, or 10 metres of LED strip lights).
Digital e-commerce expert Tony Huo told Kathryn Ryan that gamification is Temu’s not-so-secret weapon. The site uses a highly social promotion system to secure shopper loyalty, asking you to refer friends, share coupons or play games to earn credits.
“It really serves two purposes. Firstly, is to get you to come back, to create a bit of stickiness by gamifying some of the mechanisms. Secondly, to get you to refer to friends. Essentially the incentive is that if you play this game you get a $20 credit, but you soon enough realise that you never get to that $20 credit, you’re always missing some points. All you need to do just to refer a friend or come back the next day or the next five days.”
Is Temu harvesting your data every time you play a game or go on the app to buy a pair of Lenovo-branded wireless headphones ($18.37), or a rose gold stainless steel manicure set ($4.99, more than 100,000 sold)? Huo’s not sure.
“I guess I trust them just as much as trust any other e-commerce site out there. To me, they are just another standard e-commerce site, as far as I know.”
Huo says Temu shopper feedback is largely positive, perhaps because expectations are low if you’re paying less than the price of a coffee for goods that would cost four or five times as much in a shop down the road.
He says the links with Pinduoduo mean Temu has established supply chains and logistics, as well as marketing. The model enables shoppers to buy (indirectly) from Chinese manufacturers and wholesalers.
There’s no doubt Temu brings together all the very latest in consumer tech and targeting, as well as a whole bunch of things that might – in some cases – be useful. But do we really need it?
Temu’s entry into the New Zealand retail market essentially means “there’s a lot of landfill coming our way”, says retail strategist Chris Wilkinson.
Wilkinson, managing director of First Retail Group, says Temu will be most popular with younger shoppers who are already familiar with picking up bargains on other e-commerce sites like AliExpress.
“Those consumers are already involved in that sector. It will have a cumulative effect. These are typically lower-value goods … they’re products without brands. They’re almost in that disposable category.”
Wilkinson says big retailers like The Warehouse are aware of the threat posed by sites like Temu, and they’ve strategically evolved into other types of online shopping.
“Initially, the pandemic was really useful because that pushed retailers to improve their digital visibility and functionality significantly.
“For many retailers including big ones, we kind of went from the zero to hero stage. It’s about digital visibility, because that’s how people’s shopping journeys start.
“What we see now is that retailers are very focused on being able to sell and promote products online.”
- RNZ
