Online retailers and in store retailers such as Target, Big W And Kmart, who have recently expanded their value product range due to inflation pressures, are facing a major new threat from Chinese website Temu who has targeted the Australian market offering free shipping and extended warranty, also set to come under pressure if this site takes off is Aldi and Coles Specials.
Temu is a bargain web site that ranges tens of thousands of products that are sourced direct from manufacturers.
The site is owned by PDD Holdings, which is listed on the NASDAQ.
PDD also owns China-based Pinduoduo, a social e-commerce platform similar to Groupon.
Online sites such as Kogan, Catch, Target and Amazon are set to face pressure along with distributors who supply cheap Chinese manufactured goods to online retailers.
Already one of the most downloaded apps in the US, even beating Amazon.com, the Temu marketplace is packed with almost every conceivable product one can search.
A camera bag on Temu is selling for $44.98 shipped to Australia.
A similar camera bag at online site Camera Warehouse is selling for $413.
Temu – which stands for Team Up, Price Down has witnessed a big lift in traffic since its March Australian launch, with a six-fold increase in month-on-month hits to its website.
According to SemRush research www.fruugoaustralia.com is seen as a site that could come under pressure from Temu which in its first month got 480,670 unique visitors from Australia without any publicity or promotion.
According to the AFR Temu, is offering free shipping on all orders and free returns within 90 days, as it looks to gain an early following.
Craig Woolford, MST Marquee’s head of consumer research, said the marketplace will be one to watch, and could present a challenge to the discount department stores as well as Wesfarmer-backed Catch, Woolworths-owned MyDeal and Kogan.
“For value retailers like Kmart, Target and Big W, it’s not easy to make online successful since price points are so low and the retailers’ profit margin is swallowed by fulfilment and delivery costs,” Mr Woolford said.
“So, if Temu can develop a viable business model it will present a challenge to those discount retailers.”
