Major Harvey Norman shareholder and Chairman Gerry Harvey has had another bout of verbal Diarrhea, this time he claims that Chinese online giant Temu “will not survive.”
This is the same executive who claimed that online retailing would fail in Australia.
He is also the Chairman of a business whose web site crashed on the busiest trading day of the year Black Friday for more than 12 hours.
Now he’s claiming that Temu is unlikely to survive as “quality over quantity” will win out as consumers prefer to buy from trusted brands.
It appears that he is struggling to come to grips with the power of value Vs overpriced branded products coming out of the same Chinese factories that Temu source their products from.
Just for perspective, Chinese ecommerce group PDD the owner of Temu, yesterday reported a more than doubling of quarterly revenues,to A$18 billion claiming that 2023 was as a “pivotal” year because of the massive growth that Temu delivered.
It’s also the online site that Amazon fears.
Temu is making waves in Australia, the US and Europe, reported revenues of A$18 billion for the three months to December, a 123 per cent increase from the previous year and far above analysts’ estimates.
Profits grew 146%.
As for Harvey Norman net profit plunged 45.3% to $200.01 million as revenue slid 8.2 per cent to A$2.15 billion.
Franchising operations segment revenue fell 14% to $511.81 million while overseas company-operated retail segment revenue went up 0.9 per cent to $1.4 billion.
Temu growth in Australia is believed to be over 100% with the Chinese retailer growing off the back of cheap merchandise that significantly undercuts Harvey Norman goods in similar categories and often for the same product which is coming out of the same Chinese factory.
Gerry Harvey claims customers would always prefer to purchase big-ticket items from trusted brands.
“If you’re going to sell appliances, whether it’s a toaster or a power tool, you want to know what the brand is,” he told The Nightly.
“People buy (cheap goods) and then the next time they buy, they go back to a brand.
“I wouldn’t buy a product that didn’t have a brand . . . you could end up getting a dud nine times out of 10.”
What he has not commented on is what is the difference between a house brand product sold at Harvey Norman that a supplier has simply stuck a brand name on, and a similar product sold on Temu for one tenth of the price that Harvey Norman is charging.
Take a Breville glass kettle that’s manufactured in China and sold at Harvey Norman for $189. A similar kettle also manufactured in China is being sold on Temu is sell for $11.99 with consumers offered free shipping and a choice of multiple glass kettle options. 
Gerry Harvey who is known for his verbal spurts is also questioning the Chinese e-commerce giant’s business model, which relied on keeping costs rock bottom by connecting consumers directly with suppliers.
“The only ones that in my opinion will ever survive long-term and do well are the ones that have got (brick-and-mortar stores) as well as online,” Mr Harvey said.
He still has not explained why his own web site went for hours on the busiest trading day of the year and what impact it had on his latest financials.
