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Chinese ecommerce goliath Shein has been in the spotlight recently. Just last year, ​​Shein’s actions forced Amazon to play a little defense. Amazon ended up reducing the transaction fee it charges merchants for clothing in an attempt to compete with Shein’s rapidly-rising Chinese fast-fashion retail site.

Temu, itself a rising star of Chinese ecommerce just made its own ecommerce power play.

A month ago, Temu began allowing sellers with local U.S. warehouses or 3PLs to sell on its platform. That was in addition to its existing consignment model where sellers ship inventory to Temu’s warehouses. Now, Temu has partnered with third-party warehousing and fulfillment companies WINIT and Easy Export to offer “Fulfillment by Temu” services similar to Amazon’s FBA or Walmart’s WFS.

Temu is also known for its innovative “shoptainment” model that gamifies the online shopping experience. By offering a treasure trove of affordable and quirky products, coupled with aggressive marketing spend, Temu has rapidly attracted millions of users. 

Now, for better or worse – and to the certain consternation of Walmart and Amazon – they’re right on the doorstep of North American shoppers. 

Leveraging Chinese Manufacturing and U.S. Demand

Temu capitalizes on the excess manufacturing capacity in China and the demand for low-cost goods from American consumers. By directly connecting these two entities, Temu offers a wide array of occasionally peculiar yet affordable products. 

The platform presents a wealth of items that shoppers never knew they needed, enticing them to explore and discover hidden gems. This carefully curated mix of affordability and excitement creates an irresistible allure for an increasing number of users.

Expanding the Marketplace Model

It was just a month ago that Temu started allowing sellers with local U.S. warehouses or third-party logistics (3PLs) to sell on its platform. This new “marketplace” model complemented Temu’s existing consignment model, where sellers ship inventory to Temu’s warehouses. 

At that time, according to research from Marketplace Pulse, 1,000 sellers, all based in China, took advantage of this opportunity by repurposing some of the existing us-based inventory they had intended to sell on Amazon.

This matters because it’s going to reduce complete reliance on the China supply chain alone while offering more pricing options and a greater selection and variety of goods. It’s also bound to help mitigate regulatory risks.

Partnering for Faster Fulfillment

That move by Temu allowed Chinese sellers with inventory in the U.S. to sell on their marketplace. It was the first big crux move in what’s clearly a long game. Now, Temu has taken the second step, and in doing so has created their own version of Fulfillment by Amazon (FBA), or Walmart Fulfillment Services (WFS). 

Temu has partnered with third-party warehousing and fulfillment companies WINIT and Easy Export. These partnerships offer “Fulfillment by Temu” services, and mirror Amazon’s FBA or Walmart’s WFS. 

This makes it possible for Sellers to ship bulk inventory to WINIT and Easy Export’s U.S. warehouses, where orders will be fulfilled and shipped to customers faster. This strategic move aims to provide a two-tier assortment – fast local delivery for popular items and a broader direct-from-China selection.

Temu’s aggressive expansion plans position the company as a formidable competitor to industry giants like Amazon, Walmart and Shein. By onboarding more Amazon sellers with U.S. inventory and targeting major brands, Temu aims to offer a compelling alternative to established players. 

Gamifying the Shopping Experience

Way back in 2016, Alibaba launched Taobao Live, which in large part threw open the doors to live shopping in China. Since that time, Chinese platforms have made huge advances in social commerce and the “gamification” of purchases. 

Increasingly, Chinese shoppers make their purchases after taking part in virtual exhibitions and performances that take advantage of the advances in artificial intelligence and virtual reality that we’ve seen over the past several years. 

Expert ecommerce watchers feel that a significant percentage of Temu’s success is through its embracing the still-innovative “shoptainment” model. It’s transformed the act of browsing into an exciting adventure with an online purchase the not-so-accidental result. 

Shoppers are greeted with spinning wheels that offer enticing coupons, creating an element of chance and anticipation. Temu’s algorithm skillfully presents products that cater to individual preferences, creating a personalized and immersive shopping environment. The combination of affordability and excitement keeps users hooked, eagerly anticipating their next unexpected find.

What’s In Store for Ecommerce Sellers

Temu’s innovative approach to ecommerce, combining gamification, affordability, and now, localized fulfillment, is revolutionizing the online shopping experience. By leveraging Chinese manufacturing, partnering with U.S. warehousing companies, and expanding its marketplace model, Temu is well-positioned to compete with industry giants. 

By continuing to disrupt the status quo and offering consumers an addictive blend of entertainment and affordability, Temu is going to be a force to be reckoned with.

How Canopy Management Can Help

To level up your own online-selling journey, check back here to stay in touch with the latest ecommerce news. The Canopy team is constantly updating blog content that also offers tips and strategies from some of the brightest minds in the Amazon marketplace. 

Want to find out more how Canopy can help you strategically scale your own brand? Reach out to the Amazon Management experts here.