Temu encounters obstacles in the United States: Amazon becomes a barrier to its expansion

Temu encounters obstacles in the United States: Amazon becomes a barrier to its expansion
As the United States imposes tariffs on Chinese products, Chinese e-commerce platform Temu (under Pinduoduo) is working hard to adjust its business model to meet the challenges. However, according to the Financial Times, Temu has recently been explicitly informed in negotiations with third-party sellers in the United States that it cannot sell branded products at prices lower than Amazon's.

A well-known third-party seller executive said, 'We told Temu that they cannot beat Amazon with the same product and must provide substantially different products.'. ”

This restriction has had a significant impact on Temu, especially after the end of the 'de minimas exemption', which has hindered its original strategy of relying on low price advantages. According to data analysis company Sensor Tower, the monthly active users of Temu's US app have plummeted by 54% from March to mid July, dropping to 37 million.

Temu responded by saying, "We advocate for fair and open market competition, which is of great significance for promoting innovation, improving quality, and reducing prices. Sellers should have the right to choose their own platform and sales methods, rather than being limited to a single channel

Analysis indicates that Temu's user decline is partly due to its suspension of advertising in the US market in June. Despite resuming advertising at the end of the month and attempting to attract sellers through incentives such as reducing platform fees, it still struggles to compete with Amazon.

Some sellers admitted that even if Temu offers lower prices, Amazon can quickly match prices, and with its huge size, its ability to bear losses far exceeds that of small platforms.

Consultant Martin Heubel said, "Unless Pinduoduo is willing to lose billions of dollars annually in exchange for market share over the next five years, it must compete smarter

At the same time, Amazon is also facing pressure on other battlefields. The latest research shows that Wal Mart has surpassed Amazon in the field of "instant delivery", especially in the local fresh food distribution. It uses its offline store network to meet consumers' demand for "instant gratification".