Chinese Retailer Temu Gains Edge Over eBay In US Market

Chinese e-commerce newcomer Temu, a division of PDD Holdings Inc PDD, has swiftly outpaced veteran eBay Inc. EBAY in terms of attracting repeat U.S. customers, despite eBay’s nearly three decades of operation.

A recent survey conducted by Omnisend revealed that 34% of consumers shop on Temu monthly, surpassing eBay’s 29%, reported Bloomberg.

This surge in customer engagement for Temu comes as the company invests heavily in marketing and promotional discounts.

Notably, Temu’s advertisements, including two Super Bowl commercials, have effectively drawn customers to its platform, where they typically wait a week or more for items shipped directly from China.

Temu’s aggressive advertising strategies and social media presence, encapsulated by their “Shop like a billionaire” campaign, have hugely contributed to their rapid growth in the competitive U.S. market.

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The pandemic-induced price surge has altered consumer behaviors significantly, with only 40% of U.S. shopping journeys starting on Amazon.com Inc AMZN last year, down from over half in 2022.

Temu's rise reflects a broader trend of consumers increasingly starting their shopping journeys on search engines like Google GOOGL, seeking better deals across various platforms.

While Temu’s pricing attracts consumers, the company faces challenges with product quality and delivery speeds, areas where competitors like Amazon excel with their vast array of fast and reliable services.

Despite these hurdles, Temu’s model of direct-from-factory sales continues to gain traction among price-conscious shoppers.

Price Action: PDD shares are trading lower by 0.79% at $147.31 at the last check on Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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