Reminder PinDuoDuo, of PDD Holdings like Temu is, hire android reverse engineers [1], and have been had their app removed because it contained malware[2]. Don't install the Temu app.
Every ad I've seen from Temu is either AI-fabricated non-existent products, or real products with impossibly low prices. I wish somebody would sue them into the ground for false advertising.
It might just be me, but every Temu ad I see is a normalish product, but the image is designed to look like something sexy or illicit when viewed as a small thumbnail.
You seem like someone who doesn't want to shop like a billionaire! In all seriousness I 100% agree, I feel like this company is a massive house of cards that will end up like Evergrande etc. What is crazy is almost every site I visit I see a Temu ad so their ad spend is borderline insane to begin with, it growing larger is even more unbelievable.
The problem is that Amazon is selling the same stuff at double or triple the cost of these direct marketplaces.
Too much of Amazon is just marked up imports sold by meaningless brands.
Companies like Temu keep happening because Amazon is not operating a cost efficient marketplace and they are vulnerable. Presumably Amazon would win because of reputation and the reliability of their return guarantees, but they’ve lost their trusted status by letting their review systems be corrupted and no longer have the high degree consumer trust that gave them such defensibility.
So, some significant marketplace extraction will happen here as their suppliers essentially move up the value chain and start to eat their market, which looks like company-after-company from supply side countries making an entrance into the Western markets selling the exact same or similar products for much lower prices… exactly what we are seeing.
This flattening out of the supply chain is a phenomenon that Amazon has not done a good job of protecting against.
The only other big defense besides reputation is shipping speed and the risk annd complexity of importing, and perhaps at some point Amazon will wake up and start to lobby against the subsidized shipping policies. But in the short term they benefit from it too much to do so.
I liked Amazon when it wasn't just AliExpress crap marked way up. Now I've started shopping pretty much anywhere else. A lot of companies even include "free" two day shipping now to stay competitive with Prime. Amazon is steadily losing my business because they've decided to compete with the likes of Temu but at Amazon prices. I hope Temu eats their lunch.
IMO, Amazon ought to reconsider the third-party strategy. At the very least, if they want to keep my interest they need a toggle that I can flip which will hide every single product that isn't shipped-from-and-sold-by-Amazon.com.
The toggle isn't good enough because of their practice of commingling all suppliers' inventory of a single SKU. Shipped-from-and-sold-by-Amazon doesn't mean you're actually going to get an instance of the product they stocked themselves.
The appeal of Temu and AliExpress is that a lot of the same stuff you'd buy on Amazon is there for sometimes 25% or 50% of the cost- you just have to wait a little longer to get it.
That said, for however fake or skewed Amazon's reviews are, AliExpress and Temu's reviews are another level of useless. Most of the pictures are simply of packaged items, and the reviews themselves are variations of "Just got it haven't used it yet 5 stars!". My hunch is that they ran promotions to get people to write reviews at some point and got a lot of terrible, useless reviews in exchange.
>As of last month, Temu accounted for nearly 17% of market share in the United States within the discount stores categories, according to data analytics firm Earnest Analytics.
One data point:
I used to buy stuff occasionally on AliExpress, but got sick of waiting 4-6 weeks and occasionally having stuff never even show up. Temu has been burning money to gain market share, which equated to coupons that made things cheaper than AliExpress for a time, combined with 10-day-or-less shipping. They even credited me $5 on a $10 order when they were 1 day late for shipping.
I've since noticed Temu starting to tighten their purse strings a little, as the free shipping minimum is now $20 instead of $10. AliExpress has also responded to the competition and seem to be using stateside warehousing for popular items (or some other magic) to match Temu's ~10 day shipping times, so I've gone back to AliExpress for the most part. AliExpress has a wider swath of product too owing, I presume, to their many years of additional time in the marketplace.
Haha the fact that their slogan is act like a billionaire is just so amazing. Goes to show how much of the western world like money and want to appear wealthy. We really need to dig deep and get over thinking money == success.
Pretty much, same with SHEIN. I spend a lot of time thinking about how these companies are basically just selling garbage (or rather, soon-to-be-garbage). Beyond the impact of manufacturing, shipping, and disposing of this junk, it's normalizing the idea of "you can have whatever you want but it'll be just passable enough that you don't regret buying it, and maybe even replace it" in our culture.
One Youtuber used a phrase that stuck with me: "Manufactured E-Waste". That is, the item is so poorly made, with such terrible security or electrical fire hazard, that no one should use it. The item was created new, but can never safely deliver any value to anyone. It goes directly from the factory to the trash heap.
Why buy from any of these sketchy Chinese platforms? I wouldn't feel safe giving them any of my credit/debit card information, let alone being installed on one of my devices.
I'm hearing more talk about legislatively banning TikTok again, just because it is Chinese.
Your first question is a legitimate question except that it contains the word "Chinese". Why buy from any sketchy British platform? Or sketchy Brazilian platform? Or sketchy Texan platform?
I'm not so much trying to defend Chinese companies. It just really irritates me that American companies get a pass. When I think about all the ways the Chinese government could weaponize TikTok against me or my children, it doesn't bother me as much as all the ways Facebook/Instagram/etc can and ALREADY DO weaponize my data against me.
I'm probably just extreme in this way though. When somebody asks me for a phone number of a common acquaintance, I decline. I will always get permission before I hand over that info. Any of these services could require a very short, clearly worded agreement that says they are allowed to sell any information they can guess about you; most of the masses will quickly agree to that and be annoyed that their screen time was interrupted.
Do you think it is less than they offer Coca-Cola or BMW or the U.S. Dept of Forestry?
What kind of access and information do you believe they offer to the USA intelligence services? Why do you think it is ok for one government to have information about you, but not another?
How do you think the Chinese military can use this information against you or people you care about? How do you think the USA government can use this information against you and people you care about? How do you think your local school district or grocery store or your employer can use this information against you? What makes the Chinese military scarier than everybody else?
OK. Maybe the real reason is because other social media giants secretly mount a campaign to eliminate competitors. Or maybe there is some other real reason.
But the stated reason is, "They are Chinese and controlled by the Chinese government."
Maybe I am naive to swallow this public reason, but I also think there are millions of other naive people and a good deal of them get trained by such campaigns to be xenophobes. So even if this is a fake excuse, it does real damage with the culture it builds.
I think the big problem with Amazon is that they stopped caring about the quality and provenance of the products on their platform. Other retailers do exist who have more of a stake in the quality of the goods they sell.
Aliexpress seems fairly safe. And you can get some niche things. Eg, I managed to get replacement headphone ear pads for a good price. Took forever to arrive, but they were cheap enough to risk it. If I ever need a replacement part, I check Aliexpress.
They take Apple pay and you can just use the website. For certain things I'm fine buying since the alternative is paying Amazon a hefty markup for the exact same thing. You just need to be smart about it.
So what are alternatives, Amazon or Ebay? Dunno etsy? Do they use trustworthy payment platforms? At least Paypal has long history of being untrustworthy...
temu's exact same cheap junk is cheaper then amazon's cheap junk but with a $20 minimum spend.
Occasionally you'll find a category that is so marked up compared to actual manufacturing costs that temu seems like a fantastic deal (eg mechanical keyboards).
pretty soon you run out of stuff you want to buy anyway.
IMO, I'd expect to see more international D2C start eating the lunch of US retailers as the D2C companies see they can make more money and still offer lower price points.
If the main value proposition of retailers is importing goods they don't produce and marking them up to sell to Americans, that's a shaky business model, especially in the age of ecommerce.
Are you referring to the USPS’ ePacket service, which subsidizes small packages from Hong Kong and China to the extent that it’s cheaper to ship from there than to ship domestically?
E.g. per [0]:
> As Amazon’s Vice President of Global Policy Paul Misener pointed out:
> “The cost to ship a one-pound package from South Carolina to New York City would run nearly $6; from Beijing to NYC: $3.66.”
> While sending that same one-pound package from New York City back to Beijing via USPS International Mail would cost in the ballpark of $50.
Mass shippers like Aliexpress already stopped using ePacket.
Ali has their own Cainiao. The big companies realized if they do the Amazon model and build their own logistics network for cross-Pacific sea/air freight, the long-term savings are huge.
Even within the US, Amazon already has planes, trains, and automobiles. Why pay USPS and be at the mercy of government bureaucracy when you own your own integrated logistics stack.
I bought something on AliExpress recently and they seem to have changed things up so that there's a second shipping option called "Choice" that only certain items apply to. I'm not sure if they've started putting high-popularity items in stateside distribution centers or what, but they ship these items for free with a $10 minimum order.
Low margin businesses that sell cheap Chinese junk are not sustainable in the long run when you factor in how much of the margin advertisement eats up.
AliExpress has been around since 2010. I'm not saying there's nothing shady going on in their funding scheme, but clearly someone thinks they're worth continuing to pump money into.
Aliexpress is a division of Alibaba Group, which likely makes the bulk of their profits through their B2B sales.
They don't provide separate financials for it, or even its approximate size compared to other components of the group.
My bet is Aliexpress has slightly negative margins up to -5%, and makes up to maybe 10% of total revenue. In other words, it could operate like this forever, being subsidized by more profitable components. It could also be slightly profitable, I'm not sure.
Temu has all of the hallmarks of a "big tent" dark money scheme that rolls in a lot of unseemly business into one constantly-changing target. Big enough to force public awareness of any brand they make up, and obfuscated enough to switch brand names the minute one becomes toxic. It's like a hyper-magnified (possibly government-sponsored) "facebook ad scheme" where they rip off whoever they can and as soon as there's heat, the spin up another website and burn the old profile. Only here, it's a whole new brand, complete with corporate bona fides. Coupled with the reported treatment of specific demographics, there's evidence to suspect a coordinated effort to generate cheap 'knockoff' products (a popular scheme) with slave labor (a common abuse) which are funneled into instant-established brands (the novel addition) to make as much money as possible before the brand has been tarnished, and then swapping the supply chain to a new brand, to obfuscate the malfeasance and absolve themselves of the previous company's responsibilities (the widespread "facebook ad scheme").
So, a billionaire-level version of the bullshit social media scams.
And, okay, fine, I'm a conspiracy theorist for not providing any evidence. But nothing I've presumed is implausible, even if it's not true of Temu. So I suppose commenting about it, here, is just a way to express my concern over what we think could be done if someone was out there doing this.
AliExpress has clearly taken steps to try and regain market share they're losing to Temu. They now have faster shipping options (whereas previously everything I ordered on AliExpress took 4-6 weeks I can get things in 10 days now) and seem to have ramped up their coupons.
[1] https://github.com/jonatron/randomstuff/blob/main/Screenshot... [2] https://en.wikipedia.org/wiki/Pinduoduo
Too much of Amazon is just marked up imports sold by meaningless brands.
Companies like Temu keep happening because Amazon is not operating a cost efficient marketplace and they are vulnerable. Presumably Amazon would win because of reputation and the reliability of their return guarantees, but they’ve lost their trusted status by letting their review systems be corrupted and no longer have the high degree consumer trust that gave them such defensibility.
So, some significant marketplace extraction will happen here as their suppliers essentially move up the value chain and start to eat their market, which looks like company-after-company from supply side countries making an entrance into the Western markets selling the exact same or similar products for much lower prices… exactly what we are seeing.
This flattening out of the supply chain is a phenomenon that Amazon has not done a good job of protecting against.
The only other big defense besides reputation is shipping speed and the risk annd complexity of importing, and perhaps at some point Amazon will wake up and start to lobby against the subsidized shipping policies. But in the short term they benefit from it too much to do so.
IMO, Amazon ought to reconsider the third-party strategy. At the very least, if they want to keep my interest they need a toggle that I can flip which will hide every single product that isn't shipped-from-and-sold-by-Amazon.com.
That said, for however fake or skewed Amazon's reviews are, AliExpress and Temu's reviews are another level of useless. Most of the pictures are simply of packaged items, and the reviews themselves are variations of "Just got it haven't used it yet 5 stars!". My hunch is that they ran promotions to get people to write reviews at some point and got a lot of terrible, useless reviews in exchange.
>As of last month, Temu accounted for nearly 17% of market share in the United States within the discount stores categories, according to data analytics firm Earnest Analytics.
The real question is: why don't people just use AliExpress?
I've since noticed Temu starting to tighten their purse strings a little, as the free shipping minimum is now $20 instead of $10. AliExpress has also responded to the competition and seem to be using stateside warehousing for popular items (or some other magic) to match Temu's ~10 day shipping times, so I've gone back to AliExpress for the most part. AliExpress has a wider swath of product too owing, I presume, to their many years of additional time in the marketplace.
You can sometimes find the EXACT same product for half price. People have been voting that they want cheap not good for awhile now.
Your first question is a legitimate question except that it contains the word "Chinese". Why buy from any sketchy British platform? Or sketchy Brazilian platform? Or sketchy Texan platform?
I'm not so much trying to defend Chinese companies. It just really irritates me that American companies get a pass. When I think about all the ways the Chinese government could weaponize TikTok against me or my children, it doesn't bother me as much as all the ways Facebook/Instagram/etc can and ALREADY DO weaponize my data against me.
I'm probably just extreme in this way though. When somebody asks me for a phone number of a common acquaintance, I decline. I will always get permission before I hand over that info. Any of these services could require a very short, clearly worded agreement that says they are allowed to sell any information they can guess about you; most of the masses will quickly agree to that and be annoyed that their screen time was interrupted.
Tiktok is directly used by Chinese military. Facebook/Google are indirectly pressured.
What kind of access and information do you believe they offer to the USA intelligence services? Why do you think it is ok for one government to have information about you, but not another?
How do you think the Chinese military can use this information against you or people you care about? How do you think the USA government can use this information against you and people you care about? How do you think your local school district or grocery store or your employer can use this information against you? What makes the Chinese military scarier than everybody else?
That's not why.
But the stated reason is, "They are Chinese and controlled by the Chinese government."
Maybe I am naive to swallow this public reason, but I also think there are millions of other naive people and a good deal of them get trained by such campaigns to be xenophobes. So even if this is a fake excuse, it does real damage with the culture it builds.
Occasionally you'll find a category that is so marked up compared to actual manufacturing costs that temu seems like a fantastic deal (eg mechanical keyboards).
pretty soon you run out of stuff you want to buy anyway.
If the main value proposition of retailers is importing goods they don't produce and marking them up to sell to Americans, that's a shaky business model, especially in the age of ecommerce.
E.g. per [0]:
> As Amazon’s Vice President of Global Policy Paul Misener pointed out:
> “The cost to ship a one-pound package from South Carolina to New York City would run nearly $6; from Beijing to NYC: $3.66.”
> While sending that same one-pound package from New York City back to Beijing via USPS International Mail would cost in the ballpark of $50.
[0] https://www.forbes.com/sites/wadeshepard/2017/11/05/how-the-...
Ali has their own Cainiao. The big companies realized if they do the Amazon model and build their own logistics network for cross-Pacific sea/air freight, the long-term savings are huge.
Even within the US, Amazon already has planes, trains, and automobiles. Why pay USPS and be at the mercy of government bureaucracy when you own your own integrated logistics stack.
https://www.reuters.com/business/retail-consumer/key-trade-l...
Source: 11 years in e-commerce.
They don't provide separate financials for it, or even its approximate size compared to other components of the group.
My bet is Aliexpress has slightly negative margins up to -5%, and makes up to maybe 10% of total revenue. In other words, it could operate like this forever, being subsidized by more profitable components. It could also be slightly profitable, I'm not sure.
So, a billionaire-level version of the bullshit social media scams.
And, okay, fine, I'm a conspiracy theorist for not providing any evidence. But nothing I've presumed is implausible, even if it's not true of Temu. So I suppose commenting about it, here, is just a way to express my concern over what we think could be done if someone was out there doing this.