Temu, a subsidiary of PPD, has released its financial report for the first half of the year, showcasing a revenue of $196 billion. This marks a nearly 100% year-on-year increase, surpassing the entire performance of 2023. Wall Street analysts predict that Temu’s turnover could grow by at least 300% in 2024, fueled by its subsidiary’s robust performance. While PPD’s financial report is impressive, it’s important to recognize the fierce business competition driving this high growth.

Over the past six months, Temu’s refund shopping policy has faced criticism from merchants on the platform, leading to frequent complaints. Despite these challenges, Temu has rapidly emerged as a major player in the global e-commerce arena, reaching a scale comparable to Amazon in just two years. In 2023, Temu was also the largest advertiser on Facebook and Google.

Facing the rise of Temu, Amazon has launched a fully managed business model to counter Temu’s low-price strategy. Over the past two years, traditional e-commerce giants like Amazon, eBay, and AliExpress have felt the impact of Temu’s innovative approach. With continuous user loss, they are drawn into a vicious cycle of price wars. Merchants on these platforms are feeling the strain.

A popular market joke sums it up: “In the past, some Americans engaged in zero-dollar shopping at great risks with AKs. With Temu, you can sit at home and effortlessly ‘rob’ merchants through the app.” While humorous, this joke underscores the severe price competition currently gripping e-commerce platforms.

It’s not just merchants on mainstream e-commerce platforms who are affected. Vendors outside these platforms are also feeling the pinch. Feedback from some of our long-term partners—brands like Travelpro, Samsonite, and Away—reveals that sales on their official websites have dropped significantly. High-end aluminum luggage, which used to sell for $300 to $800, now has to be slashed by 50% to maintain sales. Advertising costs are climbing, and profit margins are shrinking. In response, these established brands have been forced to introduce more affordable product lines.

As a key manufacturer for these top luggage brands, we are also feeling the impact. We have been compelled to cut costs at every stage of production and reduce our ex-factory prices to navigate these challenging times.

PDD isn’t just China’s biggest e-commerce platform; its subsidiary Temu is experiencing explosive growth. It’s edging out traditional giants like Amazon and eBay and is on track to become the leading global cross-border e-commerce platform. For the past two years, its app has consistently topped download charts in major app stores worldwide, growing at an unstoppable pace.

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