With the tempting offer of making purchases at a lesser rate than they would on other sites, even loyal customers are tilting towards bargaining shopping sites such as Temu.
This plus the numerous competitions in the field is making it hard for most e-commerce businesses to remain in business.
While it could be overwhelming, with the right information and strategy in place, it is not impossible for your business to compete with the big fish in the e-commerce ocean.
How Does Temu Affect the Dropshipping Industry?
Similar to notable Chinese shopping platforms like Wish, the e-commerce site, Temu offers wholesale prices on many products ranging from beauty products, and fashion to electronics and gadgets.
Temu became a hot topic in the e-commerce industry following its massive wave against the tides of major brands like SHEIN, Wish and Alibaba with a GMV OF $14 billion in 2023 after its launch in September 2022.
The brand had over 161 million app users across the world and over 19 million app downloads in 2023 alone.
And from source alliance Bernstein, the brand was able to boost the market value of its parent company, PINDUODUO by 74% in just a year.
According to its slogan ‘Shop like a Billionaire’, Temu offers its customers a site where they can get goods for as low as 1 cent, making it the platform of interest for e-commerce businesses modeled on dropshipping.
In addition to this is its free shipping and returns which is thanks to Pinduoduo Holding’s vast network of suppliers and shipping partners.
How to Compete with Temu as An eCommerce Seller
With the ultra-low prices on Temu, accredited to its China factory-to-customer products, attempting a slash in your prices is an unsustainable way to beat the brand.
However, there are 11 tested ways by which you can position your e-commerce business to compete with the brand- Temu.
1. Build your brand
For Temu to get this far, it created an identity with which its audience can relate with the brand.
From the brand’s bright orange color, name, logo, slogan, as well as value and proposition, it is not mistaken for another.
When customers can recall and identify distinctive elements that represent your business effortlessly, it shows that better days are ahead.
To establish your business as a thought leader in the e-commerce industry and even compete with a big brand like Temu, you need to create a space for your business in the minds of your customers.
The identity you are able to create for your business is what separates your business from the others even when you offer the same thing that they do.
2. Analyze Temu’s operation
To compete against any business, you need to take time out to study your competition, what is their strength and where they fail.
Regardless of how the business looks on the outside, Temu like other businesses would have some limitations your business could thrive on.
You can get important information by checking the reviews of their customers to know what complaints they have as well as analyzing their web performance to get insight on what they do and how it yields for them.
While Temu brags about offering cheaper goods, there have been comments about customers getting the wrong packages, plus their unresponsive customer service.
These are a few points you can work on to offer a better solution to your audience.
3. Create a formidable product
Product here is beyond commodities but also the expectations you sell to customers when they visit your online store. This includes the problems you solve and what you stand for.
While Temu hosts several kinds of commodities like other e-commerce sites, its highly discounted rate and reward system sells it apart.
Temu focuses on customers who would prefer to save money with its cheap goods and free shipping, particularly those in the United States and Western Markets.
Even with its Standard shipping of 6-22 days and Express shipping of 4-11 days which is slow, some customers prefer the option of having to spend less.
However, there are different types of customers, so instead of slashing your prices or giving free shipping services, know what your audience wants and needs the most, then serve them from there.
4. Do something different
Every business invention is a modification to something already existing, similarly, there’s no new product, only a better modification to an already existing one.
The world is evolving with each passing second and the only businesses that might survive to tell the story are those invested in innovation and open to adapt to the diverse needs of customers.
To be different, you need to find out what difference people are interested in. Investing in a specialization that can influence your customers’ decisions would offer your business a strong competitive advantage with the many options available.
Aside from its cheaper price, Temu’s factory-to-customer goods eradicate the hassle that comes with using a middleman by linking customers directly to the supplier/manufacturer.
You can decide on what you can do to differentiate and capitalize on that.
5. Grow your presence
An e-commerce business not maximizing the tools and platforms available online for marketing and advertising is out to reduce its lifespan.
With so much information out there, you need to get your business to the limelight to be seen and even remembered.
An investment in marketing and advertisement is an effort that continues to yield over time. Understanding this, Intentional businesses plan a great portion of their budget on getting their businesses out there before their audience.
Believed to have followed the aggressive marketing strategy of Tiktok, Temu had spent a marketing budget of $2-3 billion in 2023 alone to establish its brand, this accounts for its numerous app downloads and omnipresence now.
Even without a robust budget, you can plan a marketing strategy using what you have.
There are diverse platforms and tools both free and paid that you can utilize to gain publicity. You can do this via:
- Free ad campaigns on eBay, Yelp, Craigslist, Google business profile, etc
- Paid ad campaigns on Google, Pinterest, YouTube, etc
- Social media platforms
- Partnering with brand influencers
6. Enhance your customer acquisition and retention
There’s no competition without your customers. Customer acquisition and retention is a major key performance indicator that tells how well your business is surviving.
Coming up with effective strategies on how to attract new customers is very pivotal in this race.
This could involve:
- Targeted marketing
- Utilizing SEO tools on your website
- Using lead market
- Referral marketing programs
As much as getting new customers is important, the ability to retain existing customers not only saves costs but also indicates the sustainability of your business’s customer relation management.
This can be done by:
- delivering as promised
- enhancing customer service
- encouraging customer’s feedback and review
- Curating a reward system for loyal customers
7. Decide on the suitable fulfillment method
Choose the best fulfillment method to get your customers’ orders across to them. Deciding on the suitable fulfillment method for your e-commerce store would depend on various factors including:
- The products you offer
- The size of your business
- The available resources
Due to rapid turnover, bargaining sites like Temu are unable to maintain a consistent availability of goods. To capitalize on this, you need to ensure that whichever method you choose eliminates stockouts in your operation.
Ensuring this can make your business a better option for their disappointed customers.
8. Collaborate with like-minded person
Another important resource to leverage would be people. From employees to suppliers and other third parties, ensure to do business only with people who support your agenda.
Unlike in a one-man operation, working alongside other people reduces the control you have over your operations and final delivery, so the best you can do is get the right people.
The major concerns customers have of e-commerce business are getting quality goods and trusted delivery, hence the right product source, and a reliable drop shipping, logistics, and inventory management a must-have.
To guarantee this, a dependable company such as Globallyfulfill is needed to help you source the best quality of product (clothing), as well as premium logistics and fulfillment service that ensures your customer’s order is delivered with utmost care.
This ensures that you don’t default on any of your customers’ orders and lose their trust.
9. Develop a personalized customer experience
In the end, if your business goals are not centered on serving your customers efficiently, the chances of your survival are slim.
One of the limitations of big brands is that most have lost touch with how to relate to their customers on a personal level.
And from various decisions you make as a business person, you would agree that relationships influence loyalty, so this is where you can step up your game.
Some ways to personalize your customer’s experience with your business would include:
- Avail multiple means of communication
- Implement a tailored e-mail marketing plan
- Make your e-commerce site optimized for humans and user-friendly
- Improve your automated response to have the human feel
10. Have a Reward system
This does not only make your customers loyal to your brand but when done skillfully could as well make them active advocates for the brand.
This can be seen with the series of rewards on Temu’s website by which it gets its customers to carry out various activities such as downloading its app, leaving reviews of products, referring other people, and engaging on its social media platforms.
Your reward system could involve:
- Running a Flash sale
- Members coupon
- Discounts
- Cashback programs
- Omnichannel loyalty programs
11. Improve base on Customers’ feedback and needs
Whether you control the operations of your business solely or you have people working for you, operate your business to always give the best to your customers.
Just as you need to study the operations of Temu, the same goes for your business as well.
Focus on the reviews on your website as well as your web performance to know your customers’ concerns and troubles. This helps you to not only improve on what you offer but also on serving your customers as they want.
A good way to do this is by positioning your business to be customer-centric. Running a business with your customer as the focus makes it easy to redirect and adapt as needed.
Conclusion
Temu like other big brands didn’t spring up in a day, so you can’t expect significant results regardless of the efforts you put in a day.
Temu is not the first shopping site with cheap prices and it won’t be the last. Regardless, with the right information, numerous small e-commerce businesses including yours can survive and even thrive.
