Temu, an online marketplace backed by Chinese e-commerce group PDD Holdings, has officially entered the Philippine market to challenge the dominance of existing players in the country, including Alibaba’s Lazada, Singapore-based Shopee, and ByteDance’s TikTok Shop.
The US-founded budget shopping app startup marked its foray in the Philippines without much fanfare but offered up to 90% off on items such as T-shirts, double-sided tape, and kitchen storage appliances, its website shows.
The discount strategy has already been in the playbook of Temu, which climbed to the top of Apple’s App Store and Google Play’s free-app rankings, according to reports. The online marketplace launched in the US in 2022.
Temu ships its products from a global network of suppliers and manufacturers, using experienced and reliable logistics partners. Its shipping origins can vary depending on the product being purchased.
However, Temu works with package carriers like UPS, FedEx, and USPS to ensure that all orders are delivered promptly and securely to customers.
The company’s name comes from the phrase “TeamUp, Price Down,” which refers to Temu’s next-generation manufacturing business model. It partners with sellers and brands to help design products and streamline supply chains.
Using advanced analytics, the company shares consumer insights directly with manufacturers so they can adjust product design and procurement strategies to optimize inventory and better respond to consumer demand.
In the US, Temu sells products across 29 major categories and over 250 subcategories. The products range from fashion to electronics and automotive supplies, and they often approach wholesale prices.
Temu’s Philippine entry forms part of the company’s efforts to expand its business across Asia. Last month, it entered Japan and South Korea and is now looking at setting its footprint in less wealthier economies in the region.
Analysts said Temu is mainly targeting SHEIN, which has been doing well in the Philippines, but Shopee and Lazada, the incumbent marketplaces in the country and Southeast Asia, also need to defend their market leadership.
According to the E-commerce Platforms in Southeast Asia 2023 report published by Momentum Works, the Philippines is the third-largest e-commerce market in the region by gross merchandise value (GMV) last year.
For the entire Southeast Asia, the e-commerce market is projected to hit about $230 billion in GMV by 2026, according to an article earlier published by global management consulting firm McKinsey & Co.