It is estimated that 152 million Americans use Temu every month.

A record 123 million Americans watched the Super Bowl this year, the final of the United States’ premier football league. Alongside witnessing the country’s biggest sporting event, a major halftime show, and numerous clips of Taylor Swift in the crowd, they were also exposed to six 30-second commercials for Temu — a Chinese e-commerce company.

The Chinese retail giant has faced criticism from politicians in the UK and the US. An investigation by the American government concluded that there is an “extremely high risk” that products sold by Temu may have been made using slavery-like labor conditions.

Temu claims it strictly prohibits the use of forced, penal, or child labor by all its sellers.

The company, which sells a wide range of products from clothing to electronics and furniture, was launched in the US in 2022 and later in the UK and other parts of the world.

Since then, the platform has consistently topped global app download rankings, with nearly 152 million Americans using it monthly, according to analytics tool SimilarWeb.

Retail analyst Neil Saunders describes it as “Amazon on steroids.”

With the slogan “Shop Like a Billionaire,” the platform’s popularity has skyrocketed, expanding its delivery services to approximately 50 countries worldwide.

Aggressive Marketing

A typical 30-second Super Bowl commercial costs around $7 million. During this year’s event, Temu aired six of them.

“It’s a significant investment for such a short commercial,” notes Saunders. “However, it reaches a vast audience, and we know that following these ads, Temu’s downloads increased significantly,” he adds.

Data from SimilarWeb indicates that the platform’s global unique visitors increased by nearly 25% on Super Bowl Sunday compared to the previous Sunday, with 8.2 million people browsing the site and app.

During the same period, visits to Amazon and eBay dropped by 5% and 2%, respectively.

“Additionally, they’ve heavily invested in micro-marketing, persuading influencers to promote products and recommend shopping on the platform through social media platforms like TikTok and YouTube,” says Saunders.

These influencers typically have fewer than 10,000 followers, as noted by Ines Durand, an e-commerce specialist at SimilarWeb.

“Micro-influencers have engaged communities, which means their endorsements foster substantial trust in products,” explains Durand.

Temu is a subsidiary of the Chinese giant Pinduoduo Holdings, described as “a Chinese e-commerce powerhouse” by Shaun Rein, founder of the China Market Research Group.

“In China, practically everyone buys products on Pinduoduo, from speakers to T-shirts and socks,” Rein states.

From Production to Consumer

The company is competing with Alibaba for the title of the most valuable Chinese company listed on the US stock market. Its current valuation stands just below $150 billion.

With the Chinese consumer market firmly under its control, Pinduoduo Holdings has expanded overseas with Temu, using the same model that propelled its previous success. According to Rein, who resides in Shanghai, the company has become a source of immense pride and patriotism for the Chinese.

“[The Chinese] take pride in seeing their companies outperforming US e-commerce giants like Amazon,” he says.

A quick browse through the Temu app or website reveals a broad range of products, from steel-toe shoes to devices designed to help elderly individuals and pregnant women put on socks. According to Rein, this product diversity is almost entirely manufactured in Chinese factories.

“Temu employs an impressive system based on large-scale data collection,” says Durand.

“They gather insights on consumption trends, the most sought-after and clicked-on products, and make this data available to individual manufacturers.”

While Amazon charges manufacturers a premium for such data, Temu provides it for free — information manufacturers use to “test the market” with a relatively small number of products.

The platform frequently uses AI-generated images to stay aligned with the latest trends, meaning the advertised product may not yet exist, according to Durand. These products are later shipped to consumers by air.

“This means the products don’t need to be stored. They skip the warehousing process and are sent directly to the customer via airplane,” Durand explains.

Tax Loophole

Last year, a third of packages shipped to the US, taking advantage of a tax loophole, came from Temu and its competitor Shein, as revealed in a US Congressional report.

Many countries set a threshold for tax exemption on international purchases, a measure intended to help citizens import goods.

These companies exploit a tax exemption for purchases under $50, originally meant for shipments between individuals. Domestic retailers have lobbied to eliminate this exemption, but the measure is criticized by consumers drawn to the low prices of Asian virtual stores.

Temu, which ships products directly from factories to consumers, bypassing intermediaries, benefits from similar advantages in markets like the US and UK.

However, new regulations may be on the horizon to close loopholes in international trade, notes Mickey Diaz, COO of global freight company Unique Logistics.

“The UK has already started scrutinizing Temu, including the sale of items that wouldn’t otherwise be allowed in the country, which were being imported due to these loopholes,” she explains.

Temu also faces criticism over its supply chains, with UK and US politicians accusing the e-commerce giant of allowing products made with slavery-like labor conditions to be sold on its site.

Last year, British MP Alicia Kearns, chair of the Foreign Affairs Select Committee, told the BBC she wanted a stricter review of the online marketplace to ensure “consumers aren’t inadvertently contributing to the Uyghur genocide.”

Kearns, a member of the UK Conservative Party, referred to alleged human rights abuses by the Chinese government against the Uyghur people and other ethnic and religious minorities.

Temu, in response, asserts that it “strictly prohibits” the use of forced, penal, or child labor by all its sellers.

The company also stated that any business partner must “comply with all regulatory standards and compliance requirements.”

“Merchants, suppliers, and other third parties must pay their employees and contractors promptly and abide by all applicable local wage and hour laws,” a company spokesperson said.

“Our current standards and practices are no different from those of other major e-commerce platforms that consumers trust, and allegations to the contrary are entirely unfounded,” the representative added.

Despite the controversies, analysts foresee even greater expansion for Temu.

“We’ll likely see the company begin diversifying its offerings, possibly investing in slightly higher-priced products,” predicts retail analyst Neil Saunders.

According to Shaun Rein, the focus will be on capturing an even larger market share.

“In the next two or three years, their strategy will simply be to build brand recognition and market share. They’re not concerned about profits,” he says.

“That’s exactly what happened with Pinduoduo when it launched in China. They offered extremely cheap products just to gain market share.”