Temu launches its EU marketplace, offering no fees for sellers and taking over pricing. European retailers are encouraged to join, while Temu's local warehouses pose a new challenge to Amazon, Otto, and Kaufland.
Temu has officially opened its doors to European retailers from Germany, France, Spain, Italy, and the UK. Since late July, retailers have been able to join the marketplace without paying any fees. This includes no basic fees, sales commissions, or advertising costs. This attractive offer is designed to encourage businesses to join quickly, although it's uncertain how long these conditions will last. A response from Temu on future fee plans is still pending, as reported by Online Retailer News.
Retailers are required to set a base price for their products, but the final sale price is determined by Temu. The specific factors that influence Temu's pricing decisions remain unclear. In addition to pricing, Temu handles multilingual customer service and extensive marketing across multiple channels. This level of support could be particularly beneficial for small and medium-sized enterprises (SMEs), helping them reach a wider audience. Temu boasts 213 million monthly visitors in the EU, a significant advantage for any retailer looking to expand their reach.
Temu's focus on establishing local delivery hubs in Europe has made it a formidable competitor to Amazon. The "local" badge now appears on many products in Temu's marketplace, promising delivery within a few working days. This is a marked change from Temu's previous reliance on shipping directly from China, which had drawn criticism for long delivery times and environmental concerns. The presence of local warehouses allows Temu to offer faster shipping, which is increasingly important in today's fast-paced market.
Temu's strategy of undercutting competitors like Amazon is becoming more evident. Some brands have started selling on both Amazon and Temu, but with lower prices on Temu. As consumers begin to notice the similarities between the two platforms, especially with pricing and delivery speed, the competition between Amazon and Temu is likely to intensify. E-commerce expert Andreas Frank highlights that for consumers, the line between Amazon and Temu is starting to blur, as both platforms offer similar benefits, but Temu’s aggressive pricing might tip the scale.
Will Temu's aggressive pricing disrupt the EU market?
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