🇧🇷 Temu Expands to Brazil
Last Wednesday, June 5, 2024, Temu went live in Brazil. This expansion brings Temu’s presence to 70 countries. Brazil, with its 216M population and strong economy, is a key market for cross-border platforms from China. Temu's launch follows a trend among major Chinese platforms like SHEIN, AliExpress, and Shopee, already operating in Brazil.
📊 New Tax Legislation
Temu’s entry into Brazil coincided with new legislation imposing a 20% additional tax on cross-border parcels under $50, adding to the existing 17% ICMS. Despite the total effective tax rate of over 40%, Temu proceeded with its launch, initially planned for May 31. The company's determination indicates its confidence in navigating Brazil's regulatory landscape.
✈️ Full Consignment Strategy
Temu is utilizing a full consignment model to ship parcels from China to Brazil, offering competitive prices. This strategy aims to quickly attract Brazilian consumers. However, similar to its US operations, Temu might shift to a semi-consignment model, using local warehouses for faster delivery and reduced political pressure. Recent US customs issues highlighted the risks of direct cross-border shipments.
💼 Aggressive Market Penetration
To support its expansion, Temu employs numerous business developers to streamline processes with suppliers and sellers. “One of them just sits in my office and refuses to leave,” shared a Guangdong-based seller. Temu’s approach, leveraging Pinduoduo’s core management expertise, reflects its commitment to overcoming challenges and establishing a strong market presence in Brazil.
Will Temu overcome the challenges in Brazil?
