Last week, Earnest Analytics dropped a bombshell case study on Temu, showing its rapid ascent in the ecommerce world, challenging incumbents like Wish and AliExpress, and the underwhelming impact of its Super Bowl ads. Despite an impressive 840% sales growth, Temu's battle with retail titans Amazon and Walmart is just beginning.
In a jaw-dropping display of ecommerce muscle, Temu's sales skyrocketed by 840% between January 2023 and 2024, peaking with an 1100% surge during the holiday season. Within its first year, this powerhouse not only outpaced Shein in the US but also boasted a higher customer lifetime value than Walmart. Talk about a shopping spree!
Despite shelling out big bucks on Super Bowl ads in both 2023 and 2024, Temu's efforts to woo new and existing customers fell flat. According to Earnest's data, the ads didn't convert into the sales spike they hoped for, showing that even the biggest stages might not guarantee a win in the ecommerce game.
Temu isn't just about attracting eyeballs; it's keeping them glued. With over 28% of customers returning 16 months after their first purchase, Temu's retention rates are soaring high above Walmart and Target, though still chasing Amazon's tail. This "retention smile" curve showcases how Temu keeps shoppers coming back for more.
Here's a kicker: nearly half of Wish and AliExpress's customer base is playing the field with Temu. This newcomer is not only siphoning off customers from online discounters but also making inroads into the clientele of TikTok Shop, Ollie’s Bargain Outlet, and even traditional dollar stores. Temu is stirring the pot, signaling a shift in where discount seekers drop their dollars.
❓ Will Temu disrupt more retail giants?
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