In today’s fiercely competitive e-commerce field, various models and strategies are constantly being innovated. As an important participant in this field, Temu has launched a semi-hosting model after implementing full hosting. There must be many considerations behind this. Let’s take a look at the possible reasons why Temu launched semi-hosting after full hosting?
1. Change the previous low-end and low-price image, vigorously enrich the medium and large SKUs, and change from simply pursuing good and economical to pursuing more, faster, better and cheaper. Perhaps some people still remember that when it first emerged in China, it relied on agricultural products to attract traffic and sold apples from Shandong. Now, with 10 billion subsidies, it sells apples from California Jobs.
The same is true overseas. TEMU’s ambition is not limited to the sinking market, but to adopt a strategy of attacking from the bottom up and surrounding the city from the countryside. From “relying on low prices to make a living” to “going overseas with quality and price ratio”, TEMU is replicating the successful path of its parent company: first open up the market through low prices, then enrich the variety of goods, first pursue volume, then improve experience, first expand on a large scale, and then work hard. The full trusteeship model controls the supply chain, focusing on quality and economy, while the semi-trusteeship plus overseas warehouses mainly focuses on speed, quality and economy.
2. Vigorously compress logistics timeliness and earn turnover benefits. The semi-trusteeship model cuts off the most time-consuming “acquisition, handling, and closing” parts. Once the buyer places an order, he can immediately access the local warehouse and distribution system, and the logistics timeliness and experience have been qualitatively improved.
In the past, in order to save costs, buyers had to wait for nearly 10 days. Now there is no need to worry about it. The efficiency of overseas warehouses is not much slower than FBA. Who can resist the temptation of saving money?
With TEMU’s rapid expansion style like cavalry, self-built logistics is a heavy asset model, and it requires years of accumulation and precipitation. Therefore, releasing warehouse and distribution resources to make up for the shortcomings in timeliness is also a strategy to use the power of others to conquer the solid walls of the FBA logistics empire.
3. Reduce losses and risks. Platform operation is essentially doing business, and business only values the input-output ratio. Although the full trusteeship model controls the quality and low prices, TEMU itself also faces huge costs. Having capital investment does not mean blind investment.
For example, on the eve of last year’s peak season, there were as many as 50,000 pickers in TEMU’s Guangdong warehouse alone, not to mention the huge audit team, customer service team and other human costs, as well as the risks brought by air logistics costs and product selection inventory.
Therefore, the semi-trusteeship model transfers the costs of product selection, logistics and customer service to the sellers, allowing the sellers to participate to a certain extent, and both parties share the risks, sharing the good and the bad.
4. Attract European and American sellers to settle in. Under the full trusteeship consignment model, although the price is suppressed to an extremely low level, only Chinese factories can afford this low price.
The local inventory model can attract some American sellers to join, just like Amazon. This may also be a “golden card” for TEMU to face policy pressure in the future, and it can rely on the forces of all parties to deal with policy restrictions.
In short, Temu launched the semi-hosting model based on comprehensive considerations of many factors, in order to adapt to market changes, meet different needs, optimize cost structure and stimulate the vitality of sellers, so as to maintain a leading position and achieve sustainable development in the fierce e-commerce competition.