Analysis of business model and key technologies of Temu e-commerce platform

Temu is an e-commerce platform with “ultimate cost performance” as its core positioning. Through its unique business model, it provides consumers with cost-effective products and provides supply chain services to sellers. This article will delve into Temu’s business model, core technology requirements, operational logic and marketing strategies.

1. Temu’s business model

1. Business model overview

Temu adopts a business model similar to “escrow”. The platform has the final power in core aspects such as product pricing, sales, contract fulfillment and after-sales service, while sellers are mainly responsible for supply. Its business model includes but is not limited to:

• Seller’s quotation: Domestic sellers provide product base prices based on recruitment categories;
• Send sample for review: The seller will send the sample to the Guangdong warehouse for professional tasting;
• Seller supply: After passing the review, the seller needs to provide 20-50 items to the Guangzhou warehouse;
• Platform sales: Temu is responsible for listing, sales, shipment and distribution, and unsold products will be returned within 15 days;
• Sign for payment: Payment will be settled within 7-9 days after the goods are delivered.

2. Core positioning

Temu is positioned as “the ultimate cost-effectiveness”, especially in the two core categories of clothing and daily necessities, showing significant price competitive advantages. The specific performance is as follows:

• Price competitiveness: Compared with SHEIN, Temu’s product prices are usually 30%-50% lower;
• Absolute price comparison advantage: Continuing Pinduoduo’s cost-effective strategy for domestic sites, emphasizing low prices to attract customers.

3. Marketing customer acquisition strategy

Temu adopts multi-channel marketing methods to attract customers:

• Content-based traffic: Display products through social media platforms to arouse interest;
• Affiliate Marketing: Invite partners to promote the platform and provide rebate commission;
• Note: In the US market, group sharing does not work well because local users value privacy.

4. Fulfillment and logistics model

Temu is committed to ensuring efficient order processing and timely delivery:

• Domestic unified warehouse distribution: Encourage sellers to centralize goods to Guangzhou warehouse;
• Cross-border direct mail: Cooperate with third-party express service providers to achieve fast international transportation;
• Overseas last-mile delivery: There is no overseas warehouse at this stage, and the last mile delivery is completed by the local postal service or DHL;
• Diversified delivery options: Supports various methods such as postal parcels and commercial express delivery.

2. Key technical requirements in Temu’s business model

In order to support the above business model, Temu relies on a series of key technologies:

1. Supply chain technology

Establish an efficient and reliable supply chain management system, covering functions such as supplier management, order processing, inventory control and data exchange, to ensure that the entire process from product selection to delivery is smooth and smooth.

2. Refined pricing technology

Use advanced algorithms to monitor market price changes and adjust selling prices based on market demand forecasts to maintain “extreme cost performance.”

3. Data analysis and AI technology

Use big data to analyze user behavior, build user portraits, develop intelligent recommendation systems, implement precision marketing strategies, and improve user satisfaction.

4. Marketing and promotion technology

Expand brand influence and increase user stickiness and purchase intention through social media, content marketing, KOL cooperation and other methods.

5. Logistics and warehousing technology

Build an advanced warehousing management system, optimize transportation route planning, ensure fast and accurate delivery of goods, and improve logistics efficiency.

In short, Temu stands out in the e-commerce field through its unique business model, clear value proposition, diversified marketing channels and solid technical foundation. For novice sellers who want to join the platform, it is crucial to understand and apply the above technologies, which will help increase product sales and profitability.