Олексій Дзюба Історії 10 January 2025, 17:58

"Grabs attention every second, it's like TikTok." How Temu sells us more goods than we really want

Temu online marketplace, whose advertisements have been seen repeatedly on social media and which the EU is already worried about, organizing an investigation against it, has signed a partnership agreement with Ukrposhta. It is reported that as of January 9, more than 1.5 million shipments have already been delivered within the framework of the cooperation.

However, Co-founder and Head of the Aurora network Taras Panasenko called such cooperation «shopping without borders, without delays and without any taxes in Ukraine». According to him, the conditions under which foreign marketplaces operate lead to discrimination against Ukrainian manufacturers and retailers.

Even earlier, dev.ua prepared a material about Temu’s work. We remind you of the details we have collected.

(text from November 25, 2024)

Cheaper and cheaper again

Maria and her husband Yevgeny go to one of the stores of the Ukrainian household goods chain to buy a Christmas tree for the New Year. Walking between the rows of «green beauties», they find the one they like. Its price is a little more than UAH 1,000. After consulting, the couple decides to find a cheaper option on Temu. There, a similar Christmas tree costs a little more than 500 hryvnias.

«We will have to wait a little for the delivery, but the product cost us almost 2 times cheaper. A great option during the war in Ukraine, when everything around is getting more expensive,» says Maria in a comment to dev.ua, sharing a screenshot:

Kateryna shared another story with us. She used the Temu app for the first time this month, looking for an insulated cat house. Having found the desired option, the platform immediately offers her to additionally buy several products with a discount of 70%. If she does, she will have 3 free gifts. To determine exactly which prizes these will be, you need to «spin the wheel» (like in a lottery):

In the end, Kateryna’s final check is $46 (and seven items) instead of the «clean» $22 (and one item) that the house cost separately.

«We directly connect consumers with producers, eliminating middlemen, their markups and additional costs. Thanks to the optimization of the supply chain, the saved funds are passed on to customers in the form of lower prices,» the company replied to dev.ua, explaining why such low prices on the site come from.

«The so-called „wheel of fortune“ used by Temu is a marketing mechanism. There are even separate sites where you can create your own „wheel“ by integrating it into your own platform,» said psychiatrist, psychotherapist, speaker Oleksiy Krapyvka in a comment to dev.ua.

The expert adds that such a tool is widely used in games and gambling platforms. It creates interest and helps better engage users.

«Wheel of Fortune» often promises a guaranteed win. In fact, the user receives a small reward or bonus, which encourages him to further participate,» the specialist noted.

«I learned about Temu from advertisements, there are many of them on Instagram. I also read reviews and watched videos about him. Opinions about Temu differ. Someone said that it’s cool, others that it’s «the bottom», Yulia, who has been using Temu for three months, says in a comment to dev.ua.

In the summer, the girl had a vacation and urgently needed some goods. An acquaintance recommended Temu. Julia decided to play it safe, as she was placing an order on the platform for the first time. That’s why she chose the product in Ukraine, which arrived on time at the Novaya Poshta branch. Yulia received the goods. The girl was satisfied with the service, unlike the countries of Europe and the USA, which see Temu as a threatening competitor.

The West is deeply concerned

Today, some countries are deeply concerned about Temu’s aggressive global expansion. Here are just a few numbers that prove the power of the Chinese online marketplace.

Temu is owned by PDD Holdings, a global commercial group founded by Chinese billionaire Colin Huang. He first created Pinduoduo, a domestic Chinese e-commerce platform, which took off in 2020 during the Covid pandemic. Temu was launched in 2022 with the slogan «Buy like a billionaire». Its international expansion began in the USA (the company has its head office in Boston), now the marketplace operates in 50 countries.

Temu sells about 25 million products directly from Chinese sellers. Last year, Temu was the eighth most downloaded app in the world, the first in the US. This year, growth rates in Europe have already exceeded those in America. On the European market, five countries — Great Britain, France, Germany, Italy and Spain — account for 75% of the total volume of European orders.

When asked by dev.ua whether the platform works in the Russian market, the company replied that «Temu is not available in Russia.»

As of the first quarter of 2024, the Temu app had 167 million monthly active users worldwide. Growth, compared to the first quarter of 2023, by 614%. In September, the number of monthly visits to the Temu website reached 565 million.

Temu’s sales for the first 6 months of 2024 reached approximately $20 billion, surpassing full-year 2023 sales of $15.33 billion. Temu invests almost $500 million in marketing and promotion every quarter.

The expansion of the Chinese platform has affected the American tech giant Amazon, which is launching a new Haul store with goods under $20 to compete in this niche with Temu.

The popularity of Temu is also concerned in Indonesia, where Google and Apple have been asked to block the application in the country. «We are not here to protect e-commerce, but we are protecting small and medium-sized businesses. There are millions of people that we have to protect,» said the Minister of Communications of Indonesia.

In May 2024, the European Commission classified Temu as a «very large online platform». It has more than 45 million monthly active users in the EU. In September, Temu claimed 92 million users.

In October of this year, the European Commission began an investigation into alleged violations of the requirements of the European Digital Services Act by the Temu platform. The European Commission will investigate, in particular, whether the design of the platform causes addiction among users and whether the service sells prohibited goods. The commission will analyze product recommendation systems and data availability for researchers.

One of the countries asked Apple and Google to block Temu. What are the complaints about the Chinese application

Appearance

We decided to help the European Commission and analyze Temu’s design from the point of view of increasing sales.

«Temu is an example of an aggressive, but extremely thoughtful design that uses psychological triggers, interactivity and gamification to involve the user in the shopping process,» Roman Sevastyanov, co-founder of Awesomic designer recruitment service, said in a comment to dev.ua.

«The psychology of buying Temu is built on the principle of „grab attention every second“, it’s like TikTok.»

«Each element of the interface is thought out by designer psychologists to keep the user,» the specialist explains.

The expert drew attention to the constant emphasis on urgent offers («Only 5 left», «Promotion ends», etc.) creates FOMO (syndrome of missed opportunities — ed.). Such «urgency» is supported by social proof (11,000+ sold, ratings, etc.). Together, this builds trust and drives purchases.

«Gamification through mechanics, like the wheel of fortune, creates excitement and makes you want to interact with the application. Pop-ups keep the focus and push to the next step (for example, «Add to cart», «Price reduction», etc.), explains Roman.

Add to this a massive attack of offers (for example, «discounts up to 90%», «free shipping», «returns up to 90 days», etc.), which create the feeling that shopping here is always profitable and pleasant colors (bright orange motivates to action, green — adds confidence) and you are already there among Temu fans.

For people with a gambling addiction, the wheel of fortune is a direct associative pathway to gambling. It can become a trigger for repeated behavior. For example, impulse purchases. They will not take place for the sake of the product, but to «spin the wheel,» says Oleksiy Krapyvka.

The expert explains that the visual appearance of the «wheel» creates the impression that the chances of winning a high prize are significant. But it is not so. Such a «trick» only exploits a person’s cognitive errors (evolutionary «bugs» of the brain that cannot help but happen, there are about 100 of them — ed.), forcing him to believe in winning.

«Every time a person spins the wheel, dopamine is released, which is associated with the expectation of a reward. Even if the result is disappointing, the process itself makes you want to repeat the action,» explains psychiatrist, psychotherapist, speaker Oleksiy Krapyvka. Therefore, such an offer will attract more and more people with addictions.

«The use of ``psychological tricks'' consists in the fact that additional bright colors and a sense of participation in the game cause emotions of excitement in the buyer, reducing critical thinking. People suffering from ludomania can relapse from this (recovery of the disease — ed.), Oleksiy Krapyvka noted.

According to the specialist, Temu uses elements that are present in online casino slots. In this way, a certain hybridization of marketing moves takes place.

Returning to Temu’s design, among its weaknesses, Roman Sevastyanov singled out:

— An excessive number of elements that can overload the user;

— Permanent discounts raise questions about the real cost of products.

«Their discount strategy is like a trap that creates a habit of choosing Temu as the main shopping platform. This is an effective approach to attract an impulsive audience, but can cause distrust due to overload and constant «promotions».

He also noted that Temu lures, collects data about the user and teaches how to use the application. The goal is that the next time something is needed, the user goes to Temu, and not, for example, to Rozetka.

Is Rozetka worth worrying about?

Last year, Forbes published a ranking of the largest e-commerce players in Ukraine. The first place in it was taken by the Rozetka online store and marketplace with a turnover of UAH 45 billion and a traffic of 398.5 million visits. The company’s revenue in 2023 reached UAH 25.4 billion.

According to the latest data, Rozetka’s revenue for the first half of 2024 increased by 21,8% to UAH 13.1 billion. At the same time, the company’s loss increased from UAH 2.2 million to UAH 64.9 million.

Is the Ukrainian e-commerce giant a competitor of Temu?

«It is very difficult to compare us with Temu. Temu is like an aggressive AliExpress, and it is with them that you can compare. Also, Temu is finding something that seems cheap, and then it’s just luck.»

«The lottery is about them (by the way, the correct move from the point of view of marketing is to strengthen the image of the lottery with a bonus wheel). Whereas Rozetka is about the expected result,» Andriy Kovalevskyi, Brand Manager of Rozetka, said in a comment to dev.ua.

«On AliExpress, you place orders from different sellers, they send you one package at a time, you go and pick up each one. In Temu, all goods are sent assembled in one large package, this is the first plus. The second plus is a single support service that solves all questions: where is the product/what to do, when the quality is bad/delivery time, etc. It bribed me a lot,» says one of our heroines, Yulia.

«We have not thoroughly analyzed their product yet. But from our experience and from their communications, it seems to be a completely different product. In my opinion, Rozetka is much more convenient, quality content, product reviews from real buyers, video reviews, etc. d.,» says Andriy Kovalevskyi.

Brand Manager Rozetka believes that Temu is not a direct competitor of the Ukrainian company. «They are in direct competition with AliExpress, we do not directly compete with both of them,» the specialist concluded.

Good for everyone

«The Temu website shows in great detail and in percentages where your parcel is located. Packing — shipping — customs clearance — border crossing — sending to the plane. Such advanced logistics,» says Yulia, one of the heroines of this material.

She placed a new order for Temu last month. But for some reason it was not sent for a week. The girl contacted the support service, which answered her in a few seconds.

«It became interesting whether a bot or a live person was talking to me. The answers were in Ukrainian and written quite correctly, that is, it was not a Google translator. They explained to me that the problem was the lack of planes and offered a $3 discount coupon,» Yulia said.

The girl was asked to rate the service. «They want to be liked by customers and they don’t care. All complaints are accepted by the platform itself, not by the seller. I liked it. Ukrainians order a lot, there are many reviews from our people on the platform,» adds the heroine.

«Wheel of Fortune» is «divorce». I monitored sites where the product costs, say, UAH 500, but on Temu its price is higher even when a -70% discount is made.»

She says Temu always offers free shipping. However, there is a minimum price at which goods must be purchased, which is UAH 411.

«Some moments of shopping on Temu make me wary. My last delivery was not 10 days, but 21 days is the longest. But they gave me a $3 discount on my next order. By the way, the number of „buns“ is decreasing. In the first order, they were the largest,» said the heroine, who is annoyed by constant additional offers of goods that she simply rejects.

Temu itself does not see any problems with the «wheel of fortune». Here’s what they answered on this topic:

«Gamification on the platform is designed to make the shopping process more interesting and give consumers the opportunity to receive additional discounts and benefits. If the customer does not want to participate in games or promotions, he can easily opt out of this option.»

Temu wants to appeal to as large an audience as possible. Therefore, when materials criticizing the platform come out, the company pays attention to it. This is what happened to the Ukrainian YouTube channel «The Last Capitalist», which in October released the video «How dangerous is Temu? Discounts at the price of economy and freedom.» Shortly after receiving the following letter from a Chinese company:

In a comment to dev.ua, the authors of «The Last Capitalist» said that in the first letter to Temu, they expressed their concern about the reported information, emphasizing high standards and the like.

«We specified our questions, in particular regarding forced labor. We received a second letter with answers to these questions. There were not many specifics,» the bloggers say.

Did Temu throw strikes on criticism videos? The authors of the Ukrainian YouTube channel said that they did not receive any restrictions or warnings from YouTube.

However, if you take a closer look at the letters from Temu, it seems that they were written by an artificial intelligence.

«There are some similarities — general phrases, no specifics and theses that are repeated. We are not competent to qualify exactly whether it was a chatbot or an AI, but the similarities are noticeable. After those two letters, we didn’t receive any more,» say Ukrainian bloggers.

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