Temu, which is owned by Chinese retail giant Pinduoduo Holdings, has so far operated using a “managed marketplace” model that includes having manufacturers consolidate their inventory into warehouses in China and then ship to consumers across borders from there. Temu manages product listings, pricing, and shipping logistics. The result has been longer shipping times — but also lower prices — than their e-commerce competitors.
But, its new model allows sellers with warehouses in the US to handle fulfillment and logistics themselves. Temu is highlighting product listings from those sellers with a small badge that says “local warehouse.” Their storefronts also have a badge that says “faster delivery.”
At least some sellers appear to be offering a different assortment in their US stores compared to their Chinese ones.
This Brightever store on Temu is shipping from a local warehouse and promises faster delivery.
Temu
Brightever offers a different, larger assortment of items on its primary storefront.
Temu
“In addition to shorter delivery times, the new arrangement helps Temu put bulkier, higher priced SKUs onto the platform and reduces its exposure to volatility in long-haul shipping costs,” Bernstein analysts wrote in a research note published earlier in March.
Business Insider previously reported that US Amazon sellers were largely eager to try selling on Temu once it was made available to them. Notably, the sellers that are on the new US marketplace so far seem to be Chinese sellers who have warehouses in the US, not American-grown brands, according to Marketplace Pulse. Many of them also sell on Amazon.
Offering faster shipping options could help Temu to better compete with US e-commerce incumbents like Amazon. Though Temu has had a rapid rise in the US, it has a long way to go to catch up in terms of overall sales volume.
It could also help Temu to lessen potential regulatory risks. The company’s use of de minimis shipments has gotten increased attention from US lawmakers as of late. De minimis is a provision of US customs law that allows importers to avoid paying duty and tax on shipments that are going to individual consumers and are worth less than $800 in total. These shipments also frequently avoid inspection by US Customs and Border Protection.
Two bills have been introduced in Congress to reform de minimis policy. On March 6, US Representatives Earl Blumenauer, Neal Dunn, and Dan Bishop announced the formation of a new coalition to further push for the rule to be changed or eliminated altogether.
In January, a spokesperson for Temu said that the company has not relied on de minimis to grow and that they would support reforms to the provision if they are fair.
Shein, another China-linked e-commerce marketplace, also began onboarding US merchants last year. Shein has been making appearances on the e-commerce conference circuit, hosting a booth at eTail West in Palm Springs in February and the Prosper Show in Las Vegas in March.
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