How is Temu Challenging the E-Commerce Giants with its Viral Marketing Strategy?

Nov 27, 2023

Almost everyone has heard of the new app making the round, Temu. It is a new online shopping app that offers a wide range of products at low prices, from clothing and accessories to home appliances and power tools. Launched in September 2022 in the US and February 2023 in Canada by PDD Holdings, a Chinese e-commerce giant, Temu has quickly risen to the top of the app store charts, surpassing Amazon, Walmart, and Shein. 

Let’s break down the secrets behind Temu’s marketing strategy.

Temu’s Audience

Temu’s primary target audience is the young and price-conscious generation of online shoppers looking for bargains and discounts. According to a report by Daxue Consulting, the majority of Temu’s followers (32.68%) are aged 25-34, followed by 18-24 (28.57%) and 35-44 (21.43%). Temu appeals to these consumers by offering personalized recommendations based on their preferences and browsing history and gamified features that allow them to earn credits, gifts, and better deals by playing in-app games or inviting their friends to join the app.

Referrals: A Win-Win Strategy for Users and Temu

Temu has implemented a referral program encouraging users to invite friends and contacts to join the app in exchange for credits and gifts. Users can share their referral links or codes on social media platforms like Facebook, Instagram, and TikTok. For example, users can join a “Fashion Lovers” team and get $20 in credits by inviting five friends who also love fashion within 24 hours. These referrals help users save money on their purchases, help Temu acquire new customers, and expand its network of sellers.

Games: A Fun Way to Earn Credits and Free Gifts

Temu has integrated various games into its app, allowing users to earn credits and gifts. Some games include Fishland, where users can raise a family of digital fish and exchange them for rewards; Lucky Spin, where users can spin a wheel and win prizes; and Scratch Card, where users can scratch a card and reveal their winnings. These games are designed to be simple, addictive, rewarding, and increase user engagement and retention. According to app intelligence firm Sensor Tower, Temu’s average daily sessions per user in the US increased by 23% from October 2022 to January 2023. Some other games in Canada include scratch cards, card games, and cash games. 

A strong presence on TikTok and YouTube

Temu has leveraged the power of social media platforms, especially TikTok and YouTube, to spread awareness and generate buzz about its products and offers. The hashtag #temu on TikTok has amassed over 1.3 billion views, while Temu’s official YouTube account videos have grossed over 215 million views since last August. Temu’s marketing strategy relies on creating viral content that showcases its products entertainingly and engagingly, such as unboxing videos, product reviews, challenges, and giveaways. Temu also collaborates with influencers and celebrities with large followings on these platforms. 

But why is Temu Addictive?

People are hooked to Temu because of four main reasons. 

  • Low cost: The 1st reason is the cost. A simple laptop cleaner costs around $19 + taxes on Amazon Canada, whereas on Temu, you can find the same item from the same vendor at a low cost, as low as $4, with no taxes. 
  • Low prices: Temu offers products at up to 90% off retail prices, thanks to its direct sourcing from Chinese factories and warehouses. Users can find bargains and discounts on various products, from clothing and accessories to home appliances and power tools. Users can also use coupons and credits to save money on purchases.
  • Gamified features: The games by Temu are designed to be simple, addictive, and rewarding, as well as to increase user engagement and retention. The games can be addictive because they rely on inviting users. The app shows if you invite one user, you will be near to claiming your gift. For example, in the fishing game, you have to feed six fish over six days to get your free prize, and it will be very easy to feed the first four fish. But you need 1000g of fish food for the last two fish, which is impossible if you don’t invite new users. And for this particular game, you need to invite at least 10-12 new users to win the game. In this way, Temu is gaining more app downloads and, in turn, more customers. 
  • Price Adjustments: Temu offers a price adjustment, which means that if, within 30 days of your purchase, there is a decrease in the price of the product, you are entitled to receive that price difference in credit. The price difference starts at $0.01. The catch here is you can only get them as credit, so you will spend that credit along with other purchases because the minimum order for shipping is $20. 
Temu vs Amazon product comparison - Digii Ninja
Laptop Cleaning Kit. The left hand side products were purchased from Amazon and the right hand side products were purchased from Temu.

Temu’s marketing strategy in Canada is based on low prices, free shipping, advertising spending, and promotional activities that appeal to its target audience of young and price-sensitive online shoppers. By using games and referrals as part of its marketing mix, Temu has created a fun and engaging shopping experience for its users and grew its network of users and sellers in Canada.

However, Temu faces challenges and risks, such as quality issues, customer complaints, regulatory scrutiny, and competition from other e-commerce platforms. Whether Temu can sustain its momentum and profitability in the long run, remains to be seen.