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Originally Posted On: https://phillystylemag.com/temu-is-fast-growing-but-it-is-not-fast-fashion-heres-why
What is Temu and Is It a Fast Fashion Company
As one of the fastest-growing e-commerce companies in recent years, Boston-based Temu has earned numerous accolades, including being referred to as “mind-bending,” “the real deal,” and “extremely aggressive.” However, what sets Temu apart from other companies, particularly fast-fashion companies like Shein, is its unique business model.
Thus, in this article, we’ll delve into Temu’s Next-Gen Manufacturing model and how it enables the company to offer competitive prices while minimizing waste. Additionally, we’ll explore the differences between Temu and Shein’s business models and why Temu’s approach sets it apart as a promising contender in the online marketplace industry.
Temu’s marketplace and Next-Gen Manufacturing
Temu is an online marketplace, providing a wide range of products from various independent sellers. The platform offers over 25 major categories of merchandise, including electronics and kitchenware, among others. Temu is not limited to fashion items, as it provides an extensive selection of products, as described by Fast Company, creating a “riot of choice.”
According to Bloomberg:
“Temu operates more like a marketplace than a self-run brand such as Shein. It doesn’t handle design and production, instead recruiting suppliers to offer a list of products, which Temu selects from and then allows a store to open on its platform.”
Temu’s Next-Gen Manufacturing model enables the company to offer competitive pricing by efficiently matching supply and demand. The model leverages timely insights into consumer preferences to enable manufacturers to be more targeted in production, leading to cost savings that are passed onto consumers. The result is a win-win situation: reduced waste translates into lower prices and generates more sales, while consumers receive more customized products at affordable prices.
Temu and Shein are clearly not identical
“The Temu and Shein business models are clearly not identical,” said Deborah Weinswig, Coresight’s founder and CEO. Temu’s model “enables companies to quickly respond to and capitalize on rapidly changing trends in the market. As this model cuts out any middlemen, it greatly reduces prices for consumers,” she added. Temu leverages its Next-Gen Manufacturing model to provide fast and affordable services.
Temu’s combination of ultra-low prices and flash sales has proven attractive at at time consumers are becoming more careful with their spending, according to Abe Yousef, a sniper analyst at Sensor Tower, which tracks mobile apps. Temu’s mobile app has been downloaded 24 million times since inception and it’s gathered about 11 million monthly active users as of January, Yousef estimates.
“Given the current challenging macroeconomic environment and the backing of parent PDD Holdings, Temu is well-positioned to continue its aggressive growth strategy among US consumers,” he said.