Apr 11, 2023
Chinese company Pinduoduo's new app, Temu, tops app download rankings in the US
Apr 11, 2023
Laurie Silva, like millions of American consumers, has found a bargain hunter's paradise on Temu, where she can buy earrings for $1.25 and jackets for $15. Although there are millions of e-commerce apps that offer these types of deals, Temu, launched in the US by Chinese group Pinduoduo, became one of the most downloaded apps earlier this year amid geopolitical tensions surrounding another Chinese platform, TikTok.
Temu is a prime example of a trend that sees Chinese apps dominating the US market. Sensor Tower reports that four out of the five most downloaded apps in the country are of Chinese origin. Shein, for instance, specialises in fashion items, while Temu is a competitor to Amazon, providing beauty products, electronics, and even home goods.
Shein has proven to be a hit among the younger generation, but Temu has won over consumers of all ages, like Laurie Silva, a 65-year-old Californian who has already placed about 20 orders. "I saw many things on their app that were also on Amazon or other digital platforms, but at a much higher price," she explained to AFP.
Stephanie Wolfe, 38, decided to give the app a try in January and purchased an eyeliner and some jewelry. "I received my order surprisingly quickly. I saw that the service was good, so I placed another order." A Temu advertisement that aired during the Super Bowl in February reinforced her conviction: "I thought 'hey, that's what I use', and I've seen how popular it's become since then." And not without reason: downloads in the US soared on the day of the Super Bowl, according to Sensor Tower.
Ties with China
While American fashion companies are looking to produce less and less in China, concerned about the growing tensions between the two countries, Shein and Temu see it as an opportunity, said Sheng Lu, a professor of fashion and apparel studies at the University of Delaware. Both apps source their products from China, and Temu even ships directly from China, unlike Amazon, which relies on its regional distribution centres in the US.
This strategy allows Temu to take advantage of China's ability to produce a wide variety of garments in small quantities and at low cost, while also leveraging certain US provisions, such as the absence of import taxes on low-value products.
According to Sheng Lu, Shein also leverages the power of artificial intelligence and data mining "to better understand consumer habits and lifestyles and adapt to demand."
However, this surge of Chinese apps comes with increased scrutiny, which Temu is likely to face as well. In 2021, the NGO Public Eye revealed that some workers fulfilling orders for Shein were working between 11 and 13 hours per day, and that the company was also involved in the increasingly criticized wastefulness in the fashion industry.
"Moreover, just like with TikTok, the rapid growth of Shein and Temu has led to the collection of a significant amount of personal data from Americans," said Sheng Lu.
TikTok has been accused of being a threat to national security and mental health, and is currently trying to avoid a total ban on US soil. However, according to Milton Mueller, a professor at the Georgia Institute of Technology, "focusing on the nationality of a company is a crude criterion" when it comes to security risks.
A study co-authored by Mueller, which was published in January, argues that "the data collected by TikTok posed a security risk only if it came from people whose jobs were related to national security and their use of the app exposed sensitive data", a risk "that could exist on any social network."
The study argues that given the vast amount of data available on social media, China doesn't require any special authority over ByteDance, TikTok's parent company, to retrieve this data. Meanwhile, many American consumers prefer to ignore the potential security risks associated with using these apps. "I take precautions, I'm not worried," said Stephanie Wolfe, who uses PayPal for payments and a VPN to connect.
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