Temu's ad spend soars as it embarks on a marketing blitz
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[1] https://github.com/jonatron/randomstuff/blob/main/Screenshot... [2] https://en.wikipedia.org/wiki/Pinduoduo
>As of last month, Temu accounted for nearly 17% of market share in the United States within the discount stores categories, according to data analytics firm Earnest Analytics.
That said, for however fake or skewed Amazon's reviews are, AliExpress and Temu's reviews are another level of useless. Most of the pictures are simply of packaged items, and the reviews themselves are variations of "Just got it haven't used it yet 5 stars!". My hunch is that they ran promotions to get people to write reviews at some point and got a lot of terrible, useless reviews in exchange.
Too much of Amazon is just marked up imports sold by meaningless brands.
Companies like Temu keep happening because Amazon is not operating a cost efficient marketplace and they are vulnerable. Presumably Amazon would win because of reputation and the reliability of their return guarantees, but they’ve lost their trusted status by letting their review systems be corrupted and no longer have the high degree consumer trust that gave them such defensibility.
So, some significant marketplace extraction will happen here as their suppliers essentially move up the value chain and start to eat their market, which looks like company-after-company from supply side countries making an entrance into the Western markets selling the exact same or similar products for much lower prices… exactly what we are seeing.
This flattening out of the supply chain is a phenomenon that Amazon has not done a good job of protecting against.
The only other big defense besides reputation is shipping speed and the risk annd complexity of importing, and perhaps at some point Amazon will wake up and start to lobby against the subsidized shipping policies. But in the short term they benefit from it too much to do so.
IMO, Amazon ought to reconsider the third-party strategy. At the very least, if they want to keep my interest they need a toggle that I can flip which will hide every single product that isn't shipped-from-and-sold-by-Amazon.com.
The real question is: why don't people just use AliExpress?
I've since noticed Temu starting to tighten their purse strings a little, as the free shipping minimum is now $20 instead of $10. AliExpress has also responded to the competition and seem to be using stateside warehousing for popular items (or some other magic) to match Temu's ~10 day shipping times, so I've gone back to AliExpress for the most part. AliExpress has a wider swath of product too owing, I presume, to their many years of additional time in the marketplace.
You can sometimes find the EXACT same product for half price. People have been voting that they want cheap not good for awhile now.
Your first question is a legitimate question except that it contains the word "Chinese". Why buy from any sketchy British platform? Or sketchy Brazilian platform? Or sketchy Texan platform?
I'm not so much trying to defend Chinese companies. It just really irritates me that American companies get a pass. When I think about all the ways the Chinese government could weaponize TikTok against me or my children, it doesn't bother me as much as all the ways Facebook/Instagram/etc can and ALREADY DO weaponize my data against me.
I'm probably just extreme in this way though. When somebody asks me for a phone number of a common acquaintance, I decline. I will always get permission before I hand over that info. Any of these services could require a very short, clearly worded agreement that says they are allowed to sell any information they can guess about you; most of the masses will quickly agree to that and be annoyed that their screen time was interrupted.
That's not why.
But the stated reason is, "They are Chinese and controlled by the Chinese government."
Maybe I am naive to swallow this public reason, but I also think there are millions of other naive people and a good deal of them get trained by such campaigns to be xenophobes. So even if this is a fake excuse, it does real damage with the culture it builds.
Tiktok is directly used by Chinese military. Facebook/Google are indirectly pressured.
What kind of access and information do you believe they offer to the USA intelligence services? Why do you think it is ok for one government to have information about you, but not another?
How do you think the Chinese military can use this information against you or people you care about? How do you think the USA government can use this information against you and people you care about? How do you think your local school district or grocery store or your employer can use this information against you? What makes the Chinese military scarier than everybody else?
Occasionally you'll find a category that is so marked up compared to actual manufacturing costs that temu seems like a fantastic deal (eg mechanical keyboards).
pretty soon you run out of stuff you want to buy anyway.
If the main value proposition of retailers is importing goods they don't produce and marking them up to sell to Americans, that's a shaky business model, especially in the age of ecommerce.
https://www.reuters.com/business/retail-consumer/key-trade-l...
E.g. per [0]:
> As Amazon’s Vice President of Global Policy Paul Misener pointed out:
> “The cost to ship a one-pound package from South Carolina to New York City would run nearly $6; from Beijing to NYC: $3.66.”
> While sending that same one-pound package from New York City back to Beijing via USPS International Mail would cost in the ballpark of $50.
[0] https://www.forbes.com/sites/wadeshepard/2017/11/05/how-the-...
Ali has their own Cainiao. The big companies realized if they do the Amazon model and build their own logistics network for cross-Pacific sea/air freight, the long-term savings are huge.
Even within the US, Amazon already has planes, trains, and automobiles. Why pay USPS and be at the mercy of government bureaucracy when you own your own integrated logistics stack.
Source: 11 years in e-commerce.
They don't provide separate financials for it, or even its approximate size compared to other components of the group.
My bet is Aliexpress has slightly negative margins up to -5%, and makes up to maybe 10% of total revenue. In other words, it could operate like this forever, being subsidized by more profitable components. It could also be slightly profitable, I'm not sure.
So, a billionaire-level version of the bullshit social media scams.
And, okay, fine, I'm a conspiracy theorist for not providing any evidence. But nothing I've presumed is implausible, even if it's not true of Temu. So I suppose commenting about it, here, is just a way to express my concern over what we think could be done if someone was out there doing this.