If you spend much time online you’ve probably seen one of Temu’s colourful ads – punctuated by its catchy tagline: “shopping like a billionaire”.

Temu specialises in selling various everyday items, including clothing, toys and household goods, for extremely low prices. Shanghai-based company PDD Holdings launched the online marketplace late last year (initially in the United States) to cater to overseas customers.

Since then, Temu’s reach has skyrocketed. The total value of products sold went from US$3 million in September last year, to US$400 million in April. At the time of publishing this article, Temu was the most popular free iPhone app in the US, United Kingdom, Australia and Germany.

Why has Temu been such a massive success? It’s safe to say the platform has some winning strategies that keep consumers coming back. But beyond that, similar to other e-commerce platforms, using it isn’t entirely risk- or guilt-free. Here are some things to consider if you’re thinking of giving it a shot.

What are Temu’s secrets to success?

1. Value

Many Australians might associate “made in China” with cheap price tags and low quality. However, Temu’s consumers are beginning to view it as offering affordable products that do not necessarily compromise on quality. In some cases, 10-20 products will only set you back US$20-30.

Temu claims it can offer these prices as a result of cutting out the middlemen in the supply chain. While the manufacturers provide the product details and the products themselves, Temu handles everything else – from customs processing to international shipping. This streamlining helps reduce unit costs.

Nonetheless, achieving such value doesn’t come without a cost. Concerns are rising that Temu and its suppliers may be operating at a loss. However, it’s common…

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