Games With Purchase

At least 20% of Americans have shopped on Temu, which proves to be a formidable opponent to other online shopping giants — and may find a kindred spirit in affiliate marketing.

Written by Brook Schaaf

Temu, the Chinese seller turned marketplace, has slowed its growth … though not before it landed about one in five Americans as customers. 

You are probably familiar with the model — extreme gamification to entice purchases of low-cost items sent directly from China, the cheap shipping made possible by the de minimis provision in the Global Postal Treaty (in this case, under $800).

Temu isn’t the first to follow this model. In a pattern vaguely reminiscent of Friendster and MySpace, Temu was preceded by LightInTheBox (a client from my agency days) and Wish. Or perhaps Craigslist, eBay, and Amazon is a better comparison. 

Recent guest on the Jason & Scott Show Michael Maloof, Head of Marketing for Earnest Analytics, said, “They’ve done a great job in the first year of attracting folks with a lot of disposable income to buy things that they likely wouldn’t have bought anywhere else, like party supplies, [and] household goods.”

In the craft and hobby category, Temu saw a 368% year-over-year increase in February compared to six competitors dropping 4% (Michaels) to 31% (Oriental Trading). The implication is clear: Temu is eating into competitors’ market shares. 

Maloof went on to say that a disproportionate number of high-income earners see these purchases as a sort of shopping lottery — i.e., they don’t mind if an item is a dud whereas a low-income household counts on something working. This is particularly true for “dupes” — cheap knock-off items that still do the trick. In fact, due to the preponderance of Chinese sellers on Amazon, the same exact dupe might be had for cheaper on the former than the latter. It’s surely no coincidence that Amazon announced a first-ever spring sale.

The Economist and WSJ have noticed the threat Temu poses. But that’s a threat to Amazon, not to affiliate. Temu has proven itself to be a disruptor that plays friendly in the affiliate space. Consider a posted 30% off offer. Assuming the postal treaty doesn’t change and customers get more accustomed to this model, more direct shippers could emerge, confident in their purchases when they work through curation and trust agents (read: affiliates).