Temu Surpasses Quarterly GMV of $5 Billion, Potentially Exceeding Annual Targets

In just one year since its launch, Temu, the cross-border e-commerce platform under Pinduoduo, has been growing at an astonishing pace.

Exclusive information obtained by Chinese tech media 36Kr reveals that Temu’s sales in the third quarter of this year exceeded $5 billion. Particularly noteworthy is September, during which, on the occasion of its first anniversary, Temu achieved a daily Gross Merchandise Volume (GMV) of up to $80 million.

Earlier, it was also reported that Temu’s GMV in the first half of the year was almost $3 billion – this means that the sales in September alone were nearly on par with the entire first half of the year. At this rate, with the arrival of “Black Friday” and Christmas, Temu may well exceed its annual GMV target of $15 billion.

Among these achievements, the United States, as the market where Temu first entered, contributed the majority, accounting for 60% of the sales. In terms of user retention rates, in July 2023, Temu’s 7-day and 30-day retention rates reached 18.5% and 13.5%, surpassing eBay, SHEIN, and Wish, gradually approaching the level of Amazon.

Building upon steady growth in the US market, Temu is also accelerating its global expansion. It has already entered 47 countries, with 10 new countries added to the list in September alone, setting a record for the highest number of countries entered in a single month. Alongside this expansion, Temu’s advertising efforts in Q3 have been remarkably aggressive. An entrepreneur cited by 36Kr described Temu’s advertising as leaving no room for competition, with daily advertising expenses on Facebook and Google reaching tens of millions of dollars since July this year.

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Over the past six months, Temu has dedicated its main efforts to addressing weaknesses and reinforcing the strengths.

In March, promotional campaigns such as the “Super Bowl” brought a surge in traffic to Temu. However, during the same period, Temu also faced a significant warehousing issue, resulting in sellers being unable to fulfill orders. As a result, the platform had to issue a notice to sellers regarding “warehouse upgrades” and temporarily suspend receiving new inventory. The warehousing problem caused a temporary decline in GMV.

This “warehousing incident”, which lasted for about two weeks, prompted Temu to accelerate its overseas warehousing plans, which are currently in progress. Insiders have revealed that there will be a rough implementation plan by the end of the year, with gradual utilization expected to begin next year.

The current product circulation path of Temu is that, the merchants send goods to domestic warehouses operated by Temu in China, and then they are shipped overseas from these domestic warehouses. It is understood that currently, Temu has more than 30 warehouses in China, distributed in Guangdong, Zhaoqing, Qingyuan, Dongguan, Foshan and other places. Compared with the beginning of the year, there has been a significant expansion and it continues to increase.

Even so, due to the rapid growth of the platform, merchants still have to sit in front of their computers, competing for warehouse slots. Some merchants have expressed that although the warehouses are expanding, the number of merchants is also growing rapidly. As of the end of September, Temu’s SKU count has increased from over 200,000 at the beginning of the year to nearly 1 million, and continues to rise.

To alleviate concerns about warehouse capacity, Temu has been continuously increasing manpower through recruitment and internal transfers. A merchant in Dongguan City revealed that he has witnessed Temu’s recruitment scenes multiple times, with busloads of people heading towards the warehouses, totaling nearly a thousand individuals in a single day.

As a company known for its efficiency, Temu is also actively recruiting a large number of IT talents, such as data storage teams, to enhance its ability to accurately capture user demands and improve operational strategies.

As for the profitibility issue, Temu has apparently not put it on its agenda yet. According to an anonymous source cited by 36Kr, at the moment, there is no expected target for profitability inside the company. The current core pursuit is the growth rate of GMV and market size.

Recently, Pinduoduo‘s budget for Temu has also increased from 20 billion at the beginning of the year to 23 billion, in response to the expansion needs of new markets.