Over the past month I’ve been monitoring Temu and it looks like they are starting to struggle with shipping. Not that deliveries are arriving late, but they’re upping their shipping limits and offering alternatives to air freight.
The first thing I noticed a couple of months ago was their delivery guarantee – When Temu first launched, they offered a £5 credit if a delivery arrived as little as one day late. This has now been reduced by 20% to £4.
Then the minimum shipping limits for orders was raised 50% from £10 to £15. This makes a lot of sense as it increases average order size massively. It was nice when you could get a tenner’s worth of product shipped, but in reality this means Temu wants to sell higher ASP products or for you to simply buy a higher quantity if you want low value goods.
But perhaps the most interesting change is that Temu are now offering a discount to ship by land instead of air. By air you might expect delivery within 4 to 9 business days, although increasingly of late delivery is towards the end of the delivery window. However, if you are willing to wait 14 to 25 business days (basically a month) then they’ve started to offer a discount – on a £15 plus order it’s £2, Spend over £100 and you’ll get almost £6 knocked off for delivery by land.
It’s no secret that Temu (and Shein) are filling hundreds of planes a week shipping ecom packages from China to the West. There are so many sales coming from China that it’s disrupted air freight around the world and perhaps the worst is the deadhead (empty) planes flying back to China for their next pick up as it’s all one way traffic – no one has enough goods to fill the planes on their return journey.
The question is, will consumers who are happy to wait maybe a week for their order be happy to wait up to month for a further discount? Or will Temu be forced to rely more heavily on local delivery from UK, EU, and US retailers as they start to add in-country retailer who will deliver from their own warehouses?
Whichever way you cut it, this is a nice problem for Temu to have and shows that their massive investments are starting to pay dividends with sales moving in the right direction. Here at ChannelX, we’re viewing Temu in the same light as eBay and Amazon 20 years ago. Brands and retailers might be looking at Temu thinking ‘No way in hell we’re selling on there’, but that’s the attitude they had to the two big marketplaces back in the day…. And yet just about every high street retailer and brand sells on marketplaces today. It’s not a case of ‘if’ brands will start selling on Temu, it’s just a case of ‘when’.
