Cube Asia Highlights New Trends in E-commerce
As the influence of Chinese e-commerce titan Temu begins to unfold in Thailand and the broader regional market, sellers must brace themselves for potential price wars, according to market analytics firm Cube Asia. The firm suggests that if Temu successfully maintains attractive incentives and a low-price strategy, it could significantly alter the landscape of regional e-commerce, similar to the shifts seen with platforms like Shopee and Lazada as they prioritize profitability.
Temu, a cross-border e-commerce platform from China, made its entry into Thailand in mid-July after establishing operations in the Philippines and Malaysia last year. The platform has gained impressive traction in Western markets, particularly in the US, where it has become the most downloaded shopping app, surpassing even Amazon in popularity. Over the span of just 24 months, Temu has expanded its reach to 70 markets worldwide.
By bridging manufacturers and wholesalers—primarily located in China—with international customers, Temu offers lower prices to consumers. However, a significant portion of products found on established platforms like Shopee and Lazada is sourced from official stores managed by brands or authorized sellers, unlike Temu’s model, which largely showcases unbranded items.
Though Temu implements a verification process for authorized sellers and direct shipments from brand manufacturers, a recent study showed that only 12% of its product offering falls within this verified category. While brand availability is primarily confined to electronics and gadgets, Cube Asia’s initial analysis of price competitiveness indicated that three out of five items on Temu were priced higher than those on Shopee, Lazada, or TikTok Shop. The platform’s high discount rates often result from inflated list prices, which make discounts appear more enticing.
Additionally, Temu has rolled out various subsidies like substantial first-order incentives, discount vouchers, and free shipping to entice customers. However, its unbranded selection is not immune to fierce price competition from rivals.
In an effort to compare prices across platforms, Cube Asia conducted an analysis focused on identical products, examining five items based on their cheapest listings. It found that Temu was the lowest-priced option for only two out of the five products tested. In some instances, competing platforms also offered direct shipping from China, indicating that Temu’s cost benefits in connecting buyers with manufacturers may not provide a unique advantage.
The firm’s co-founder noted that Temu’s success can be largely attributed to its cross-border operational model, which is also seen among platforms like AliExpress, Amazon, and Shein, as well as regional competitors such as Shopee and Lazada. Despite its claims of economies of scale, Temu’s strategy may lack sufficient differentiation from existing offerings, complicating efforts to shift consumer allegiance. Southeast Asian consumers are already familiar with low-priced Chinese products, making it challenging for Temu to entice them solely through pricing.
To gain traction in this competitive arena, Temu is reportedly amplifying its efforts by offering added discount coupons and exclusive deals, creating significant excitement among consumers and industry players alike.
