You must be aware that all the buzz right now is about the Chinese e-commerce platform Temu which came into limelight with its super bowl ad and it created so much impact that the site got millions of website hits within 24 hours and even got tons of app installs on Android as well as iOS. Apart from that, it is worth noting that Temu has received a lot of appreciation for being cheap and has attracted a lot of customers due to that reason. This also shows you that even US customers want cheaper products even if they are not as durable which throws the notion out of the window that people in the US don’t prefer cheap Chinese knockouts of their favourite brands.
Now, a new data has been revealed which suggests that Temu is actually drawing a majority of its audience from US Dollar Stores which is a concept that is widely accepted in the country. Basically, the idea is that the US Dollar Stores have majority of their items for a dollar or less so you go to the store with a few dollars and come out with as many items as you can. Also, it is worth mentioning that these stores usually have used items but Temu is dropshipping items from China which means that they are providing new products for nearly the same price.
As per the report, “Temu accounted for nearly 17% of market share in the United States within the discount stores categories, according to data analytics firm Earnest Analytics. That compares to 8% for the dollar chain Five Below (FIVE.O), 43% for Dollar General (DG.N) and 28% for Dollar Tree.” Earnest Analytics’ head of marketing said that “Its (Temu) low prices on household goods and consumer staples makes it more of a threat to brick-and-mortar discounters like the dollar stores than other online marketplaces”. Clearly, the data suggests that Temu is a threat to the US Dollar stores because of its pricing which is quite similar to them. However, we know that these dollar stores have a huge amount of nostalgia attached to them so they won’t be dying anytime soon.
