Tech
How Temu Makes Money From $10 Smartwatches From China
Bargain e-commerce company Temu has had a whirlwind 2023.
Quietly launching its app in September 2022, it only took the company a few weeks to top app store charts, edging out Amazon, Walmart and even fast-fashion brand Shein. By February 2023, the 5-month-old company made its TV debut during Super Bowl LVII, airing two commercial spots totaling an estimated $14 million. With an annual advertising budget of about $1.4 billion, Temu is focused on aggregating a user base of nearly 100 million people by year-end.
Temu’s popularity is largely due to its ultra-cheap knockoffs. Users can get an Apple Watch dupe for $10, Yeezy knockoffs for $4.99 and gaming consoles for $20. On top of the steep discounts, users are bombarded by coupons, free shipping countdowns, flash sales and discount wheels.
While on its face the company looks to be a Boston-based startup, it is actually backed by a well-known name in the Chinese retail space, Pinduoduo.
“China is really the linchpin in Temu’s strategy,” said Neil Saunders, managing director of GlobalData Retail. “A lot of the products that are sold on Temu are manufactured in China. They’re shipped directly from China to the U.S. So those labor costs compared to manufacturing in the U.S. and elsewhere are really low.”
Temu’s rise in popularity has also courted scrutiny from the U.S. government, accusing the website of exploiting de minimis shipping rules to undercut U.S. retailers. Under de minimis rules, shipments valued under $800 are not subject to duty taxes and undergo minimal customs checks.
Beyond that, a U.S. House committee accused the retailer of violating U.S. import law by using forced labor to supply its products.
Temu and Pinduoduo did not respond to CNBC’s request for comment.
Watch the video above to learn what’s behind Temu’s success and what could disrupt the retailer’s massive growth in the U.S.
Chapters:
00:00 — Introduction
01:47 — What is Temu?
06:40 — Your package is on its way!
11:59 — Your order has been delivered
13:48 — What’s next?
Produced by: Devan Burris
Edited by: Kevin Heinz
Camera by: Brad Howard
Graphics by: Alex Wood
Supervising Producer: Jeff Morganteen
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How Temu Makes Money From $10 Smartwatches From China
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Produced and Edited by: Ryan Baker
Camera by: Jeniece Pettitt
Reporter: Michael Wayland
Animation by: Jason Reginato
Senior Managing Producer: Tala Hadavi
Additional Footage: Hyundai
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@HiddenMantis-jb1jo
January 4, 2024 at 4:08 pm
This documentary looks like an AD for the 10$ smart watch xD
@jonsmith7659
January 4, 2024 at 4:08 pm
Like all Chinese made goods, it’s cheap crap that falls apart and breaks. A lot of cheap rip offs of more expensive and better made goods. I wouldn’t buy anything from any of these websites. It’s all junk and you’ll be buying replacements in no time.
@amanlimbu6482
January 4, 2024 at 4:08 pm
Let me guess Temu is bad shady illegal the force of evil and you americans are the good ones saving us from them. Im guessing temu is chinese and it has nothing to do with them being a competition to american companies?
@csjames69
January 4, 2024 at 4:08 pm
All this cheap products that are not necessarily needed will probably end up broken and will end up in landfill. Not an environmentally friendly e-commerce site. Most of the stuff are essentially of poor quality.
@bobbrown8661
January 4, 2024 at 4:08 pm
Temu pikachu kekekeke ^_^
@LeonLee-sc2xl
January 4, 2024 at 4:08 pm
They sell way to much trash i mean they might charge u $3 for something that will break in 3 days so? 🤔🤔
@arfriedman4577
January 4, 2024 at 4:08 pm
I stopped buying stuff i domt need in 2012. I use what i have.
@RS-el2oy
January 4, 2024 at 4:08 pm
The same item on Amazon will cost you 30.00 but in Temu just 5.00 and almost the same quality. Big US companies will surely destroy Temu because it is hurting their business but consumers are looking for affordability and Temu are capable of providing it.
@CDGMR1
January 4, 2024 at 4:08 pm
This is what happens when companies want to save $$ and outsource it overseas. Now, the company’s overseas make the original for Apple and a fake one for them.
@CDGMR1
January 4, 2024 at 4:08 pm
Sounds like a spying operation.
@user-km5mw7xe2t
January 4, 2024 at 4:08 pm
slave drivers are crying foul that their cotton employees are trading in the field
@neli.rio1395
January 4, 2024 at 4:08 pm
it’s all crap products just like shien
@shermanstreet3783
January 4, 2024 at 4:08 pm
These products are from forced labor and sometimes when you order a product, it turns into a scam also cheap quality,
@Yourenotreal7
January 4, 2024 at 4:08 pm
God that voice 😖😫
@same1eka
January 4, 2024 at 4:08 pm
Takes money to make money.
@abendroid
January 4, 2024 at 4:08 pm
Xinjiang is an excuse to say ’Please buy from Amazon’
@bradleyniven7942
January 4, 2024 at 4:08 pm
Hey CNBC
Stop giving jobs to people with vocal fry. I stop listening within seconds
@xirtam77
January 4, 2024 at 4:08 pm
who cares democrats make them cheap! and we enjoy it
@Jiangster
January 4, 2024 at 4:08 pm
Does AliExpress do exactly the same thing? Their website looks almost identical
@laichuonkui69
January 4, 2024 at 4:08 pm
Hahaha, producing lots of jobs for local or else all this people will lost their jobs.
@laichuonkui69
January 4, 2024 at 4:08 pm
Ha ha ha ha, Urger Xingjiang again. All this being played again.
@zxttgg
January 4, 2024 at 4:08 pm
I'm a chinese, but I never buy from TIMU, because they are full of low quality products. Basically are all garbage.
@xpmick3640
January 4, 2024 at 4:08 pm
Backed😂 🎉❤ by amazon😮
@TheKeeKeeHouse
January 4, 2024 at 4:08 pm
Chile cheese! I'm shopping with Temu! We in America are getting ripped off and the man is mad that he can't make money off of a business adversary so they try to force us to where we can only buy from them. Buddy. I'm buying the best and cheapest.
@youdontKnowshhs
January 4, 2024 at 4:08 pm
Gotta spend money to make money… China is far far ahead of the rest of the world…
@JunaidHasan23
January 4, 2024 at 4:08 pm
US propaganda at its finest.
Even US companies like Apple and Google route their money via Ireland to stop paying taxes.
No one's complaining then.
@ganeshdore
January 4, 2024 at 4:08 pm
I bought $200 worth in 2023. I think my purchase from Temu will be around $60 in 2024.
Temu returns policy is excellent for now.