Value shopping app Temu is helping American families stretch their shopping dollars by sourcing exceptional value and quality merchandise. It is also helping to incubate the next generation of brands by providing a platform for tens of thousands of small businesses to showcase their wares and build direct connections with consumers.

LovelyWholesale is among the small businesses that have signed up to set up stores on the Temu marketplace. Just three weeks into the operation, the clothing wholesaler has garnered more than 200 store reviews and a 4.6-star rating in less than three weeks, with plans to increase the number of products it lists on the platform.

“For the past 11 years, we have built a strong garment production line and have advantages in garment fabric. We hope our affordable and practical clothes can benefit more customers through the Temu platform,” LovelyWholesale said in a statement.

New Brands

Small businesses have traditionally struggled to break into a retail market dominated by global brands. Many have had to rely instead on manufacturing for international brands. They amass manufacturing expertise and economies of scale but need help to capture more of the value of their product.

By giving these fledgling brands a platform and exposing them to millions of potential buyers, online marketplaces like Temu are helping to incubate the next generation of up-and-coming brands. This is especially significant as the mass retail market continues to fracture into millions of niches and interests, driven by Gen Z consumers focused on authenticity rather than conformity.

With more than 250 merchandise categories, Temu is a one-stop online shopping destination for most consumer needs. The wide selection of products, from fashion and beauty to home electronics and sporting goods, means shoppers can find what they need in one convenient platform. It also means that small businesses can build up their unique niches and yet tap into Temu’s massive online footfall to attract eyeballs to improve their discoverability by potential customers.

PDD Holdings

Temu is helped by being part of PDD Holdings, the Nasdaq-listed multinational commerce group that works with more than 11 million suppliers to serve 900 million consumers globally. It also benefits from the logistical expertise of the group’s handling of 61 billion orders in 2021 alone.

More than just being a place to sell, Temu is also working with its merchant partners to create brands and merchandise that fits the needs of consumers as part of its Next-Gen Manufacturing approach. By channeling feedback and insights into their preferences back to the producers, Temu’s supplier partners can use market intelligence to develop trendy products sought after by consumers.

This is especially valuable for those suppliers and manufacturers seeking to build their brands, as they often do not have direct insight into what consumers want. The hit products boost sales and make the platform more valuable for returning customers, creating a win-win for both shopper and seller.

Shein Model

Temu’s approach is diametrically opposite to ultra-fast fashion start-up Shein, which it has often been compared to. Whereas Temu hosts thousands of small businesses and micro-brands selling across more than 250 product categories, Shein has adopted the contract manufacturing model by getting hundreds of factories to produce clothes that it labels under its brand.

It remains to be seen whether Temu or Shein would be successful in their respective business models. At stake is a slice of the $265.9 billion US consumers spent on online retail in the third quarter. E-commerce accounted for 15% of the total $1.79 trillion retail spending in the three months that ended September, according to Commerce Department data, suggesting more room for growth in the future.