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Originally Posted On: https://www.entrepreneur.com/business-news/what-is-temu-and-is-it-legit/441848
As inflation leads to skyrocketing prices on household goods, there might never be a better time to launch a discount marketplace.
Temu, an online shopping platform, is gaining popularity among Americans looking for discounts on everyday goods. Since it launched in September, the app has hit 10.8 million installations in the U.S., according to data from analytics firm Sensor Tower.
With everyday costs reaching new highs, Temu has caught the attention of those aiming to save — often with bigger markdowns than online retail giant Amazon.
Kathy Benetti, 68, told The Wall Street Journal that when she originally downloaded the app she didn’t expect to order as much as she did. However, she spent $90 on 14 items and was impressed by how much cheaper the prices were than Amazon.
“I think that’s the place I will be shopping from now on because it’s got everything,” Benetti told WSJ. She said that she’s even considering canceling her Prime membership if she likes the items from her last order.
Still, there’s one thing Temu lacks that is a cornerstone of Amazon’s business: speed.
According to the site, orders take anywhere from 7-15 business days to arrive, significantly longer than Amazon’s average of about 3-5 business days — not counting Prime perks like two-day and sometimes same-day delivery.
Related: Amazon Reveals New Drone Meant For Faster City Deliveries
However, it seems that some shoppers have begun to care less about delivery time and more about a bargain.
Yongchun Xin, 50, told WSJ that he first heard of Temu from a friend who shared a link to one of Temu’s best-selling products: Lenovo Group Ltd. wireless earbuds, which go for $8.47 on the site. On Amazon, the earbuds sell between $19.99 and $29.99 depending on the style.
“Amazon is faster, but I don’t care about getting stuff in two days,” Xin told the outlet.
A Coach-style backpack is $5.39; a stainless steel spatula is $1.18; an eyeshadow stick is $2.49; loafers are $10 — the prices are jarringly low, often demanding a double-take when first scrolling through the site.
Temu can offer its unbeatable low prices by accessing its parent company Pinduoduo’s supply chains and extending the savings to the customers, a spokesperson told WSJ.
Related: ‘It’s Kind of Scary’: How Inflation Will Impact Gifting This Holiday Season
For other companies, those low prices have proved to come at a cost. Earlier this month, Shein, a low-priced Chinese fast fashion site, was exposed for violating labor laws at two of its factories, prompting the company to invest $15 million to undo the damage.
To this point, there have been no signs Temu is offering low prices at the expense of its workers — so only time will tell if the budget marketplace is too good to be true
