Temu's business in the UK is growing rapidly and has a promising future

Recently, major British media have focused on the strong growth trend of Temu, a cross-border e-commerce platform under Pinduoduo. The latest financial data shows that its UK business achieved a leapfrog development in 2024: the annual revenue reached 63.3 million US dollars, a 98% increase compared to 32 million US dollars in 2023, almost doubling. The pre-tax profit also rose from 2 million US dollars to 3.9 million US dollars, an increase of 95%, demonstrating outstanding profitability. This achievement is attributed to Temu's precise positioning of the "ultimate cost-effectiveness" strategy, through an innovative model that directly connects the Chinese supply chain with the British consumer market, successfully capturing a large number of price-sensitive users, and promoting a simultaneous leapfrog increase in revenue and profit. However, Temu and other cross-border e-commerce companies such as SHEIN and Amazon may face challenges in the future due to changes in UK tax policies.

The rapid development of Temu's business in the UK has brought complex and multi-faceted impacts in various fields, especially in the commercial and trade sectors. First, it has an impact on consumers. Temu has 9 million monthly active users, with over 19 million downloads, a brand recognition rate of 71%, and 43% of online shoppers have used the platform. Data shows that over 80% of British users consider Temu "worth the price", saving about 25% of their shopping expenses. Temu adopts a "super affordable" positioning and simplifies the supply chain (directly connecting with manufacturers and eliminating middle links), compressing costs to the lowest industry level. To address the EU product compliance investigation, Temu joined the international anti-counterfeiting organization, cooperated with the Korean FITI testing institute to strengthen quality inspection, and implemented a "full custody after-sales rule" to protect consumers' rights and interests.

Second, it has an impact on the e-commerce sector. Temu rose rapidly in the UK market with the "low price + efficient" model, and its price advantage directly challenged the market share of traditional e-commerce giants such as Amazon and eBay. Temu quickly occupied the market with low-priced products such as data cables at 0.8 US dollars and Bluetooth headphones at 4.57 US dollars, directly compressing the profit margins of traditional retailers and small sellers. British local retailers were forced to respond to competition by reducing prices, optimizing supply chains, or transitioning to online sales. Some small wholesalers even withdrew from the market due to price disadvantages. Data shows that Temu has become the fifth most popular e-commerce platform in the UK, with monthly active users growing by 53% and approaching that of Amazon. To cope with competition, Amazon was forced to develop a low-price product section, imitating Temu's pricing strategy, reflecting the passive adaptation of traditional platforms to the emerging model. This change in the competitive landscape forces all e-commerce platforms to re-examine their pricing strategies: on the one hand, consumers have more low-price options, and the overall price sensitivity of the market has increased; on the other hand, platforms need to find a balance between low prices and profits, for example, by optimizing logistics costs and reducing middle links to maintain competitiveness.

Third, it has an impact on the supply chain and logistics. Temu plans to achieve 50% of orders being fulfilled by local merchants in the UK by the end of 2025. By recruiting local sellers and expanding the scale of suppliers, delivery time will be shortened to 1-2 days. This strategy not only improves user experience but also forces Chinese cross-border sellers to optimize logistics channels, such as establishing overseas warehouses in the UK or cooperating with local logistics service providers. Temu's expansion promotes the transformation of the global supply chain to "regionalization + digitalization". For example, its "Swiss local store" model allows merchants to directly enter and be shipped by local delivery, and plans to expand to other European markets. This model reduces cross-border logistics links and lowers transportation costs and tariff risks.

In conclusion, the explosive growth of Temu in the British market, from price wars to ecological wars, has introduced a new variable of "low price and high efficiency" into global trade, further driving business to evolve in a more open and agile direction, and injecting new momentum into the diversified development of the business ecosystem.