E-retailer Temu has sued Chinese rival and fast fashion powerhouse Shein in the U.S., accusing it of violating antitrust law in its dealings with clothing manufacturers. Temu alleges Shein used threats and intimidation to block manufacturers from working with the fast-growing app.  

But what is Temu, and why would such a big name as Shein be worried by it?

Temu is an online shopping app that has enjoyed a rapid rise since launching less than a year ago. The online marketplace, which is owned by Chinese-based PDD holdings, has been called the TikTok of e-commerce.

Temu was launched in the U.S. in September 2022. Its headquarters are in Boston and it arrived in Europe earlier this year. Its tagline is 'shop like a billionaire' but prices are certainly not aimed at the world's wealthiest people. Temu focuses on selling low-cost and discounted products direct from manufacturers in China.

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The app has been downloaded more than 50 million times in the U.S. and it is one of the most popular apps in the UK. It's the top downloaded app on the Apple free Apps chart, ahead of the likes of Threads, Google and Instagram.  

In its first four months it raked in $192 million in sales; that's similar figure to coffee chain Cafe Nero's sales in the first half of 2022. But it might not stop there: Temu wants to achieve $3 billion in sales by the end of 2023, a figure similar to luxury fashion house Saint Laurent's 2022 results.

Temu has even bigger ambitions for the next four years: it's aiming to reach $30 billion in sales. Chinese overseas fashion retailer Shein – which is the world's third most valuable private company – took 14 years to achieve that. 

It has a very long way to go to catch Amazon, which was founded in 1995 by Jeff Bezos and is the world's largest e-commerce platform with annual revenue expected to hit almost $750 billion this year.  

Experts say Temu's aggressive online marketing is driving its success. There are constant deals and discounts on the app and website, and social media influencers promote coupon codes to give users additional discounts. 

Free items are sometimes included with purchases and some items are significantly cheaper than similar products stocked by rivals like Amazon. For example, a rose gold number balloon for birthdays or anniversaries tends to retail for around $5.20 on Amazon UK – on Temu a similar product is priced at just under a dollar.

One thing that customers have complained about when using Temu is the long wait for items. Delivery is free but it takes between six and 20 days to get items to the UK. In comparison, standard free delivery with Amazon takes between three and five days. 

Some reviewers on TikTok have also raised concerns about the quality of items, although several do say that they accept that their buys might not last because of the low cost. 

But whatever the quibbles, Temu's relentless rise looks set to continue – and to change the way we shop.

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Cover image: CFP