As soon as you enter Temu you are assaulted by a barrage of stimuli. A banner center reminds you of the proximity of the Black Friday and sets a starting price: there will be products “from 0.39 euros”. A countdown appears at the top with the promise of free shipping on orders you place before it ends. Below, the platform displays another countdown, in this case time is of the essence if you want to get one of its lightning offers.
Temu is among the new e-commerce platforms from China, as are Shein or Miravia. They all maintain a common style based on the flood of promotions of all kinds. With this they have planted social networks with advertisements and have placed themselves in the mouths of influencers in a very short time. Its landing in the United States and Europe threatens Amazon’s overwhelming dominance in the e-commerce battle.
Shein, known for selling clothing at low prices, has achieved dizzying success among the young public, who flock when one of its ephemeral stores opens. Furthermore, in 2022 it was the third most popular fashion brand among Spanish consumers, only behind Zara and Primark, according to the Fintonic Intent HQ Barometerprepared by the IESE Business School and the Fintonic expense control app.
The platform has gained this popularity through discounts and promotions. The same as Temu, who landed in Spain in April 2023 and in July was already the most downloaded application at the national level. Only in August achieved one million downloads, while second on the list was TikTok, far behind, with 600,000. The third and fourth positions were occupied by Shein and Miravia respectively.
The growth of these platforms is very viral, according to Jordi Ordóñez, a consultant specializing in e-commerce: “The strongest penetration they make is through viral content on social networks. From there they take you to the applications, which always have a super big discount in exchange for registering. And then they bombard you with notifications and discounts,” he highlights.
These applications base their strategy on a stream of incentives to buy. They launch offers with expiration dates and distribute discount codes, which are disseminated through social networks, including WhatsApp and Telegram groups. The Shein interface, for example, welcomes you with “a 25% discount and a gift”, added with a countdown. A simple search on Temu shows discounts of 40%, 45% and up to 85%. At Miravia you find a 20% welcome coupon. Added to this are their Flash offersa showcase of products reduced to 54%, 27% or 74%.
“It’s all about generating a feeling of anxiety about consuming and seeking immediacy,” says Ordóñez. “There is a sale flashwhich are ephemeral promotions of 24 or 48 hours, or a countdown, so that you feel that pressure that you have to enter now and buy now because if not you will lose the discount.
They are tactics that awaken urgency in consumers. “It’s about rushing them to get that advantage that they can’t miss,” says Núria Cónsola, psychologist specializing in addictions and director of Center Benavet, in Tarragona. “Many times they are impulsive purchases, because nothing is needed, but we want to take advantage of the discount because it seems to us that we have made the purchase of the century.”
A bite of the Amazon pie
Due to this model, business costs are high. But behind these platforms there is financial muscle. Temu belongs to the Chinese e-commerce giant Pinduoduo, which has a capitalization of more than $100 billion. Miravia is a brand of Alibaba, also owner of AliExpress and whose capitalization exceeds 200 billion. Shein, meanwhile, has raised more than 4.1 billion in financing rounds and would have an unofficial valuation of 64,000 million.
“There are tremendous investments behind it to capture market share. In the end it is about adding fuel to attract many users, getting many sellers on the platform and making orders increase,” explains Ordóñez, who sees a clear economic sense in this strategy: “If you get into a market like the United States and you steal 1% from Amazon, this is millions and millions.”
And Amazon has already begun to notice the bite in some regions. In the United States, between December 2022 and March 2023, its unique visitors fell by 17 million, to 211 million, according to the analysis portal Statista. In the same time frame, Temu went from having 44.5 million unique visitors to 70.5 million, while Shein gained 6 million visitors to reach 41 million. In the United Kingdom, Amazon lost 1 million mobile users in the first six months of the year, leaving it with 8.3 million, according to the consulting firm Global Wireless Solutions. For its part, Shein doubled its mobile users, up to 2 million. And, after arriving in April, Temu reached 3.5 million users on its app in just one month.
Growth based on aggressive offers
These online markets support their rapid rise in their promotions. However, Cónsola states that these types of sales strategies favor impulsive and compulsive purchases among users. The first consists of buying something without reflection and the second, in repetitive consumption. “What produces pleasure, when a purchase is impulsive or compulsive, is the fact of having won the prize, which is the great discount. What you buy is the least important,” says the psychologist. “The brain generates a secretion of dopamine, which is the neurotransmitter of pleasure, and we feel happy. But this happiness lasts very little,” she adds, clarifying that the peak of well-being occurs at the moment of purchasing, not when receiving the package.
These tactics come from the Chinese market, according to Ordóñez, where consumers want everything immediately and buy a lot from their mobile phones. “They are trying to export this formula and it is going very well,” he emphasizes, although he is cautious about its future due to the high costs of the business model.
A model whose tactics Cónsola describes as “dangerous.” Because? “It’s very similar to how gambling works. It’s heavily made up, but in the end, the background is the same as in the game: win something. And when we want to win, depending on the type of personality and the control that a person has over themselves, we are going to try again and again,” he highlights.
Some sales tricks do not even hide this affinity. In Shein there is a games icon as soon as you enter. When you press, a panel with prizes appears, as seen in a video that spreads a recent campaign, and you can use virtual coins to tap a button and find out, after an exhilarating beep, which discount coupon you get. All with a casino aroma and with a suggestive conclusion message: ‘Play again’.
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