Cross-border E-commerce Is Highly Competitive. What Is Temu's Next Goal?
Cross-border e-commerce is highly competitive. What is Temu's next goal?
In the first half of 2025, China's cross-border e-commerce industry achieved remarkable results.
Customs data shows that the total volume of cross-border e-commerce imports and exports reached 1.32 trillion yuan, up 5.7% year-on-year. This figure highlights the strong development momentum of the industry. At the same time, the number of cross-border e-commerce-related enterprises is also on the rise, with the current number of existing enterprises exceeding 33,000, showing a significant year-on-year increase.
Among them, Temu has demonstrated an astonishing expansion speed, with its business scope rapidly covering 79 countries and regions around the world, and its influence growing day by day.
According to user data, Temu has a monthly visit volume of nearly 700 million, making it the second-largest e-commerce website globally, surpassing traditional e-commerce giants like eBay. In the first half of 2025 alone, Temu's sales reached approximately 20 billion US dollars, with its GMV in the second quarter amounting to about 12 billion US dollars, and the US market accounting for nearly 45%.
These impressive figures have made Temu an undeniable force in the industry.
Beneath the grand spectacle, hidden reefs have emerged.
However, although Temu seems to be enjoying a surge in popularity, its foundation is already showing signs of instability.
Firstly, Temu has encountered numerous challenges in the European and American markets. On the one hand, Temu is highly dependent on the US market. Financial report data shows that in the first half of 2025, Temu's total sales were approximately 20 billion US dollars, with the US market accounting for 45%, or about 9 billion US dollars, ranking first.
This "betting half of the territory on a single market" gamble has left Temu's global story highly exposed to risks. Sensor Tower data shows that after the United States officially ended the tax exemption for small packages under $800, Temu's daily active users in the United States dropped by 58% in the following week. To maintain low prices, Temu was forced to raise prices by 10-15%, which led to a 25% decline in the conversion rate of high-value items. As a result, the inventory turnover days for some best-selling 3C products have been extended to 90 days.
On the other hand, it has been difficult to attract merchants in the European market. According to the information disclosed by Temu at a recruitment event in the UK in July 2025, only 2,500 "original merchants" have gone online across Europe, falling short of the year-end target of 50,000 by 47,500. Although some Amazon merchants were recruited initially through a low-price strategy, the market response was weak.
Secondly, Temu's transition from a fully managed model to a semi-managed one has not been smooth sailing. Under the fully managed model, Temu had significant control over aspects such as product pricing and inventory management, which enabled it to better ensure product quality and delivery efficiency, but the fulfillment costs were high. To reduce costs, attract more merchants to join, and increase product diversity, Temu began to shift towards a semi-managed model.
This transformation, while helping to attract more merchants, has also increased management difficulty. The semi-fulfillment model grants merchants more autonomy, requiring them to handle some operational aspects on their own, which has led to a rise in the complexity of platform management. The transformation has also resulted in increased costs and a slowdown in revenue growth. A Citibank report stated that Temu's shift from a full-fulfillment model to a semi-fulfillment model directly led to a slowdown in transaction service revenue growth, with a year-on-year increase of only 0.7%, significantly dragging down overall revenue growth.
Thirdly, geopolitical factors have introduced uncertainties. Some countries and regions have imposed restrictions on Chinese cross-border e-commerce platforms for reasons such as protecting local industries and maintaining market order. For instance, in October 2024, the Temu app was restricted in Indonesia; in early 2025, market rumors suggested that Temu was required to suspend its operations in Vietnam. These restrictions not only hindered Temu's business expansion in these local markets but also caused certain damage to its brand image.
Temu seems to be making great progress, but in fact, it is stepping into new traps at every turn.
Powerful warlords rose up one after another, and every inch of land was fiercely contested.
When low prices are no longer a monopoly, Temu's high-growth story could be snatched away by rivals at any time.
On the one hand, the established giant Amazon has always been the most formidable barrier for Temu in its overseas expansion.
Amazon has a huge user base and a stable market share, occupying an important position in the global cross-border e-commerce market. In contrast, in the United States and Europe, Temu's user scale and traffic are both less than one-third of Amazon's, and it is still difficult for it to shake the leading position in the short term.
According to SimilarWeb data, Amazon ranks among the top in the e-commerce markets of many countries and regions around the world, covering 185 countries globally. Its market share in North America and Europe exceeds 40%. Although Temu has increased its global share from 7% to 21% in just two years, it still lags significantly behind Amazon.
In terms of brand influence, Amazon has established an extremely high level of recognition and trust in the minds of global consumers through years of meticulous efforts. Whether it's electronic products, fashion clothing or home goods, consumers can find their favorite items on Amazon and have full confidence in their quality and after-sales service.
In contrast, as an emerging platform, Temu still lags behind Amazon in terms of brand influence. Many consumers, when choosing a shopping platform, will give priority to established giants like Amazon, as the trust and quality assurance carried by its brand are hard to be surpassed in a short period of time.
In addition, Amazon has built a vast and efficient logistics network. Its FBA service offers sellers an efficient warehousing and delivery solution, enabling rapid delivery and even same-day or next-day delivery in some areas. However, Temu's logistics system is still under development. Currently, it lags behind Amazon in terms of delivery speed and coverage, which to some extent affects consumers' shopping experience.
On the other hand, apart from Amazon, AliExpress and SHEIN also stand in the way, forming Temu's "second-line fire network".
In terms of supply chain, AliExpress relies on Alibaba's strong resource integration capabilities, possessing a wide supplier network and a complete supply chain system. SHEIN, on the other hand, has been deeply involved in the fast fashion sector for many years, establishing an agile and flexible supply chain that enables efficient coordination from raw material procurement, processing to transportation, and can quickly respond to market trends.
Although Temu offers a relatively diverse range of products, it still lags behind AliExpress and SHEIN in terms of the depth and flexibility of its supply chain. For instance, in the fashion category, the update speed of Temu's product styles is relatively slow, making it difficult to meet the demands of consumers who are keen on following fashion trends.
In terms of brand positioning and target user groups, AliExpress is positioned as a global cross-border e-commerce platform, catering to consumers worldwide and offering a comprehensive range of goods and services. SHEIN, on the other hand, focuses on the fast fashion sector, primarily targeting young women who pursue fashion and taste. It enjoys a high reputation and market share in the field of fashionable women's clothing and related accessories.
Although Temu's target market is also quite broad, its brand image is less recognizable in specific fields compared to AliExpress and SHEIN. Temu's competitiveness in attracting specific user groups is somewhat lacking. For instance, for young consumers who pursue fashion, SHEIN's sense of fashion and personalized services are more appealing; while for consumers who need one-stop shopping, AliExpress's product diversity and comprehensive service capabilities better meet their demands.
In addition, AliExpress and SHEIN have accumulated a large number of loyal users through years of operation. Although Temu has a relatively fast user growth rate, as the platform is still in its development stage, it still has a long way to go in terms of user retention and loyalty cultivation.
Amazon has the user's mind, AliExpress has the deep supply chain, SHEIN has the speed of following trends, and Temu's growth myth could be cut off at any time by any of these strengths.
The Winning Move
In the face of current predicaments, Temu must take multiple approaches simultaneously and break down the problems into actionable items that can be implemented.
Firstly, Temu needs to further enhance the user experience. By conducting in-depth analysis of consumers' shopping habits and preferences through big data, it can precisely recommend products, enabling consumers to quickly find the items they like. At the same time, it should strengthen logistics and distribution management, increase the speed and accuracy of delivery, and reduce the rate of product damage and loss. Additionally, a more rigorous quality inspection system can be established to strictly review the products of merchants on the platform, ensuring that the quality of goods meets the standards.
Secondly, Temu can explore more diversified business models. Besides the current fully-managed and semi-managed models, it can consider launching customized services, providing customized products based on consumers' individualized demands. Strengthen cooperation with brand owners, introduce more well-known brands, and enhance the platform's brand image and product added value. For instance, it can carry out cross-border e-commerce live-streaming business, increasing consumers' purchasing desire through real-time display and interaction by live-streamers.
Thirdly, in the face of external challenges such as geopolitics and regulatory policies, Temu should enhance communication and cooperation with governments and regulatory authorities in various countries, actively understand and comply with local policies and regulations to ensure the compliance of platform operations. For instance, it can establish a risk early warning mechanism, keep a close eye on international political situations and policy trends, and formulate response strategies in advance. Temu can also reduce operational obstacles caused by cultural differences and political factors by strengthening localized operations.
Despite facing numerous challenges, Temu also has many opportunities and promising prospects for development. With the continuous growth of the global cross-border e-commerce market, Temu, as an important player in the industry, is expected to gain a share in this vast market. If Temu can successfully address the current challenges, optimize platform operations, innovate business models, and actively respond to external pressures, it will have the potential to achieve further breakthroughs and development.
