Temu is an e-commerce platform founded in 2022 by PDD Holdings in Boston, USA, and provides services worldwide. Temu, which has achieved great success in the global market in a short time, quickly managed to attract the attention of consumers with its affordable prices and wide product range. However, as you can imagine, this growth has also brought serious problems in terms of environmental sustainability. In this article, we will take a detailed look at Temu’s business model, rapid growth strategy and environmental impacts.
Temu’s Business Model
The business model adopted by the company is based on a direct producer-consumer relationship, unlike traditional retail strategies. This approach both provides cost advantage and appeals to more customer profiles by increasing product variety.
- Direct Supply Model: Eliminating Intermediaries
Temu works directly with manufacturers, eliminating intermediaries such as wholesalers, distributors and importers in the classic supply chain. Thanks to this model, product prices drop significantly and a faster connection is established between the manufacturer and the consumer. This strategic structure provides Temu with a serious competitive advantage, especially in markets with high price sensitivity.
In addition, working directly with manufacturers allows Temu to be more flexible in processes such as product development and inventory management. With made-to-order production and flexible inventory structure, a highly dynamic system has been built that is shaped according to user demand. This means both low inventory cost and high mobility in product variety.
- Highly Competitive Pricing Strategy
One of Temu’s most striking features is its ability to offer high volumes of products at very low prices. This is due not only to its direct supply structure, but also to economies of scale and aggressive pricing policies. A strategy is applied to keep users regular on the platform with campaigns such as free shipping, big discounts, gamified coupon systems and “buy one, get one free” for customers who shop for the first time.
This strategy both quickly shapes user habits and makes the platform more visible in social media algorithms.
- Data-Driven and Targeted Marketing
Marketing strategies play a significant role in Temu’s growth. The company analyzes user behavior in detail and offers personalized suggestions. The algorithms in the application evaluate the products the user browses, the time spent, the click tendencies and the purchasing habits and create special campaigns for them. This creates a “fear of missing out” (FOMO) effect on the user.
Temu, which advertises intensively especially on social media platforms such as TikTok, Instagram and Facebook, uses low prices, free product opportunities and time-limited campaigns to attract the attention of users. Most of this content is designed to direct users to download the application directly and make instant purchases.
- Triggering Fast Consumption Habits
Temu’s interface is designed to ensure that users spend longer on the platform and increase their shopping behavior. The application works almost like social media: mechanisms such as the infinite scroll feature, daily rewards, recommendation systems and “today’s deals” keep users’ attention very much alive.
This dynamic structure triggers users to shop not only based on needs but also with impulsive and instant decisions. Thus, the platform provides a transition from the traditional “needs-based e-commerce” approach to the “fun-based consumption” model.
- Striking Growth Data
Temu’s business model has enabled it to reach a large audience in a short time thanks to the strategies it has implemented. In August 2024, Temu became the second most visited e-commerce site in the world with 185.6 million visits worldwide.* This remarkable growth is a very positive result for the company of high-volume advertising campaigns and striking pricing strategies carried out on social media.
These growth figures also support Temu’s “mass economy” model. The platform feeds its strategy of low profit margin but high volume with a continuous flow of users. In this way, the costs per user are reduced and marketing efficiency is increased.
PDD Holdings
Temu is owned and managed by PDD Holdings, which is actually the founder of Temu. This company is also the founder of the popular China-based e-commerce platform Pinduoduo. PDD Holdings has taken an innovative approach in the e-commerce world, and has managed to lower prices by connecting directly between the producer and the consumer, unlike the traditional business model.
The person who led the establishment of Temu is Colin Huang, the founder of PDD Holdings. Colin Huang is also the CEO of Pinduoduo and is leading the globalization of these companies. Behind Temu’s rapid growth is Huang’s passionate vision to revolutionize the e-commerce world.
Temu’s Logistics and Environmental Impacts
High Carbon Emissions
Temu’s fast delivery guarantee requires a logistics system that increases carbon emissions. Since the platform ships directly from China to consumers worldwide, each air freight shipment produces approximately 10 kg of CO2 emissions. Considering that millions of orders are shipped annually, the environmental damage and carbon emission rate of this logistics model worldwide becomes inevitable.
For example, it is estimated that Temu’s annual operations cause over 4.3 million tons of CO2 emissions. This figure means 25% more carbon emission compared to many e-commerce platforms operating in the US.*
Excessive Use of Packaging
Temu aims to speed up the logistics process by generally shipping its low-cost products in individual packages. However, this method causes more packaging waste than necessary. According to research conducted in 2022, Temu’s intensive use of packaging increased the amount of waste by 35% in some regions.
More importantly, most of this packaging consists of plastic and its recycling rate is very low. Since plastic waste can take centuries to decompose in nature, this poses a serious threat to the ecosystem.
Fast Fashion and Disposable Consumption Culture
Fast fashion is an unsustainable consumption model in which low-cost and trend-oriented products are designed in a very short time, produced under unfair conditions and introduced to the market. In this model, products are generally produced with high-wear raw materials that will be thrown away after a few uses. In addition, their prices are so cheap that buying them becomes an almost impulsive reflex for the consumer.
Temu has become a platform that supports exactly this model with the incredibly low-priced products it offers. Products such as clothes, jewelry, household goods and toys on the platform are mostly produced from short-lived, low-quality materials and are purchased by many consumers with the idea of “using and throwing away a few times”. Users are tempted to shop for more than they need with the attraction of being able to buy products for a few dollars, which results in a serious waste problem, waste of natural resources and environmental degradation.
Temu’s aggressive discount campaigns, notifications that create “buy now” pressure and constantly changing product stocks distance users’ motivation to shop from rationality, creating a sense of “gamification”. This completely puts the concept of sustainable consumption to the background, turning shopping itself into entertainment and products into temporary means of happiness.
Temu has become the digital showcase of disposable consumption culture not only with its affordable prices but also with its approach to shopping.
Although Temu’s growth strategy has been a great success in economic terms, its negative environmental impacts cannot be ignored. The company’s adoption of a sustainable business model is of critical importance not only to protect its brand image, but also to take responsibility for the global environmental crisis.
If Temu does not develop sustainable solutions in its logistics and packaging processes, it may harm both the environment and its own business model in the long run. Consumers’ conscious shopping and turning to sustainable options will contribute to the faster evolution of this process.
We will all see together what path Temu will follow in the future. However, there is one truth: environmental sustainability is no longer a choice, it has become a necessity, and all organizations must adapt to this necessity.
