Business Strategy – Group Project on Temu

 

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TEMU – Net Profit / Loss

TEMU, the rapidly growing e-commerce platform of PDD Holdings, has several integral opportunities to exploit in the competitive online retailing market. The most prominent opportunity is expansion into rising markets (Supanitivararrom, 2024). Due to its price-war culture and focus on affordability, TEMU can potentially expand to numerous markets with increasing internet penetration but limited disposable income, such as Southeast Asia, Latin America, and Africa. These markets have an up-and-coming middle class interested in value shopping, and TEMU’s factory-direct model is perfectly positioned to meet this need.

Another key opportunity is strategic alliance with global delivery companies for optimizing deliveries. Faster and efficient delivery would make TEMU stand out from the competition, particularly where slow delivery speeds are a source of frustration to customers (Ologunebi et al., 2024). With partner logistics companies based locally or its own warehouses based locally, TEMU can cut costs and speed up delivery time and add more muscle to its value proposition.

Moreover, TEMU can leverage advancements in artificial intelligence and data processing to customize the consumer experience. Through enhanced recommendation algorithms and optimal advertising targeting, the platform will enhance customer experience and retention. Such a data-driven approach would also allow TEMU to identify best-selling items more rapidly than its competitors, allowing it to dynamically realign its inventory levels accordingly.

The growing trend of social commerce is another path to explore. Incorporating more participative features, including live shopping sessions or user-generated content, has the potential to boost customer interaction and sales. TikTok Shop has already indicated the viability of social commerce, and TEMU could replicate the same by evolving a community-based shopping platform.

With consumers now considering sustainability, TEMU can go for green initiatives such as promoting sustainable products or reducing packaging waste to win over green-conscious consumers (Tariq & Chen, 2024). In availing these opportunities, TEMU can position itself as the vanguard of global e-commerce.

References

Ologunebi, J., Taiwo, E. O., & Alli, K. (2024). Digital Consumer Behavior in E-commerce: A Study of Amazon and Temu’s Customer Purchase Decision-Making Processes in the UK and the USA. 
Available at SSRN 5071874.

https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=5071874

Supanitivararrom, T. (2024). 
Relative valuation of PDD Holdings Inc (Doctoral dissertation, Mahidol University).

https://archive.cm.mahidol.ac.th/bitstream/123456789/5550/1/TP%20FM.004%202024

Tariq, H., & Chen, Z. (2024). Unveiling Negative Perceptions: Understanding Swedish Consumer Dynamics in Cross-Border E-Commerce with Amazon and Temu.

https://gupea.ub.gu.se/bitstream/handle/2077/82901/MAC%202024-6 ?sequence=3