Temu, JD Logistics bet big on the US

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Hi there,

I had never heard of Temu until the Super Bowl. The Chinese ecommerce platform, which is a subsidiary of US-listed PDD Holdings, splashed out millions of dollars for a 30-second spot during the most watched TV event in the US.

While that may seem like a lot of money, it seems to have been worth it. Temu has been the most downloaded app in the US since the day of the Super Bowl – and that’s among all mobile apps, not just in the shopping category.

A Super Bowl ad that gets people talking ends up getting a lot of additional media coverage, which may explain the explosion in prices of ad placements for the sporting event over the years.

But Temu’s success is about more than slick advertising, as my colleague Huong explains in her piece on the company this week. She explores how Temu has benefited from being a subsidiary of PDD Holdings and how it has learned from the mistakes of players like Wish, which was too focused on growth and did not pay enough attention to quality.

One of Temu’s strategies is to gain leverage over its suppliers by offering them high order volumes and heavily subsidizing their logistics costs.

Players like JD Logistics provide the infrastructure that allows the Temus and Sheins of the world to succeed. In this week’s Hot Take, I take a closer look at JD Group’s logistics business, which recently expanded its operations in California.

Despite talk of economic decoupling between the US and China, trade between the two countries continues to rise, creating an opening for Chinese companies to bring their innovation and efficiency Stateside. The question is whether we are still in the early stages of a long-term growth story or in the last hurrahs of a globalized world that is fragmenting.

— Simon

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THE BIG STORY

Why SEA should watch out for Shein top rival Temu

Tech in Asia deciphers the factors behind the meteoric rise of Temu, Pinduoduo’s sister company.

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THE HOT TAKE

JD Logistics’ California dreams

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NEWS YOU SHOULD KNOW

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