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author|Li Xiaoxia

edit|Qiao Qian Yang Xuan

This September will mark two years since its launch. Can Temu, the cross-border e-commerce subsidiary of Pinduoduo, still maintain its rapid growth?

The answer is yes.

36Kr has exclusively learned that Temu's sales in the first half of this year soared to approximately US$20 billion. In comparison, Temu's sales in 2023 were US$18 billion.

Placed in the broader coordinates of the "Four Little Dragons Going Overseas", SHEIN's sales reached US$20 billion in 2021, nine years after its establishment; in 2023, TikTok's e-commerce transaction volume reached US$20 billion, which took three years.

Temu's pace in site development has slowed down relatively, but in the new countries it has entered, Temu has continued its rapid growth. For example, in Brazil, it became the most downloaded application only one month after its launch. In the past 30 days, Brazil was the second most downloaded market for Temu applications, with more than 5 million downloads, second only to the United States.

Temu is still telling a story about Chinese companies sailing rapidly overseas, but the narrative style is gradually shifting from "full trusteeship" to "semi-trusteeship".

36Kr learned that in early July, after less than four months of investment, Temu’s “semi-hosted” sales in the United States accounted for 20%.

On March 15 this year, Temu launched a semi-hosting model on its US site. Logistics fulfillment is no longer the responsibility of the platform as in full hosting, but needs to be resolved by merchants themselves.

For the platform, this is a model that is superior to full hosting from many perspectives.

For example, it solves the limitation that full-hosting can only handle small items, which helps the platform to achieve a larger scale; the platform no longer needs to bear high fulfillment costs, which is conducive to reducing losses.

Temu's development is inseparable from a key factor - the United States' "de minimis terms" tariff exemption policy. The core of this rule is that individual American consumers can be exempted from tariffs as long as they purchase imported goods worth US$800 or less.

Both Temu and SHEIN are the biggest beneficiaries of this exemption rule. According to U.S. Customs data, as many as 1 billion packages entered the United States through "minimum terms" in 2023, one-third of which came from Temu and SHEIN.

As Trump's return to the White House becomes more certain, the door that provides advantages for full trusteeship may close at any time. Semi-trusteeship, which does not take the tax-free route, may be a way to resolve the hidden dangers.

Reducing the proportion of the US market is also Temu's focus this year to reduce its reliance on a single market. According to a previous report by The Information, Temu hopes to reduce the proportion of GMV in the United States from 60% to 30% this year.

According to 36Kr, Temu's GMV in the second quarter was around US$12 billion, with the US market accounting for about 45%. In total, semi-hosted sales were less than US$1.1 billion.

It doesn’t seem like an attractive number, but based on Temu’s goal this year, annual sales of US$60 billion, of which semi-hosting should reach US$20 billion, accounting for more than 30%.The results of hosting have been a big change.

Of course, this result is the result of the platform's unremitting efforts. More than 1,000 semi-managed buyers are recruiting merchants, and the platform's natural traffic is almost tilted towards semi-managed products. Among 100 recommended products, semi-managed products with local warehouses can account for 85. Even if the sales volume of this product is zero, it can enjoy the same traffic distribution as fully managed products with sales of tens of thousands, or even higher.

According to an expert memorandum, Chinese merchants in the United States that operate Amazon, run independent websites, and engage in offline wholesale have a clearance demand of at least US$30 billion each year, and Temu semi-hosting can obtain US$5 billion of this scale.

The initial success of semi-hosting in the United States is crucial for Temu. 36Kr learned that Temu's plan is to first test it in the United States, and if it goes well, it will promote this model to Europe and the world.

In fact, Temu is also doing this.

On July 19, Temu held an investment promotion conference in Shenzhen with the theme of "European Semi-Trailer Debut". Temu's senior vice president appeared at the venue and opened the entry of semi-hosted merchants into the "Five European Countries" - the United Kingdom, Germany, France, Italy and Spain.

The shrinking US market needs to be balanced by the growth in Europe. In the future, Temu hopes to reach a 50% market share in Europe, so the investment can be larger than in other markets. According to 36Kr, Grape is mainly responsible for the European market.

Because semi-hosting requires merchants to have the ability to ship overseas, Amazon merchants who have already mastered logistics and warehousing skills are the main targets of Temu.

Since many Amazon big sellers only use Temu as a channel to clear inventory, many of Temu's semi-hosted merchants currently have no experience in cross-border e-commerce. They need to find overseas warehouses themselves and send small packages via DHL, UPS, etc. The fulfillment efficiency is not high, and lost or missed items often occur.

Therefore, in the past month, Temu has also accelerated the recruitment of official overseas warehouse partners, which has expanded from the original 7 to more than 20, including Dafangguang, Wanyitong, and Cross-border Xingyun. According to 36Kr, becoming a Temu-approved overseas warehouse partner not only provides free platform traffic, but also access to Temu's last-mile account (FedEx, UPS, DHL and other express accounts), and can enjoy last-mile express discounts.

As Temu penetrates deeper into Amazon's heartland, the latter has begun to fight back and recently launched the "Low Price Store". Similar to Temu's full-service store, merchants only need to send the goods to Amazon's warehouse in China, and then ship them overseas in a unified manner.

In addition to the increasingly fierce head-on confrontation, Amazon's move is also aimed at competing for the already insufficient air transport capacity, which means that trunk line costs will also be higher.

According to 36Kr, the fulfillment costs of Temu's full-hosting service have not been effectively improved, and the progress of sea transportation is relatively slow due to the long transportation time.

Obviously, how to quickly expand and strengthen semi-hosting has become a more urgent matter for Temu.