The Rise of Temu

Temu, the Boston-headquartered online marketplace owned by China’s PDD Holdings, has rapidly emerged as a disruptive force in global e-commerce. Launched in late 2022, Temu’s ultra-cheap offerings and aggressive growth tactics have drawn hundreds of millions of shoppers, particularly in the United States. With its slogan “Shop like a billionaire,” Temu undercuts traditional retailers and even e-commerce giants like Amazon on price, leveraging China’s vast manufacturing base and innovative marketing strategies. As Temu’s parent PDD Holdings enjoys surging revenues, the newcomer’s rise poses pointed questions: Can ultra-low prices and gamified shopping sustain a challenge to Amazon’s dominance? And how will regulatory headwinds and fierce competition shape Temu’s trajectory? This report provides a focused analysis of Temu’s market impact – especially in the U.S. – alongside comparisons to Amazon and other rivals, and examines PDD Holdings’ financial performance through 2025.

From Pinduoduo to Temu: Emergence and Global Expansion

Temu is an outgrowth of PDD Holdings’ success in China’s domestic market. PDD (Nasdaq: PDD) is best known for Pinduoduo, a Chinese e-commerce platform founded in 2015 that pioneered group buying and bargain-basement pricing. By appealing to price-conscious consumers in China’s smaller cities, Pinduoduo experienced explosive growth and went public in 2018. Its innovative model – encouraging users to team up for bulk discounts – helped Pinduoduo reach hundreds of millions of users and challenge China’s incumbents Alibaba and JD.com. This domestic success gave PDD Holdings a strong financial base and operational know-how in logistics, supply chains, and social commerce, setting the stage for an international foray.

In September 2022, PDD launched Temu (tee-moo) as an overseas-focused sister platform to Pinduoduo. Unlike Pinduoduo, which serves Chinese consumers, Temu targets global shoppers with ultra-cheap goods shipped directly from China. Temu made its debut in the United States, timing its entry to appeal to budget-conscious Americans facing high inflation. The app caught on quickly – in the first quarter of 2023 it was downloaded 19 million times in the U.S., becoming the most downloaded shopping app on both Apple and Google’s app stores. By January 2023, Temu’s monthly gross merchandise value (GMV) had rocketed from just $3 million at launch to $192 million. This torrid growth signaled Temu’s potential to shake up the U.S. e-commerce landscape.

Building on its U.S. success, Temu rapidly expanded internationally. By April 2023, Temu opened access to Canada, Australia, and New Zealand, and then rolled out across major European markets including France, Germany, Italy, the Netherlands, Spain, and the UK. Within its first year, Temu grew to serve consumers in North America, Oceania, and all 27 EU member states. The platform’s cross-border model mirrored that of fast-fashion juggernaut Shein – shipping directly from Chinese warehouses to customers worldwide – but Temu offered a broader range of goods beyond apparel. By late 2024, Temu had also entered markets like Japan and several Latin American countries, seeking truly global reach. This breakneck expansion demonstrates how PDD Holdings quickly repositioned itself from a China-focused company to an international player leveraging the Temu platform.

Temu’s early traction abroad was bolstered by PDD Holdings’ deep pockets and experience. The company aggressively invested in user acquisition and logistics. Temu set up its headquarters in Boston for proximity to the crucial U.S. market, even as core operations and supplier networks remained in China. The strategy was clear: subsidize growth overseas using profits from Pinduoduo’s still-booming China business, scale up Temu’s user base, and establish brand recognition before competitors could react. By the end of 2023, Temu had become a top e-commerce app in multiple countries, with particularly strong adoption in the U.S. and parts of Europe. However, its rapid rise also attracted scrutiny and sparked responses from entrenched rivals and regulators worldwide.

The Ultra-Cheap Model: How Temu Keeps Prices Low