Temu: The “Price Butcher” of E-Commerce Competing for Global Dominance

The history of multiple Internet wars reveals one truth: trying to “divide the river and rule separately” is a naïve fantasy. No matter how dominant a platform’s position or how massive its user base, continuous diversion by competitors can erode it. Offense remains the best defense.

It took Temu only two years to go from being ignored by e-commerce giant Amazon to being treated as a formidable threat met with multi-front counterattacks.

According to Sensor Tower’s report, in 2024, Pinduoduo’s overseas platform Temu became the most downloaded app globally. By December 2024, Temu had reached nearly 900 million total downloads — ranking first among all e-commerce apps both in total and in growth rate.

Facing this rapidly expanding and aggressive new rival, Amazon launched its counteroffensive — learning from Temu’s “fully-managed” and “semi-managed” operations while strengthening its position in the low-price segment. Actions included launching a low-price section on its main site and rolling out a budget-shopping platform called Haul Bargain Deals, nicknamed “Ya-Duoduo.”

There were even rumors that Amazon required its top-20 sellers by sales volume to “choose one” between Amazon and Temu. Although Amazon later denied the claim, many Chinese observers familiar with domestic platform battles remarked that “Amazon can’t sit still anymore.”

Historically, Amazon and Temu differed greatly in core strengths, market positioning, and competition focus. As the long-established global e-commerce leader, Amazon is favored by mid- to high-end consumers for its rich product range, reliable after-sales service, and superior logistics and fulfillment systems. Temu, on the other hand, initially relied on aggressive price wars to capture users but is rapidly closing its logistics-speed gap. If Temu continues building regional distribution centers or deepening local logistics partnerships, it could significantly challenge Amazon’s delivery advantage.

The lesson remains clear: in the Internet world, “peaceful coexistence” is an illusion — even the most stable empire cannot survive continuous competition. Offense, again, is the best defense.

Grabbing Talent, Goods, and Market Share

In the early stages of competition, Amazon reinforced its logistics and fulfillment strengths, promising faster shipping and encouraging merchants to use U.S. warehouse-distribution services.

Temu’s “semi-managed” model changed the game. Unlike “fully-managed” mode, where sellers ship goods to Temu’s domestic warehouses and the platform handles everything (logistics, operations, ads, pricing, after-sales), in the semi-managed model sellers ship goods in advance to overseas warehouses and fulfill local orders themselves — reducing logistics costs while improving efficiency.

Reports indicate that Temu’s semi-managed deliveries now reach consumers in 3–7 days, nearly matching Amazon’s fulfillment speed. As Temu accelerates warehouse expansion abroad, the gap may narrow even further.

Once logistics parity loomed, Amazon launched a ground-level battle. The pilot areas for Haul Bargain Deals were Yiwu and Shenzhen — the former famed for low-cost household goods, the latter home to China’s electronics hub Huaqiangbei — allowing Amazon to broaden its supply of products priced under $10.

In an amusing episode, when Amazon inaugurated its first Asia-Pacific Innovation Center in Shenzhen’s Qianhai Port in November 2024, Temu staff were reportedly downstairs inviting attending merchants to join their platform the very same day.

To compete for the Chinese supply chain that underpins Temu’s rise, Amazon has strengthened partnerships with large OEMs and attracted Chinese cross-border sellers by lowering commissions to secure more cost-effective goods.

At the same time, both sides are racing in overseas localized production. Amazon is pushing “near-shore manufacturing” in the U.S. and Europe to shorten supply-chain response times, while Temu expands aggressively across Asia — strengthening its base in Southeast Asia and accelerating penetration into Japan and South Korea.

On pricing, Amazon uses a price-monitoring system that compares sellers’ listings with other platforms; if a product is priced higher on Amazon, the seller may be penalized or even suspended. Early on, Amazon removed Temu from this comparison list, as matching Temu’s rock-bottom prices would have triggered mass penalties. But as Temu’s growth surged, Amazon increased pressure on suppliers, demanding they “match Temu’s cost structure.”

The more crucial front is the battle for market share — the decisive factor in this war. Initially, Temu targeted low- and middle-income consumers with “ultra-low prices + social referral” tactics, capturing long-tail users underserved by Amazon. Once Amazon sensed the threat, it allowed third-party sellers to offer cheaper products and launched Haul Bargain Deals to counterattack. Meanwhile, Temu began imitating Pinduoduo’s domestic brand-upgrade strategy, introducing more affordable luxury labels and expanding from fashion and accessories to higher-ticket categories like furniture and appliances — though progress has been slow.

Who Holds the Winning Cards?

In the short term, Temu clearly has the growth advantage. With its low-price strategy and viral social expansion, Temu is scaling fast in Western lower-tier markets and across Asia. Sensor Tower’s data reflects that Temu’s user base may soon rival — or even surpass — Amazon’s.

However, in total transaction volume, Temu still lags behind. Although its 2024 GMV reportedly exceeded $52 billion, its revenue remains undisclosed — whereas Amazon’s 2024 online-store revenue reached $247 billion, with total annual revenue soaring to $638 billion.

Many analysts once argued that Amazon’s Prime membership ecosystem ensured far greater user stickiness than Temu’s price-driven shoppers, who were seen as subsidy-chasing and fickle. Yet, under global inflation and slowing Western economies, Temu’s bargain model found fertile ground. Amazon could no longer ignore this expanding low-price segment, hence the launch of Haul Bargain Deals.

Still, how exactly does Amazon position Haul Bargain Deals internally? Judging from its gradual onboarding and limited traffic support, Amazon seems reluctant to make Haul its full-scale weapon against Temu. It acts more like a defensive low-price extension — signaling Amazon’s hesitation to dilute its premium brand image or alienate mid- to high-end customers.

Whether Amazon can fend off Temu’s low-price assault without damaging its core high-end business will be one of the decisive factors in this power struggle. Can Haul Bargain Deals truly capture the lower-income market?

Meanwhile, *Modern Retail* reported that seller loyalty to Amazon is weakening. Six sellers interviewed said they were actively expanding to other platforms, mainly due to rising costs and shrinking profits. The article also noted that many view Amazon as increasingly complex and difficult to work with — especially smaller merchants.

Temu, for its part, faces its own sustainability concerns. Its low-price strategy may not be viable long-term. Still in its expansion phase, Temu has not disclosed profitability. The key question: can it build a lasting moat before investor funding runs thin?

Achieving stable profitability will mark a turning point in this global e-commerce race. Sustained profits would validate Temu’s low-price model and prove it has pried open a genuine gap in Amazon’s global dominance.

A greater uncertainty lies in geopolitics. Compared with the more localized Amazon, Temu is far more exposed to tariff and policy risks. On February 1, 2025, Donald Trump announced a 10% tariff hike on Chinese imports effective February 4, alongside canceling the “$800 de minimis exemption.” Although the exemption was swiftly reinstated, the incident underscored Temu’s vulnerability to sudden supply-chain cost spikes. This may explain Temu’s rumored plans to enter South Korea — diversifying geographically to mitigate geopolitical risk.

Finally, Temu must accelerate its push beyond logistics and brand bottlenecks toward becoming a true full-category e-commerce platform. Just as Amazon is moving downmarket, Temu needs to build its own ecosystem, leveraging Pinduoduo’s operational expertise to enhance user retention. Pinduoduo’s domestic brand-elevation experience provides a solid foundation — if Temu can replicate it successfully, it may truly shake Amazon’s global ecosystem.

This article was originally published on the WeChat account “Business Fan”, written by *Pink Devil*, and republished by 36Kr with authorization.