After entering the fiercely competitive European and American markets, the emerging Southeast Asian market, and the farthest South American region from China, Pinduoduo‘s tentacles have now extended to the low-key but highly potential Africa.
On January 17th, Temu, a cross-border e-commerce platform under Pinduoduo, officially launched its South Africa site. This is also the 49th country that Temu has entered since its launch in September last year. Prior to this, it has rapidly expanded its coverage to Asia, Europe, North America, South America, Oceania and South Africa with over 200 million downloads.
According to the latest data from SimilarWeb, as of the end of last year, Temu’s global unique customer visits have reached 467 million, ranking second globally. The first is Amazon with a visitor count of 2.345 billion, and Shein, which is fiercely competing for users with Temu, ranks third with 172 million.
The rapid evolution of this ranking is astonishing. Just 6 months ago, Temu’s global visitor count was fixed at 226 million, ranking fourth. Now it has doubled.
The above changes are related to Temu continuously opening new websites and maintaining its consistent low-price promotion strategy.
In South Africa, Temu also adopts the popular coupon discount and free shipping services familiar to users in other regions. Most of the product prices range from 10 Rand to 300 Rand (approximately ＄0.5-16), which gives it a certain price advantage compared to other local e-commerce platforms.
Temu usually does not establish its own logistics, but instead cooperates with third-party logistics service providers. It is understood that Temu’s logistics partner in South Africa is Fastway, and the delivery time takes 6 to 20 days, which is slightly longer than the logistics efficiency in other regions.
But in order to retain users, Temu stated that if the delivery arrives after 20 days, consumers can receive 20 Rand points (approximately ＄1.1) within 48 hours.
In the past, due to weak transportation infrastructure and underdeveloped payment systems, it was difficult to deliver e-commerce orders in Africa, and Chinese internet companies rarely ventured into this land. However, with the gradual increase in smartphone penetration and internet usage in Africa, more and more people have started shopping online.
After the epidemic, the penetration rate of local e-commerce in Africa has accelerated, and some irregular platforms have also ceased operations. The industry is gradually returning to rationality.
As the second largest economy in Africa, South Africa’s e-commerce market has tremendous growth potential.
According to data from Datareportal, as of the beginning of last year, over 70% of people in South Africa use the internet, with many of them being young people. It is estimated that by 2025, there will be 33.4 million e-commerce users in South Africa, with an e-commerce penetration rate of 53.1%, making it potentially the largest e-commerce market in Africa.
But Temu is not without competitors in South Africa. Currently, there are already the largest e-commerce platform in Africa, Jumia, and the well-established e-commerce platform Bidorbuy. Shein has also entered this region ahead of Temu.
Not only that, Amazon plans to launch its South African site this year. South African internet giant Naspers has also announced an increased investment in its e-commerce platform Takealot. Temu faces fierce competition in South Africa, no less than in other regions.
Considering the cultural and regulatory policy differences in different countries, while expanding its overseas presence, Temu also needs to address an increasing number of issues related to supply chain, logistics, compliance, and more. As Pinduoduo presents itself as a ‘global company,’ the expectations from the outside world will become even more demanding.