Temu Introduces Semi-Hosted Model for Improved Merchant Operations

Pinduoduo‘s cross-border e-commerce platform, Temu, is set to introduce a semi-hosted model, targeting sellers who possess overseas warehouses and local dispatch capabilities. This model, which is slated for a March 15, 2024, launch on the US site and end of March for the European site, will enable sellers to independently manage their warehousing and logistics systems, including the importation of platform orders and the fulfillment of deliveries.

Previously, Temu operated under a fully hosted model, where sellers were tasked with shipping products to Temu’s domestic warehouses and declaring supply prices. The rest of the process, including order fulfillment, was handled by Temu. However, under the new semi-hosted model, sellers will manage overseas warehouse products, declare supply prices, and fulfill orders post-purchase. The platform will continue to oversee pricing, marketing, after-sales, and customer service in both models. The primary distinction lies in the management of warehousing and logistics fulfillment.

Since its inception in September 2022, Temu has made significant strides, establishing a presence in nearly 50 countries and accumulating over 300 million global downloads. Its user base has seen a dramatic increase, with mobile monthly active users rising from 4.6 million to 82.4 million from September 2022 to September 2023, outpacing Shein, a seasoned Chinese platform with a decade of overseas expansion.

Temu is also focusing on enhancing its regulatory framework, implementing stricter product inspections, and setting standards for product industry certifications. In terms of logistics, it primarily utilizes air parcels, but is gradually incorporating sea shipping channels into its operations. The current delivery time to the US market generally exceeds a week, a stark contrast to Amazon’s next-day and same-day delivery capabilities.

In January 2024, Temu and Jitu Express redefined their cooperation. Jitu Express will no longer provide a comprehensive “end-to-end” solution for Temu, shifting its focus to last-mile services instead. This allows Temu to select different suppliers for each fulfillment stage, a strategy aimed at minimizing costs and optimizing timeliness.

The semi-hosted model is part of this cost-reduction and efficiency-optimization strategy. According to an industry insider, the semi-hosted model could lower costs and enhance fulfillment efficiency. However, the platform will continue to supervise the logistics process, ensuring accountability and maintaining quality control.

The US, being the second-largest e-commerce market outside of China, holds significant potential for Chinese cross-border sellers. As per Chinese customs data, from January to October 2023, the export value to the US alone reached 420 billion yuan, surpassing that of Europe and Southeast Asia. This makes it an attractive destination for Chinese sellers to maintain stock.

Some sellers believe that Temu’s semi-hosted model could provide a new channel for Amazon sellers looking to clear inventory. Given the costs associated with storage and transportation fees on Amazon, the semi-hosted model could offer a more cost-effective solution.

In response to this, a Temu representative mentioned that the semi-hosted service was not specifically designed for Amazon sellers. With sellers’ capabilities increasing alongside business growth, the semi-hosted service was introduced to provide a more flexible option. Sellers could range from Amazon vendors to suppliers for other offline supermarkets or ordinary OEMs. As their capabilities expand, the platform will naturally offer more choices.

SEE ALSO: JD.com to Sponsor China’s 2024 Spring Festival Gala, Aiming at Acquiring More Users from Small Cities