Temu plans to change its strategy on extended delivery times

Over the past year, Temu has made a splash on the e-commerce scene with its very low prices and wide array of products.

However, this approach has come at a cost: delivery times. It’s one of the main complaints cited about Temu’s operations, alongside product quality. But now the company is shifting its strategy, inviting US-based warehouses to join its platform.

• Under the previous model, Temu would have products primarily shipped directly from China, which is also known as the “managed marketplace” framework.
• This strategy centralized inventory and led to longer delivery times but lower prices. Now, in order to gain even more ground on the likes of Amazon, Temu needs to make sure customers are able to get their purchases in their hands as quickly as possible, Business Insider notes.

Under the new model, sellers in the United States would handle fulfillment and logistics on their own as opposed to being handled in China. Temu plans to highlight the specific products on listings that will identify if it will be shipped from a warehouse in the United States. Those sellers will also be identified with a badge that reads “faster delivery.”

• In addition to cutting down on delivery times, the new format helps Temu diversify its product assortment to include larger, bulkier SKUs and cut back on long-haul shipping costs, per Business Insider.

Retail Brew reached out to Temu, which declined to comment.

“To have more local warehouses, quicker delivery times, allowing brands to sell directly through Temu—it’s got so many advantages to them,” Paul Carter, CEO and co-founder of GWS Magnify, told Retail Brew.

Be better: Customers aren’t imagining these issues surrounding delivery times. The Better Business Bureau (BBB) gives Temu a C+ rating. The company has received more than 2,000 complaints in the past three years. For comparison, Amazon has a B rating and has received 652 complaints in the same time frame.

• The BBB’s rating is a reflection of how the business is likely to interact with its customers. The BBB looks for and uses information directly from businesses and from public data sources to reach its rating.

“They’re making delivery promises, and people aren’t getting their stuff when they’re supposed to be,” Melanie McGovern, director of public relations and social media for the BBB, told Time.

New kid on the block: Improving delivery times would help Temu expand what has already been a thriving e-commerce operation since its inception. Between January of this year and 2023, Temu’s sales grew 840% and exceeded 1,100% during the holiday shopping season, according to data from Earnest Analytics.

• And even with poor delivery times, Temu’s customers remain loyal. Earnest found that nearly 30% of Temu customers made a transaction on the platform 16 months after their first purchase, nearly double the rate of Walmart and Target customers, and around half the rate of Amazon.

“When you see the Amazon trucks, they’re just everywhere. They’re coming from the local distribution centers, and it’s a machine,” Carter said. “Temu needs to mimic that to a certain degree.”