Temu’s business model—if it catches on—could have major implications for U.S. retailers and the global supply chain in the coming year.
, and its stock price increased during a year in which competitors like Alibaba took severe hits.
“It seems like they’re being subsidized to be a loss leader in order to gain market share, which is not unlike what Amazon did for a long time,” says Douglas Schmidt, a professor of computer science at Vanderbilt University. Lukey posted about Temu on Facebook, TikTok, and Snapchat, and eventually convinced friends to join the app, in the process earning a bunch of credits. She used them to order a ring light for her plaster-art small business, Array of Aura’s, as well as an oils diffuser , several necklaces, and a mouse and keyboard for her daughter . Lukey says the keyboard works fine: “I didn’t think it would be that great quality. But it’s pretty good for being free,” she says. “So I’m grateful for it.
The strategy appears to be working: When Lukey posted a photo of her Temu shipment on Facebook, her post was soon deluged by 70 comments from her Facebook friends, which mostly consisted of people posting their own referral links in the hopes of scoring similar hauls.One of the comments on Lukey’s post, however, was significantly less positive than the rest.
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