Since its launch in September 2022, Temu has gained a substantial 17% share of the U.S. dollar store market by December 2023, driven by strategic discounting. Shoppers often see savings up to 40% compared to Amazon prices. The platform operates as a marketplace, connecting sellers with consumers rather than holding inventory. Its success lies not only in low prices but also in leveraging discount psychology, as sellers can provide cheap, generic alternatives to well-known brands. This approach enables a potentially higher profit margin despite lower product prices.
Temu has rapidly captured a significant market share in the U.S. dollar store sector, utilizing aggressive discounting strategies to attract consumers and leverage perceived savings.
Success on Temu hinges on discount psychology as much as genuine price advantages, facilitating higher profit margins through competitive pricing on generic alternatives.
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