Temu is sweeping the Japanese market, with monthly user numbers growing to 2.2 million

Unexpectedly, Japanese people who don't like online shopping have also become addicted to Temu. As we all know, physical stores in Japan have always had a strong influence and can defeat e-commerce platforms. From convenience stores all over the streets to large supermarkets, its offline shopping environment is quite rich and diverse. At the same time, since the prices of offline goods are almost the same as those online, most Japanese people prefer to buy goods in physical stores and enjoy the shopping experience of what you see is what you get.

Against this background, Pinduoduo's cross-border e-commerce platform Temu announced its entry into the Japanese market, which undoubtedly aroused widespread attention and many doubts from the outside world.

However, like Pinduoduo in the domestic e-commerce field, Temu has demonstrated its unique ability to make the impossible possible.

According to the latest data, Temu's user base has successfully exceeded 15 million in January this year. Since the official launch of the service in July 2023, its user growth momentum in Japan has been extremely strong, with the number of users increasing by 2.2 million per month.

As of now, Temu's user base has reached 52% of the average user base of the three leading Japanese e-commerce platforms, including "Amazon Shopping", "Rakuten Ichiba" and "Yahoo! Shopping".

It is said that Japanese people generally do not like online shopping, but Temu still shows strong market appeal in the Japanese market. Why is this?

On the one hand, similar to the domestic situation, since the bursting of the Japanese economic bubble in the 1990s, Japan has entered an era of consumption downgrade.

Against this backdrop, as wage growth has failed to keep pace with price increases, many Japanese are inclined to consume less or turn to more affordable brands and goods.

As a cross-border e-commerce platform that mainly adopts a low-price strategy, Temu has successfully attracted a large number of Japanese consumers from the beginning with its unique positioning. Data shows that after only 35 days of its launch in Japan, Temu reached 1 million downloads, which took 45 days for the US market to achieve, and Japan's population is only one-third of that of the United States.

On the other hand, Japan has a serious aging problem, and the labor costs required for the logistics and distribution industry are relatively high. At the same time, since door-to-door delivery services are a common and necessary demand in Japan, this has further pushed up logistics costs.

Therefore, in order to win the favor of Japanese consumers, it is crucial to solve the challenges of logistics and distribution. In order to seize this market pain point, Temu provides Japanese consumers with three services: free shipping on orders, quick resolution of delivery problems, and free returns within 90 days.

In contrast, major competitors in the Japanese market, such as Amazon and SHEIN, have set a basic shipping fee of 400 to 500 yuan, which increases the shopping cost for consumers. However, Temu has achieved a clever balance between cost and consumer experience by setting a shipping requirement of 1,400 yen, thus significantly improving its competitiveness in the Japanese market.

Judging from the ratings and feedback on the app store, Japanese consumers are generally satisfied with Temu. Among the many comments and feedback, users focus more on Temu's delivery service rather than the price factor.

In this regard, Temu's outstanding performance in logistics and distribution is undoubtedly one of the key factors for its success in the Japanese market.

Regardless, it is an indisputable fact that Temu has swept the Japanese e-commerce market, and its expansion in the Asian market has taken an important step. Next, how Temu will deepen its layout and further consolidate its leading position in the global e-commerce field will become the focus of market attention.

Temu's global footprint is growing

It is worth noting that Temu quickly expanded into the Korean market in the second month after entering Japan and achieved remarkable results there.

Data shows that between September 25 and October 9, 2023, Temu topped the list in South Korea with a staggering 399,000 downloads, fully demonstrating the popularity of Temu as a cross-border e-commerce platform in the Korean market.

Not only that, the latest set of data also shows that Temu has achieved astonishing growth in the number of registered users in the Korean market.

From 520,000 registered users in August last year, the number of Temu's registered users in the Korean market surged in just a few months, reaching 5.7 million in January this year, an increase of more than 10 times.

At present, Temu's expansion strategy in the Japanese and Korean markets has begun to show results. In order to achieve greater breakthroughs and success, it is imperative to continue to deepen and expand the layout of these two markets.

Then again, the reason why Temu chose Asia as its main market, especially focusing on the Japanese and Korean markets first, is mainly due to the huge market potential of these two countries.

In Japan, although online shopping cannot compete with physical stores, the size of its e-commerce market still ranks third in the world.

According to data, Japan's e-commerce sales revenue is expected to grow by 6.8% to US$153.984 billion in 2023. South Korea's e-commerce market is expected to grow at a compound annual growth rate of 25% from 2023 to 2028.

In short, although physical stores still have a certain influence in the Japanese market, the rapid rise and huge potential of the e-commerce market have also made Japan an important market that Temu cannot ignore.

In South Korea, due to the extremely high penetration rate of the e-commerce market and the Internet penetration rate of over 97%, South Korea has become one of the countries with the most developed e-commerce markets in the world.

According to statistics, in 2023, South Korea's e-commerce transaction volume reached 25.8 trillion won (about 2.28 billion U.S. dollars), a year-on-year increase of 15.6%, accounting for 28.9% of the entire retail industry, ranking fourth in the world. Among them, the transaction volume of cross-border e-commerce reached 7.8 trillion won (about 690 million U.S. dollars), a year-on-year increase of 25.9%, accounting for 30.2% of the total e-commerce transaction volume.

This data fully demonstrates the huge demand and potential of the Korean e-commerce market, and further strengthens Temu's determination to achieve rapid growth in the Korean market.

Based on in-depth consideration of the potential of these markets, Temu wisely chose to enter the Japanese and Korean markets first, hoping that after achieving success in these two countries, it would be able to further expand its market share in Asia and even other emerging markets, laying a solid foundation for Pinduoduo's "aggressive" globalization strategy.

Today, Temu is developing rapidly in the Asian e-commerce market. Not only is its territory expanding rapidly, but its rapid development momentum has also had a profound impact on the global e-commerce market.

The Asian market cannot be ignored

In fact, there are many cross-border e-commerce platforms eyeing the Asian market, and Temu is just one of them.

Take TikTok as an example. The platform has performed well in e-commerce business in Southeast Asia. Data shows that in 2023, TikTok e-commerce will account for 90% of GMV in Southeast Asia, with market shares in Indonesia, Thailand, Vietnam, the Philippines, Malaysia and other countries accounting for approximately 28%, 22%, 17%, 12% and 11% respectively.

Obviously, the Southeast Asian market has occupied a vital position for TikTok e-commerce and has become its main source of revenue.

In addition to Temu and TikTok, SHEIN also did not miss the fat piece of meat in the Asian market.

In the Japanese market, SHEIN successfully surpassed AliExpress with its precise market insights and strategies, topping the shopping app list in 2022. It also opened a permanent physical store in Harajuku, a fashion landmark in Tokyo, and held pop-up store events in Nagoya, Hiroshima, Osaka and other cities, establishing extremely close ties with local consumers.

In summary, whether it is Temu, TikTok or SHEIN, they have shown their deep interest in the Asian market. In this fertile land, there are still many development opportunities for these cross-border e-commerce platforms.

It is true that the Asian market is very different from the North American and European markets, and it has a more deeply rooted retail tradition. Therefore, for these cross-border e-commerce platforms, only by carefully finding their own market positioning and grasping the unique needs of Asian users can they secure the victory of globalization and become the leader in the industry.

When cross-border e-commerce platforms represented by Temu are able to thrive and cope with various complex and changing market environments with ease, the entire industry will surely enter a new stage of high-quality development.

From China Home Grid