Amazon Gets Competition

By Douglas A. McIntyre Published Feb 19, 7:30AM EST

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No one in the United States had heard of Temu until it spent millions of dollars on Super Bowl ads. And, it is still spending. The Chinese company believes it can take meaningful market share from Amazon, the e-commerce king. Amazon.com Inc. (NASDAQ: AMZN | AMZN Price Prediction) does not appear worried for now. (Amazon’s shares have surged this year.) However, Temu plans to up its marketing game.

According to JPMorgan, Temu will spend $3 billion on marketing in the United States this year. By some estimates, it will be the second largest advertiser on Facebook, behind only Amazon. The idea that Temu is an obscure company is not accurate. Temu is already doing well in some countries, particularly South Africa, Israel, Japan and South Korea. The Temu app is among the most downloaded in the United States. According to Business of Apps, it had over 70 million active users last year. Its shipping volume in the United States is over 2.2 million packages a day.

China-based PDD Holdings Inc. (NASDAQ: PDD) owns Temu, along with Chinese e-commerce site Pinduoduo.

Temu has been accused of selling counterfeit products and being a marketplace where credit card information can be stolen. According to ZDNet, “Temu was accused by the US government of potential data risks after its sister site, e-commerce platform Pinduoduo, was suspended by Google for containing malware.”

Is Temu a real competitor to Amazon? That depends on three things. Do its low prices draw people? Will people be worried about the site’s security? And how much money is management willing to spend to get customers?

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.