TEMU VS Specialty Brands: Your margins at risk, your customers on the run!

What you’ll learn:

  • How TEMU is shaking up the French market in just a few months: key figures and aggressive strategies that are putting pressure on specialist brands.

  • Why TEMU’s price war is jeopardizing your margins: understand consumers’ new expectations and how to meet them without sacrificing your profitability.

  • The keys to customer loyalty in the face of EMT tactics: discover how to strengthen customer loyalty through your unique assets.

  • Retail media as strategic leverage: how to maximize your visibility and capture the attention of your targets, even in the face of fierce competition.

  • Concrete actions to protect your brand: differentiation, ethical commitment and personalization to counter the TEMU effect and secure your market position.

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TEMU’s meteoric rise

Since its launch in France in April 2023, TEMU, the Chinese e-commerce platform, has been shaking up the market with dazzling growth. In just a few months, it reached a penetration rate of 11.9%, overtaking Shein, and became the most downloaded app on iOS and Android by August 2023.

Its strategy is based on three pillars: rock-bottom prices, a diversified offer (fashion, electronics, home) and massive marketing, such as its Superbowl advertising or its $200 million investment in digital advertising. The result: TEMU attracts a varied customer base, built up through constant promotions and shopatainment.

For specialist brands, the threat is clear: reduced margins in the face of a price war, and a shift of customers to a hyper-aggressive player. In this context, it is urgent to adopt strategies to protect your margins and build customer loyalty.

The price war: margins under pressure

TEMU has unleashed an unprecedented price war. Jewelry for €1, electronics for €15: its rock-bottom prices, supported by optimized logistics, are putting specialist brands in a tricky position. To keep up with this trend, some are lowering their prices, jeopardizing their margins. But this strategy is rarely sustainable.

TEMU is setting a new standard: ultra-low prices that consumers perceive as acceptable, even for products of average quality. This dynamic complicates the task of premium brands, which must now justify their prices despite a differentiated offer. TEMU’s massive and omnipresent promotions amplify the pressure, further reducing competitors’ room for manoeuvre.

Rather than following TEMU in this spiral, it’s essential that brands focus on other levers: highlighting their unique assets (quality, durability) and using targeted campaigns to emphasize their added value to their consumers.

Putting customer loyalty to the test

TEMU doesn’t just seduce with its prices: it also turns customer loyalty on its head. Unlike Shein, which is mainly geared towards a young, female audience, TEMU attracts a varied clientele, balanced between men and women, and including generations X and B (born between 1965 and 2000). By playing on its product diversity and constant promotions, TEMU captures consumers who were previously loyal to specialist brands.

But the real innovation lies in its “shopatainment” strategy: mini-games, rewards, sponsorships… TEMU transforms the act of purchasing into a playful experience. These tactics don’t just attract new customers: they build loyalty by creating an emotional attachment to the platform.

For specialist brands, this double threat is critical. Unfaithful customers, attracted by low prices and constant entertainment, become harder to win back. It is therefore crucial to strengthen customer loyalty by enhancing what TEMU cannot offer: a close relationship, strong values (quality, ethics) and more personalized omnichannel shopping experiences.

Immediate action strategies for specialist brands

Faced with the TEMU threat, specialist brands need to react quickly to protect their margins and build customer loyalty. Here are three key areas of action for regaining ground:

1. Capitalize on your differentiating values

  • Ethical commitment: TEMU is often criticized for its environmental impact and questionable practices. Highlight your commitments (quality, sustainability, short circuits, made in France) to differentiate yourself.

  • Sincere communication: Tell your brand story, share your manufacturing processes and humanize your company to establish a relationship of trust with your consumers.

  • Concrete example: Launch campaigns around eco-responsible products or highlight your local impact to attract customers who are more sensitive to these values.

2. Invest in retail media to maximize your visibility

  • Targeted advertising on sales platforms: Optimize your advertising campaigns on your partners’ e-commerce platforms. Highlight your products in search results and rely on hyper-targeted advertising to reach the consumers most sensitive to your values.

  • In-store advertising space: Your physical points of sale are a strategic asset. Use them as advertising showcases: POP displays, digital screens or banners to boost the visibility of your products and encourage on-site purchases.

  • Why retail media? Unlike TEMU, which focuses on massive volumes, retail media allows you to address your targets directly, while maximizing your ROI through measurable actions.

3. Strengthen customer loyalty with personalized experiences

  • Attractive loyalty programs: Offer exclusive benefits or personalized discounts to encourage your regular customers to return, even when faced with ultra-competitive prices.

  • Omnichannel: Create a seamless experience between your stores and e-commerce platforms to meet the expectations of today’s consumers.

  • First-party data: Use information from your retail media and point-of-sale campaigns to understand your customers’ behavior and propose ultra-personalized offers that reinforce their attachment to your brand.

By acting on these three axes – targeted visibility, differentiation and loyalty – specialist brands can overcome the TEMU threat while protecting their margins and customer base.

Conclusion: TEMU, a threat or an opportunity?

TEMU has redefined the rules of the e-commerce game in France, putting specialist brands under pressure with rock-bottom prices and aggressive loyalty strategies. However, this situation is not inevitable.

Specialized brands have powerful levers at their disposal to fight back: capitalize on their values (quality, ethics, sustainability), optimize their visibility through retail media, and strengthen their customer relationships through loyalty programs and personalized experiences.

TEMU can be seen as an opportunity to reinvent oneself and reaffirm one’s difference in the marketplace. By adopting targeted strategies, brands can not only protect their margins, but also build lasting loyalty with customers who are ready to give preference to products that reflect their values and expectations.

So now, more than ever, is the time to act: turn the TEMU threat into a chance to stand out from the crowd!