Have you ever stumbled upon a sale so good that it feels like you’re committing a brand new crime? Well, that’s precisely what’s happening over at Temu, the e-commerce sensation that’s taken the U.S. dollar store market by storm since its launch in September 2022. With a staggering 17% market share by December 2023, this platform is shaking up the shopping landscape and making everyone question, “Is that really as cheap as it looks?” Shoppers are not just finding products— they’re uncovering a world of massive discounts that play right into their psychology of savings, drawing them in like moths to a flame. But wait, is low pricing the only secret behind Temu’s rapid ascent? Spoiler: not quite. A crafty blend of savvy marketing and pricing strategies is also in the mix. So, let’s unpack why Temu’s discount-heavy approach is working wonders.
LEARN MORE.Temu sellers show massive discounts to boost perceived savings and win customers. The strategy is working.
Launched in September of 2022, Temu has grown rapidly. By December 2023, Temu had captured 17% of the U.S. dollar store market — Five Below, Dollar General, more — according to Reuters.
Certainly Temu’s prices are low. A recent comparison from Omnisend showed shoppers can often save 40% on Temu versus similar products on Amazon (but not Amazon Haul).
However, seller success on Temu relies as much on discount psychology as the savings.
Temu’s success relies in part on the psychology of discounts.
Cheap Headphones
Consider a hypothetical contract manufacturer that sells on Temu. Among the many products the company produces for various brands are noise-canceling, over-the-ear headphones that retail for $99.
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