How to Adapt to Temu in Australia
You may have noticed an unfamiliar brand called Temu popping up in search and social media. The new online marketplace launched in Australia in April and is already the eighth-largest online retail brand in terms of audience. Retail marketers will need to pay attention to the fierce online competitor with low prices and quick factory-to-consumer turnaround, similar to Amazon and Shein.
What is Temu?
Temu was one of the most downloaded free apps on both the App Store and Google Play in the US late last year. Against a backdrop of rising inflation, the shopping app offers record-low prices and has stolen the thunder from the likes of TikTok, YouTube, and Instagram.
Beyond offering steep discounts and fast factory-to-consumer turnaround, Temu also gives freebies and benefits to customers who promote the app on their social networks, encouraging friends and family to sign up.
Its global expansion has also extended into Australia. According to recent figures from Ipsos, the online marketplace was the fastest-growing retail brand in Australia in June, experiencing a 14.2 per cent increase (to 9.2 million) in the number of Australians using its website or app. Having launched in April, it has already become the eighth-largest online retail brand.
Temu also appears to be spending big on paid search in Australia. It’s beginning to appear in the ad space for a wide variety of shopping searches in a huge number of categories, including clothing, beauty, and electronics.
The impact of Temu on retailers.
When a new advertiser enters the landscape with budgets that dominate, the game changes for everyone else. Although the internet seems like an infinite expanse, there are limited advertising spots and it becomes harder to find a place in front of the right audience. Costs rise and budgets don't seem to stretch as far as they used to.
Temu is launching thousands of products a day and 88 per cent of retailers are already struggling to compete with the challenge they are facing from online marketplaces. In response, online retail brands need to prepare for acquisition costs and competition to increase further.
How to adapt to Temu in Australia:
Focus on high-impact creative.
Temu plans to spend $1.4 billion on US advertising this year and $4.3 billion next year in order to break into the US market and compete with established eCommerce giants like Amazon. When you’re fighting a David and Goliath battle like this, then it’s important to focus on your brand.
Creative is the advertising element with the biggest influence on sales and if you’re up against online marketplaces like Temu, which can spend big and maximise ad impression share, you’ve got to make sure your creative cuts through.
Marketing is about creating memories and driving future actions. So, rather than getting caught up in a price war, it’s time need to go back to the basics of your brand. Remember why your customers need it and promote your value proposition creatively.
You can tailor your campaigns to reach niche market segments where there is less competition and continuously test and measure. That way, you’ll be in a better position to produce creative assets that resonate - all the time. The rise of social search is also giving retail brands with smaller organic and paid search budgets the opportunity to be discovered on other platforms where creativity is the competitive lever.
Prepare to use your budgets fluidly.
Retailers with big budgets often have aggressive customer acquisition strategies. That means, that they are prepared to spend big on major retail events. EOFY sales, Black Friday, Cyber Weekends, and Boxing Day are renowned for bringing shoppers online, and retailers like Temu are willing to pay for their place in front of potential new customers.
If you delve into your Auction Insights in Google Ads, it’s likely that you will find these brands maxing out their impression share during these key periods. So, when planning the marketing budget, it’s important to factor in these retail events. Decide on your strategy in advance, but be prepared to adapt to the competition. Your team should be ready to take some extra budget out of the piggy bank to support campaigns where it makes sense.
Hone in on your data.
Online retail giants can take a loss in order to capture market share. In the face of prices that are difficult to refuse, other retail marketers have to utilise their data and understand their market. Without the biggest budget on the block, it’s important to create a marketing feedback loop, which takes the guesswork out of campaign strategy.
Each marketing platform can offer a wealth of insights. For example, Google Ads can reveal the search terms that the market uses. It can also help you identify highly specific, less competitive search terms that your customers are likely to use. This can be a more cost-effective option than trying to compete against the big players for broad terms. You can also check out your search term reports to discover new search terms that offer a first-mover advantage.
High-performing paid social campaigns can also offer insights into the creative assets and messages that resonate. Structured the right way, they can highlight audiences and targeting techniques that bring lots of value to your brand.
Instil consumer confidence.
Are you concerned about Temu in Australia?
Consumers will always love a discount (especially when they are under financial pressure), but they don’t just look at price tags. Google research has shown that Australians are prioritising the quality of service and reliability of products. Google searches for “most popular” are still higher than those for “most affordable”.
So, take a deep breath. There is still space to leverage your brand and data to reach the right people.