In a 2018 letter to shareholders, Pinduoduo described itself as “not a traditional company.” At the time, the e-commerce landscape seemed fully established—a space where the major players were set, and the narrative appeared complete.
Yet, just five years later, Pinduoduo defied expectations, briefly surpassing Alibaba—long considered an unrivaled competitor—in market value. This unexpected rise can be attributed, in part, to its competitors’ initial disregard, which gave the fledgling platform a window to scale and innovate.
Now, Temu is racing ahead, following a similarly unorthodox path. Launched in September 2022, the platform initially flew under the radar, viewed by Amazon as a non-threat due to its distinct product range and pricing model. For a time, both companies carved out separate consumer bases, avoiding direct confrontation.
But Amazon began taking notice in early 2023. Around that time, Temu introduced a fully managed model that revolutionized cross-border e-commerce. The platform handled logistics, operations, marketing, pricing, and after-sales services on behalf of sellers, who only needed to ship their goods to domestic warehouses.
This model effectively removed barriers to entry, enabling manufacturers and inexperienced sellers—many without English proficiency—to tap into international markets. As one seller told 36Kr, selling on Temu was “like memorizing multiplication tables versus solving advanced calculus problems” when compared to Amazon.
Temu’s fully managed model quickly set off a wave of imitation among competitors. Platforms like AliExpress, Shopee, and TikTok Shop rolled out similar services. Even Amazon followed suit.
In September 2023, Amazon unveiled its own fully managed service, offering sellers the option to use Amazon Global Logistics for transporting products to regional warehouses, Amazon Warehousing and Distribution (AWD) for inventory management, and Fulfillment by Amazon (FBA) for order fulfillment. The goal: to streamline operations and counter Temu’s growing appeal.
George Stalk and Tom Hout, senior partners at Boston Consulting Group, highlight in their book Competing Against Time that in rapidly evolving markets, speed of response is critical. Delays in decision-making and execution are akin to slowing down in a race, allowing competitors to surge ahead.
Temu exemplified this principle with its direct mail service for small parcels, achieving nearly USD 20 billion in sales in 2023. During the same year, the platform attracted 467 million unique visitors, making it the world’s second-largest shopping platform after Amazon.
Temu’s meteoric rise has often drawn comparisons to Shein, with Temu publicly declaring its goal to surpass the fast-fashion giant. Internally, however, its ambitions stretch further: to outpace Amazon itself. This long-term vision became evident with the planned rollout of its semi-managed model in March 2024.
Under this model, sellers preship goods to overseas warehouses via sea freight, while order fulfillment and after-sales services are managed locally. This approach allows Temu to handle bulky products like furniture, sporting equipment, and electronics requiring specialized shipping.
The semi-managed model targets sellers with established overseas shipping capabilities, positioning Amazon’s top-performing sellers—experienced in logistics and warehousing—as Temu’s primary focus. Recruitment presentations openly outlined this strategy.
Initially, Amazon didn’t seem fazed by these efforts. The company assumed its sellers were merely using Temu to offload surplus inventory, without any intention of serious investment. However, as Temu’s sales surged, this perception shifted.
Sellers, drawn by Temu’s rapid growth, began viewing the platform as a credible avenue for business expansion. Kevin (pseudonym), operations manager for one of Amazon’s top 20 sellers, shared with 36Kr that his company’s sales on Temu could reach USD 10 million by 2025. By comparison, its Amazon sales totaled USD 30 million in 2024.
Unable to ignore the growing threat, Amazon launched countermeasures in 2024:
In June, Amazon initiated a discount store section on its main platform. This section specifically targeted generic items priced under USD 20 and weighing less than one pound, directly addressing Temu’s low-cost strategy.
In November, Amazon went a step further, unveiling Amazon Haul, a standalone sub-platform for budget-conscious shoppers. Amazon Haul, essentially Amazon’s version of Temu, is currently available only in the US and is limited to select invited sellers.
In December, reports emerged on social media suggesting Amazon was pressuring its top 20 sellers to choose between selling on Amazon or Temu. Speculation intensified when Anker, a prominent electronics brand, abruptly closed its Temu storefront in the US, adding weight to these claims.
Amazon quickly denied the allegations, stating it does not require sellers to sell exclusively on its platform. The company highlighted its support for sellers’ success across multiple platforms through programs like Amazon Multi-Channel Fulfillment (MCF), which allows sellers to set independent pricing and use optional tools to remain competitive.
Despite Amazon’s denial, sellers reported challenges stemming from its stringent pricing policies. Kevin (pseudonym), operations manager for one of Amazon’s top 20 sellers, revealed that Amazon’s systems flag products priced lower on Temu, making them unavailable for purchase on Amazon. Over 20 of Kevin’s product listings were affected, forcing him to delist those items from Temu to restore his Amazon sales.
This price monitoring approach is not new for Amazon. The company regularly scans platforms like Shein, Walmart, and Temu to enforce price parity, suspending sales or shutting down stores when violations are detected. However, in 2023, Amazon excluded Temu from this system due to its ultra-low pricing model, with many items under USD 10. The policy shifted when Temu’s semi-managed model gained traction, encouraging sellers to join without fear of price penalties. As a result, Kevin’s sales on Temu grew to USD 3–4 million within months.
Amazon’s resumed price monitoring marked a turning point, with its crackdown extending beyond the US to European markets. This aggressive stance mirrored tactics seen in China’s e-commerce battles, where platforms like Pinduoduo, JD.com, and Taobao often forced sellers into exclusivity.
For sellers, the competition between Amazon and Temu has introduced new complexities. With peak seasons for key product categories approaching, sellers like Kevin have already shipped significant inventory to the US, heightening risks if platform conflicts escalate. Some hope remains, as Anker’s products have recently reappeared on Temu. However, Kevin has temporarily delisted his Temu items to protect his Amazon business. Despite frustrations, he acknowledged Temu’s potential, noting that it has already become his company’s second largest sales channel after Amazon.
After two years of rapid growth, Temu now faces internal and external challenges beyond Amazon’s countermeasures. Externally, tariff policies could impact its operations. Internally, the platform must enhance profitability for sellers to retain them while recruiting more semi-managed participants. According to 36Kr, Temu has already approached nearly all potential sellers from Amazon within the past six months.
To address these challenges, Temu is testing new strategies. It is piloting a platform model that offers sellers greater autonomy, aiming to counter Amazon’s dominance. Simultaneously, Temu is internally trialing an advertising feature, currently limited to semi-managed sellers.
Additionally, Temu has introduced a new policy limiting merchants to two stores—one under the fully managed model and one under the semi-managed model. This move marks the end of an era when merchants could flood the platform with multiple storefronts, marking a shift toward refined operations.
All these developments signal a significant shift in Temu’s operational focus.The platform is evolving from its early focus on ultra-low prices to a model centered on refined operations and sustainable growth. After flourishing in a less structured environment, Temu must now adopt a more sophisticated approach to maintain its edge.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Li Xiaoxia for 36Kr.