Recently, Temu, the cross-border e-commerce platform under Pinduoduo, made big news again in Europe!

They have officially opened up for local Spanish merchants to join.

From olive oil and handmade furniture to trendy toys, a batch of Spanish companies have quietly launched products on Temu, and the most impressive part is that logistics have been compressed to 7-10 days for delivery.

You know, in the past, Chinese sellers shipping to Spain would take at least half a month. Now, with local merchants entering the scene, Temu is clearly aiming to outcompete its rivals.

Image source: Internet

Spanish merchants collectively “on board”, Temu is playing for real this time

Open Temu’s Spain site, and you can already see many local brands featured on the homepage.

An Andalusian olive oil factory has priced its 500ml extra virgin olive oil at 9.99 euros, which is 2 euros cheaper than Carrefour; a Madrid furniture studio launched a 299-euro trending floating bed, directly competing with IKEA’s classic models.

Temu has indeed offered these “local king” merchants plenty of benefits, opening up a semi-managed model that allows them to handle logistics and after-sales themselves, while the platform provides traffic support. Essentially, merchants only need to prepare inventory, Temu brings in customers, and they split the earnings per order, even saving on warehousing fees.

But getting on board isn’t that easy. Temu has set two strict requirements: first, products must pass certifications like the IFS International Food Standard; second, product quality must be solid. In short, Temu doesn’t want to repeat the mistake of some platforms where “9.9 free shipping turns into 9.9 junk.”

Temu Spain site

Logistics speed up to 7 days, local warehouses to handle 80% of orders

Besides attracting local merchants, Temu is also investing heavily in logistics.

Currently, Spanish orders can be delivered in 7-10 days, thanks to deep cooperation with local logistics companies like Correos. Even more impressively, Temu’s local warehouses in Germany, France, the Netherlands, and Italy are already operational, and the Spanish warehouse is likely on the way.

According to Temu’s plan, in the future, 80% of European orders will be shipped directly from local warehouses. What does this mean? Suppose you buy an Italian merchant’s leather bag stored in a Spanish warehouse while in Barcelona—you could receive it the very next day.

Image source: retailtechinnovationhub

Small and medium merchants are thrilled, but big companies aren’t smiling

For local Spanish small and medium merchants, Temu’s move is simply a blessing.

But big companies are having headaches. The Spanish local e-commerce platform Wallapop, which focuses on second-hand goods and local transactions, now faces Temu’s low-priced new products entering the market, and young people might just turn to grab trendy toys for 9.9 euros.

Image source: Internet

Even AliExpress is feeling the pressure. Although both have Chinese backgrounds, Temu’s localization speed is clearly faster.

For consumers, the most direct benefit of Temu’s move can be summed up in two words: cheap prices.

After local merchants save on cross-border logistics costs, their pricing can be 20%-30% lower than traditional retailers. For example, Spaniards consume nearly 600 million liters of olive oil annually. If Temu can lower the average price by 1 euro, that’s a savings of 600 million euros a year. Not to mention those hybrid products with Chinese supply chains and local design, like Spanish-style woven bags shipped directly from German warehouses, priced at only half of ZARA’s.

Image source: Internet

European e-commerce is changing, Chinese model goes overseas again

Temu’s expansion in Europe is essentially a replication of Pinduoduo’s “encircling the cities from the countryside” strategy.

First, use low prices and subsidies to open up the market, then bind merchants with local warehouses and semi-managed models, and finally rely on scale effects to crush competitors.

This strategy has been proven in China, but whether it will succeed in Europe depends on whether localization can be achieved.