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In China, most consumers have been immune to the "cut and kill" mode of Pinduoduo, but in foreign countries, consumers have obviously not experienced such a shopping mode. With the slowdown of the epidemic, cross-border trade and e-commerce are developing at an astonishing speed. Temu has successfully replicated the social fission growth model by virtue of the marketing method similar to the parent company Pinduoduo.

Recently, many American users have received links from friends and family through WhatsApp, warmly inviting them to download the shopping software Temu. Friends will say, "If you download, I can get these things for free!" Then they will send a shopping screenshot.

(Image Source Network | Temu's Free Gift "Cut Order" Page)

Many American users have downloaded Temu under the guidance of their friends and found that the products on Temu are much cheaper than their usual Amazon. Therefore, they excitedly went underground and joined the army of "cutting a knife".

In addition to the mentality of trying, it is more out of the pursuit of discounts and benefits that Temu quickly gained popularity after its launch in the United States.

1、 Price competition among Pinduoduo, Amazon and Temu

In September of last year, Temu, a subsidiary of Pinduoduo, had already reached the top of the US App Store. This Chinese company's Boston branch has always held the top position in the download rankings.

(Image Source Network | As of June 3, 2023, Temu still ranks first on the Apple Store free list)

Some users want to compare prices of similar products among Pinduoduo, Amazon and Temu. On Pinduoduo, the price of a data line storage box is 4.99 yuan, while the price of a shipping company is 23 yuan/kg. Based on this calculation, the cost of shipping a storage box from China to the Bay Area may be around 8 yuan.

On Amazon, a similar data storage box is priced at $13.99, equivalent to approximately 99.12 yuan in Chinese yuan, which is more than ten times higher than the cost of shipping. On Temu, the price of the same storage box is $1.27, which is similar to the cost of shipping from China, and there are no restrictions such as "starting from ten kilograms".

(Image source network | from left to right are the data storage box sales pages of Pinduoduo, Temu and Amazon)

2、 Comparison between the Chinese and American markets: What are the differences in marketing strategies?

In fact, a long time ago, many Temu discount codes and download links could be found on social media platforms such as Twitter, TikTok, Facebook, and Instagram. Some people successfully cut orders and withdrew cash by inviting 25 friends, while others obtained a thermal printer for free by inviting 8 friends.

(On the social news forum Reddit of Tuyuan Network, there are many discount links on Temu)

Temu successfully copied the marketing method of Pinduoduo and achieved social fission growth. Of course, for Chinese users who are accustomed to the diverse marketing strategies of Chinese internet companies, Temu's gameplay does not have much novelty. However, for American users, one carousel after another and lottery events can be a bit addictive, with the vast majority of them spending their lunch break browsing Temu and figuring out how to make the most of these discounts.

The different reactions of Chinese and American users towards the same gameplay stem from the different marketing strategies commonly adopted by companies in China and the United States. According to an analysis report by AH Capital Management, L.L.C., a venture capital firm in Silicon Valley, many American startup consumer goods companies and venture capitalists are sensitive to the practice of relying on payment to grow users like Temu. In China, consumer companies, especially those that rely on AI recommendation algorithms, need to invest a large amount of marketing budget to start their business. These algorithm recommendations are not suitable for small user groups, therefore requiring a large amount of initial user data, and paying is one of the fastest ways to achieve this goal.

In addition to providing subsidies to users, Temu has also invested a significant amount of resources in advertising. According to Meta's advertising database data, in January 2023 alone, Temu placed approximately 8900 advertisements on Meta's various platforms, promoting a series of ultra-low discount products, such as $5 necklaces, $4 shirts, and $13 shoes.

In February, Temu also heavily aired a 30 second advertisement during the US Super Bowl, with the slogan "shop like a billionaire" deeply ingrained in people's hearts.

Temu, like most other shopping apps, provides a personalized shopping experience. In addition to including gamified elements, Temu places great emphasis on product recommendations on the homepage. Users often buy a lot of things while browsing shopping apps due to cheap prices, huge discounts, and coupons that need to be calculated.

For the current popular "cut a knife" game, some analysts believe that it is not easy to continue to promote, and may even face a series of risks such as invasion of privacy, consumer deception, induced marketing and Unfair competition. However, there are also some consumers who are optimistic about Temu, believing that since the company has launched such activities, it will naturally consider relevant risk factors.

MRT of Guangzhou Mingruixundong believes that Temu has succeeded in the United States by copying the social fission growth model of Pinduoduo. For consumers, Temu offers low-priced products and promotional activities, attracting a large number of users to participate. However, this marketing strategy faces some potential risks and controversies. American start-ups and investors are conservative about the pay based user growth model, and worry about possible privacy issues and Unfair competition. Nevertheless, Temu's success to some extent proves the effectiveness of this marketing model in specific markets and provides interesting insights into the differences in marketing strategies between Chinese and American companies.