The low-cost marketplace is actively competing with companies in various countries, including South Africa with its potentially the largest e-commerce market in Africa.
Temu (owned by and operated by Chinese PDD Holdings) launched its website in South Africa in January and has grown rapidly — its mobile app already ranks in the top three for free apps on the Apple App Store and Google Play Store.
Temu made South Africa the 49th country in which it operates as it seeks to expand its dominance to other markets. It has rapidly expanded around the globe, expanding to the United States in September 2022 and quickly becoming the most frequently downloaded app in the US in 2023.
Temu tops the most downloaded free app charts in some European countries, including the UK, and became the most downloaded free shopping app in Japan and South Korea within months of being launched.
In the U.S., Temu competes vigorously with Amazon, blowing millions of dollars on marketing and ads. The company bought airtime for three commercials during the Super Bowl — the final game of the American soccer competition — and two afterward. Temu's Super Bowl commercial contained the tagline "Shop Like a Billionaire." In it, the cartoon protagonist buys a variety of home goods and clothing for under $10.
In South Africa, the Chinese e-commerce marketplace faces stiff competition from local companies such as Superbalist, Bash, Jumia, Bodorbuy and its compatriot, Shein. South African internet giant Naspers has also announced an increased investment in its e-commerce platform Takealot ahead of Amazon's entry into the country.
Temu has fiercely competed with Shein worldwide, using low prices to compete against more established players. This running battle has even resulted in several lawsuits between the companies in the past couple of years.
The battle will continue in South Africa, as Temu has staked its claim on the market and wants to be the cheapest e-commerce marketplace available. Most of its product prices range from 10 Rand to 300 Rand (approximately ＄0.5-16), which gives it a certain price advantage compared to other local e-commerce platforms. Temu is using its popular coupon discount and free shipping services.
Temu’s launch in South Africa and Amazon’s entrance later this year show that the country’s e-commerce market is poised for significant growth in the coming years, experts say.
South Africa’s e-commerce market lags that of other emerging markets, making up less than 5% of total retail sales. Bob Group managing director Andy Higgins said e-commerce sales in the country are worth around R70 billion compared to R1.4 trillion in total retail revenue.
According to data from Datareportal, as of the beginning of last year, over 70% of people in South Africa use the internet, with many of them being young people. It is estimated that by 2025, there will be 33.4 million e-commerce users in South Africa, with an e-commerce penetration rate of 53.1%, making it potentially the largest e-commerce market in Africa.
Source: Mybroadband
