China-backed shopping app that could unseat Kmart, Big W

A Chinese-backed shopping application launched in Australia and New Zealand last month, with speculation the platform could rival many Aussie retailers.

A new Chinese-backed shopping platform is attempting to break into the Australian market.

Temu launched in Australia and New Zealand on March 13, with the digital lifestyle platform offering free shipping and free returns for 90 days.

The platform has Chinese roots and is a subsidiary of PDD Holdings, and is trying to get a foothold in the Australian market through marketing on platforms such as YouTube.

The company also owns Pinduoduo, a social commerce platform in China that Google suspended from its Play Store after citing security concerns, with claims attention is now turning to Pinduoduo’s sister app Temu.

Temu launched in Australia and New Zealand on March 13. Picture: Alamy

Temu offers lifestyle and fashion products such as winter coats, compression gloves and hair clips at heavily discounted prices.

It is gaining popularity around the world – particularly in the United States.

According to Similar Web, globally, Temu had 67.6 million website visits in the month of March with the Australian market holding less than one per cent of that figure.

This is in comparison to Kmart which has 16.9 million visitors each month, according to an e-commerce guide, and Amazon Australia has an estimated 28.8 million vistors each month.

The app has also gained popularity in the United States with 33 million downloads since its launch, surging after it was advertised during the Super Bowl, according to AFP.

It is the second Chinese shopping app, beside Shein, to make a name for itself in the US market.

One 65-year-old customer said she had placed 20 orders using the platform since January on items such as craft supplies, jewellery and gifts.

Brian Walker, founder and CEO of Retail Doctor Group, told news.com.au that online based marketplaces such as Temu and Amazon are taking what places such as Big W and Kmart do a step further.

“Big W and Kmart are traditionally centred retailed that are bricks and mortar with increasing online presences and they integrate the two,” Mr Walker told news.com.au.

Brian Walker said Temu takes what traditional retailers like Kmart are doing to a new level. Picture: NCA NewsWire / Dean Martin

“This takes it a step further and is ultimately an app based data platform model that works on the idea of a manufacturer to consumer market model.

“But the value of the organisation comes from the value of its database.”

He said Temu and Amazon work on a more futuristic model compared to other retailers in Australia.

Mr Walker also added that in an increasingly global world there are cultural, political, social, cybersecurity and economic considerations that these new technologies bring with them.

Meanwhile, Australian Retailers Association CEO Paul Zahra told news.com.au: “Discount retailing is an enormous market, and a highly competitive space and hence, new entrants are always going to be enticed.

“With increasing cost-of-living pressures, many Australians will choose value-based discount products over more expensive brands.

“A key challenge within the discount retailing industry is low-priced products providing much lower margins – and so the focus is on achieving a high volume of sales.

“Another key challenge in the Australian market is implementing an efficient and affordable supply chain, where customers receive their products in a timely manner. Australia is particularly challenging with its enormous geographic territory, but much lower scale of population compared to many international markets.”

Originally published as China-backed shopping app that could unseat Kmart, Big W