As I read through many of the business blogs, Subreddits, and forums that I go to for trends and insights into the online business scandals of the day, it has been quite hard to avoid discussions of eCommerce’s slow demise. These are nothing new, of course, with the same conversation being had with the particular unconquerable force of the day for as long as people have been trying to make their millions selling things online.
From Amazon to Wish, the conversation has always revolved around the question of “How can I possibly compete with a company that is clearly cheaper and larger than mine?”. Whilst it’s easy to focus on the dropshipping hopefuls who got sold the dream that they could retire on a fully automated job by the age of 30, there are many businesses out there that have felt the seismic ripples of a certain eCommerce juggernaut in the past year: Temu.
What is Temu?
Within 4 months of its launching, the Temu app was the most downloaded app in America for a time, and in 2023, it took the top spot as the most downloaded shopping app globally. This has raised a lot of questions about where Temu came from, and what its meteoric rise means in the eComm space.
Operated by China’s PDD Holdings, Temu is an enormous online eCommerce marketplace that follows a similar template to stores most of us are quite familiar with in the online shopping space such as AliExpress and Wish. What makes Temu stand out however is just how quickly it became a competitor to these comparable veterans. Whilst AliExpress and Wish have both been around since 2010, Temu was founded in 2022, which means that as of writing on the 14th of May, 2024, Temu hasn’t even celebrated its 2nd birthday.
As we can see from their data, between October of 2022 and now they went from nothing to keywords and estimated traffic in the tens of millions. This is not the kind of rise that can occur naturally and despite a drop around the time of the Google Core Algorithm Update, Temu’s almost 16 million keywords certainly make it a powerhouse above most websites’ wildest dreams. However, whilst organic search is a powerful space for them, it’s not what they’re known for in the marketing space.
Aggressive Search Engine Marketing Tactics Abound
For those who have noticed a drastic drop in their returns from Google Ads and PPC in general, this is likely a familiar sight:
No matter what industry you’re in, if you’re selling products, it’s likely that Temu has slipped in with an excessively aggressive Google Shopping campaign and concerningly affordable products to take up the top spots. It has gotten to the point that I’ve seen more than one exasperated online shopper look for answers on how to block their ads just because they’ve completely oversaturated every single market.
This has posed issues for a lot of larger companies and institutions as well, not just the little guys, and has also exposed an inevitable fact of Google’s ad system, which is that it is not here to provide the customer with quality. That’s not the job of Google Shopping, it’s meant to provide store owners with a way to pay for preferential placement on the search engine, but with platforms like Temu completely dominating the space with cheap and often inferior products, will Google’s ad system continue to see the success that it has?
The State of Search Ads
According to statistics from DemandSage released earlier this year:
- 41% of the users reported that they trust online ads.
- 94% of people skip over search ads.
- 90% of consumers say ads influence their purchase decisions.
There are many statistics released as part of this breakdown and we’d highly recommend going through them yourself. However, the overall outcomes of research like this tend to suggest that whilst advertising is still highly effective at influencing purchase decisions, the majority of people still don’t trust online ads. This isn’t to make a grand proclamation regarding the downfall of ads but rather to say that if people are having bad experiences with these ads, as Temu has developed somewhat of a reputation for, it may make people more hesitant to trust Google advertising in general.
So, with Google attempting to remove AI content from its search listings, it does make me wonder if we will see more competitive revisions to their Google advertising systems. It’s making them money in the short term, of course, but given that there are enough understandable criticisms of Google as a company to fill a Wiki and much of the news surrounding them is about whether the company is a monopoly, Google always needs to ensure that they find ways to stay on the good side of its users.
All of this does seem bad for those looking to make an honest living using search, but it doesn’t have to be. Rather, if we look over the past few years, we can start to see that this fight for your attention on low-quality, affordable products is nothing new.
Bonus: Did Temu Kill Dropshipping?
This question has been making the rounds lately and it felt important to bring up for the simple fact that dropshipping was the previous concern of many businesses looking to succeed online. The short answer is no, but only because dropshipping has already been dying a slow death since its peak in 2018. The lack of quality control, oversaturation of the market, and easy consumer access to sites like AliExpress meant that the dropshipping market shrunk considerably, with most that succeeded either getting in early or tying their dropshipped products to an already trusted brand.
How Temu comes into this picture is simple: They are at first glance the ultimate dropshipping site. Cheap products, millions of options to sort through, and in most cases, free shipping make them a highly competitive service, and one that would work well for drop shippers to take from. However, the proliferation of Temu in advertising has meant that anyone competing with Temu on Temu’s products is likely to get dwarfed, and even then, with Temu using their own branding on shipping, it’s easy for customers to see that they’ve been duped into paying someone they didn’t need to pay.
Additionally, we come back to Temu’s poor track record for quality control, which leads to a lot of refunds and issues for those looking to profit from their products. Dropshipping doesn’t allow for consistent quality management, and that means anyone building a brand off of dropshipping is going to run the risk of having their issues become yours.
So, What Do We Take From This?
It’s clear that over the past few years, eComm has been dominated by the same 4-5 platforms, and that it’s going to be hard for many people to compete. With that said, all is not lost, and it doesn’t mean you should be giving up on your digital marketing. Unique, high-quality products are still going to win out against products people know to be subpar and untrustworthy, and at the end of the day, your customers are unlikely to be swayed by a cheaper price if they know that you’re going to give them a better experience. So, focus on your eCommerce SEO and SEM, and if you need to ensure that you’re getting the most out of your Google Ads, consider working with a local SEM agency.
