How E-commerce Giant Temu Is Tackling Safety, Sustainability, and Security As It Scales

What happens when, only a year after the launch of an e-commerce platform, it becomes one of the top downloaded apps in the world, with customers in 40 countries and products spanning more than 250 categories? Things have to scale very quickly.

E-commerce app Temu launched in the U.S. in September 2022 and quickly got the world’s attention when it encouraged viewers to “Shop like a Billionaire” in a 2023 Super Bowl ad that has since surpassed 1 billion views. According to data from Sensor Tower, Temu saw a 47% increase in downloads and a 13% surge in daily active users on the day of the Super Bowl compared to just a day before its ad.

As orders grew quickly into the millions, the public had the unique experience of witnessing a company go from a disruptive startup to a viable competitor to global e-commerce giants, such as Amazon and Walmart, seemingly overnight. As a result, the world has had a front row seat as it works in real time to adapt its operations and processes to meet new demands.

From the outside, this has manifested in shifts to its logistics network to bring down delivery times and increase convenience, the strengthening of its security, the defense of its intellectual property against scammers, and large-scale efforts to educate U.S. consumers (and beyond) about its business and pricing model.   

Here’s a look at some of the different ways Temu is addressing the challenges that have come with this disproportionately fast growth, as well as additional insight into the company’s approach, provided by an official Temu spokesperson.

Temu is streamlining the traditional retail supply chain to lower costs for shoppers.

There has been no lack of speculation about how Temu is achieving such competitive (or low) pricing on quality goods. But after wading through theories about low-cost labor and instead looking directly at its business model, there’s a less conspiratorial explanation: Its low pricing is due to a sophisticated strategy rather than nefarious practices.

At the heart of its model is the removal of several cost centers characteristic of the traditional retail supply chain. For instance, by enabling consumers to buy directly from the factories that make the world’s products, it’s able to eliminate markup that comes from moving products around from factory to brand to store and warehouse to warehouse.

Asked why its prices were so low, Temu’s spokesperson simply answered, “The better question to ask is why prices everywhere else are so high.”

Temu is growing its network of local logistics partners to reduce delivery times.

Upon its launch, Temu deliveries often took up to 15 business days to reach consumers. To shorten this window, reduce its carbon footprint, and provide convenience for shoppers, Temu recently began expanding its global logistics network through its work with local delivery partners like Poste Italiane in Italy, CTT in the Iberian Peninsula, and Mail Alliance in Germany.

These partnerships will additionally introduce new self-pickup and easier return options. For example, through Poste Italian, Temu customers will now be able to pick up and drop off items at PIN code-enabled lockers at local stores. 

And with Mail Alliance, Temu’s network of delivery personnel has increased by 55,000, allowing it to quickly deliver large order volumes, even during high-demand periods.

Temu is shielding customers from imposter sites and scammers capitalizing on its U.S. growth.

A downside of being a high-profile retail marketplace is the surge in scammers trying to capitalize on their success. Major marketplaces like Amazon and Expedia, as well as brands like Nike, Adidas, and Northface, have all experienced the effects of these online imposters. Last year, Temu joined their ranks as scammers’ newest target.

The company identified more than 20 website domains that had created counterfeit apps, look-a-like online sites, fake coupon codes, and other false promotions — all in order to trick Temu’s would-be customers into shopping on their sites instead. When consumers unknowingly engaged with these fraudulent properties — and even went as far as placing orders with them–they inevitably didn’t receive their ordered items and failed to get customer service support for the missing orders.

This not only soured affected shoppers’ opinion of Temu, but it negatively impacted its reputation, as shoppers who falsely believed they were ordering from Temu voiced their poor experiences with the imposter sites in online complaints aimed at Temu.

Temu recently began a large-scale assault against these scammers, taking legal action to shut down the 20 most egregious imposters and shield future consumers from falling victim to them.

“Millions of consumers from around the world have benefited from shopping on Temu. It is important to shield them and future customers from being tricked by these online scams,” a Temu spokesperson added.

It’s putting its security to the ultimate test.

In addition to stopping the slew of look-a-like sites attempting to profit off of Temu’s intellectual property and consumer goodwill, the company has set out to prevent online hackers and scammers from gaining access to users’ data.

Temu recently teamed up with HackerOne to launch a new “Bug Bounty” program, which incentivizes ethical hackers to discover and report any security vulnerabilities the company didn’t previously know about. This might include unknown entry points and areas in its app that could compromise user data if discovered by the wrong people.

This approach has also been deployed by major companies, including Amazon, Google, Tesla, and Meta.

Additionally, the e-commerce marketplace has introduced two-factor authentication (2FA) to enhance the security of its website and mobile apps. This makes it significantly harder for unauthorized users to gain access to a user’s account, even if they have compromised the password.

So, what are the security concerns around Temu?

Temu isn’t the first and won’t be the last company to enter the U.S. and experience disproportionate scrutiny from regulators and organizations who are quick to speculate about ulterior motives for catering to U.S. consumers. The allegations against the company echo those previously faced by companies like TikTok, which was accused of being a “Trojan Horse for China” and working to collect U.S. citizens’ personal data for uses other than improving the shopping experience.

Alibaba also endured similar allegations and investigations into privacy and data concerns by virtue of being foreign and competing with U.S. businesses. However, when push came to shove, the link between these companies’ data practices and their home governments was never found.

Temu is challenging conventional retail wisdom–and giving retailers an excuse for poor performance.

On Black Friday 2023, Temu joined the ranks of Amazon, Walmart, and Target as one of the Top 10 fastest-growing multi-category retailers, with 4.3M website visits in a single day. 

According to SimilarWeb, only a year after launching in the US, Temu has already surpassed retailers like Nordstrom, Bloomingdales, and Sam’s Club with 84% YoY (year over year) growth, making it the fastest-growing multi-category retailer of any last year. By comparison, the second fastest-growing retailer, HSN.com, saw a 33% increase.

In late 2023, Modern Retail reported that a number of U.S. retailers had cited Temu’s low prices and impact on advertising costs as two of the reasons for their own lagging sales. In the article “The new scapegoats: Brands are blaming Temu & Shein for poor business performance,” the writer paraphrases conversations with sources, saying, “Businesses need to take responsibility for certain decisions and find the best way to pivot.”

Is Temu a data breach?

Temu’s data practices are similar to those of other U.S. tech giants. Temu publicly discloses which information its app gathers on the Apple App Store and on Google Play. The disclosure reveals that Temu’s data practices are no different from other apps like Amazon and Etsy. And notably, Temu collects data from fewer categories than its peers.

The e-commerce platform also offers users complete transparency into the permissions that it seeks, as well as data collected in the Privacy section of its website. If using the app, this information is available through “Settings.”

It’s a common practice for retailers to collect some consumer data in order to give shoppers the best experience possible, and the information Temu gathers is also for that purpose. The company only collects the data necessary to continually enhance the products and shopping experience presented to its users.

“Temu collects information with a clear and singular purpose: to provide and continually enhance our products and services for its users,” shared a Temu spokesperson.

Is Temu safe to use?

Temu is a safe application and e-commerce platform that meets the many measures and regulations employed by both Apple’s App Store and Google Play to ensure that any app available for download in their marketplaces is secure for users. Temu has gone through both stores rigorous security measures and not only passed, but in 2023, Temu also became the #1 downloaded free app on the Apple App Store.

Temu additionally offers all consumers access to its Purchase Protection Program with every order. This program guarantees shoppers their money back with a full refund if they return any items within 90 days of purchase. This program was put into effect by Temu to make shoppers feel more secure when purchasing products.

In just one year, Temu has grown exponentially, challenging other well-established retail marketplaces despite a number of lingering but familiar questions that tend to emerge when new players enter and disrupt the U.S. market.

Now in its second year, and with its second consecutive Super Bowl ad approaching, Temu is poised for continued growth — and better prepared for its place at the center of conversations.