Grappling with the worst inflation levels in 40 years, US consumers are trying to navigate rising prices made worse by supply chain disruptions, geopolitical conflict, and many other factors. Although experts are tentative to put official “recession” labels on the economy, many Americans are already adjusting their spending habits to prepare for the worst.
According to a recent Morning Consult study, two-thirds of consumers are worried about inflation and have taken proactive steps to curb their spending and save money. With essentials like electricity, water, gasoline, and food at the top of most households’ lists, retail items like clothing can feel out of reach.
However, there’s a secret in the retail industry that many consumers are unaware of: the extent of markups. When purchasing a brand-name item, whether it be a new shirt or a throw blanket, hefty markups are built into the final sticker price. Some markups in the retail space can be 50% or higher as brands pay for marketing, supply chain costs, and inventory. Those added costs get passed down the line, with consumers footing the bill.
Temu, a new online marketplace, made its debut in September 2022 with the mission to increase consumer access to quality goods at affordable prices.
As a sister company of Pinduoduo, Temu can utilize the supply chain and distribution channels that Pinduoduo has built up over the years. Both companies are under Nasdaq-listed PDD, the e-commerce group that serves close to 900 million consumers and works with more than 11 million suppliers. By reducing distribution costs, Temu is able to keep prices low.
Temu is not just a clothing retailer; instead, the site boasts 16 product categories including automotive products, office products, industrial products, electronics, pet supplies, and more.
On the site, shoppers can easily see the average price of each product in other retail settings and compare it to the price offered by Temu. Baby socks that normally sell for over $17.00 on other sites are going for $3.99 on Temu and a mobile phone holder for a vehicle that retails at $19.94 can be purchased for under $5.00.
With levels of economic uncertainty not seen since the 2008 financial crisis, many families are faced with the unenviable task of giving up things that make their lives happier and easier. By stripping out unnecessary costs through technology, Temu now makes it possible for people to have both.
