Temu: What we learned this week

Background

Often compared to a virtual dollar store, Temu is a Chinese discount e-commerce retailer that sells a wide range of products, from $2 plastic headphones to $200 couches. 

Started in 2022, Temu is arguably most famous for two things: its unusually cheap products, and the time it ran the same advertisement not one, not two, but five times during the 2024 Super Bowl (watch the ad).   

With about 292 million global monthly active users, the Amazon competitor was the most downloaded app on the Apple App Store in the US through 2024.

How It Started

Although Temu is based in Boston, its story starts in China with a company called Pinduoduo, which loosely translates to “bringing lots of people together” in English. 

In 2015, Pinduoduo launched as an e-commerce platform selling produce and food before expanding to home goods, gadgets, and more. Soon enough, Pinduoduo was competing with China’s other top e-commerce giants, Alibaba and JD.com, which both already operated separate businesses in overseas markets.

So in summer 2022, Pinduoduo CEO Colin Huang launched Temu. Today, the parent company of Pinduoduo and Temu is called PDD Holdings and is listed on the Nasdaq. Temu grew from zero to 100 million US users within just 18 months, which shocked many retail experts.

As of September 2025, PDD Holdings had a market cap of more than $180B. For context, Amazon’s was more than $2T at the time, and Walmart’s was more than $820B. 

Temu’s US user base and download numbers grew significantly after its initial “Shop Like a Billionaire” Super Bowl ad aired twice during the game in 2023. But after running another “Shop Like a Billionaire” ad in 2024’s big game, many criticized the ad’s messaging.

Business Model

On Temu, individual sellers list and promote their products, and Temu charges a commission rate of roughly 5% to 15%.

Temu is able to offer such cheap prices in part because it does not actually own any of the products it sells—the sellers who list their products on Temu maintain ownership instead. Other retailers often have to pay to store at least some percentage of their inventory in warehouses, and can suffer financially if they miscalculate consumer demand for their products. 

Plus, while Temu is based in the US, its products mainly come from distributors in China. It used to save money on import costs due to the de minimis exemption, which allowed packages valued at less than $800 to be imported duty-free. However, that ended for packages from China in May 2025 (Temu’s user base dropped by 48% following the exemption’s end). In 2022, for instance, clothing company Gap paid roughly $700M in import duties. Temu, on the other hand, paid nothing.

Temu also spends a lot on marketing, from the estimated tens of millions spent on its multiple Super Bowl ads per game over the years, to the referral bonuses of $100 or more that it offers users who refer others to the discount retailer. Some argue that the company is more focused on rapidly gaining market share than achieving profitability: As of 2024, Temu was losing an average of $30 per order. 

Experts have also analyzed Temu’s gamification strategies. On Temu, shoppers can also get discounts and other benefits through playing games (like one game where users help a tree grow, another where they spin a wheel to win, and more).

Controversy 

Temu has been under regulatory scrutiny in the US for allegedly violating consumer protection laws, deceptive trade practices, privacy violations, and more.  

Additionally, congressional investigations have identified an “extremely high risk” of forced labor in Temu’s supply chain that concerns products from the Xinjiang region of China, where forced labor and slavery are common for workers.

In partnership with Vero3

How Wyoming Will Become a Lithium Powerhouse

America needs 5X more lithium by 2035, but no new mines have opened since 1967. Meanwhile, current extraction methods are slow, waste tons of water, and emit loads of carbon.

So Vero3 devised a way to not only cleanly produce 9K tons of lithium, they’ll generate 2.3B gallons of clean water and permanently store 3M tons of carbon in the process – all from the same 14,000-acre Wyoming site. This first-of-its-kind project is already validated with $25M spent and projects $183M in annual revenue. It’s the kind of zero-waste, vertically integrated model legacy operators can’t match. 

Even better? Shares are now open to the public ahead of commercial trials and a targeted 2028 Nasdaq IPO. Get up to 14% Vero3 bonus stock as an early-stage investor while you can.*

Please support our sponsors!

Explore Temu

One Story We're Taking Stock In

Earlier this week, I listened to a podcast interview with Natasha Singer (a technology reporter for The New York Times) about a promise sold to students in the 2010s: Learn how to code, they were told, and you'll secure a well-paying job after graduation.

Fast-forward to today, and software engineering jobs aren't nearly as plentiful as those students might have expected. Between 2012 and 2024, the number of people graduating with computer science degrees roughly tripled. But now, roughly 7.5% of recent college grads who majored in computer engineering are unemployed, compared to just 3% of biology majors.

The "recommended reading" for the podcast episode included Singer's article below, which provides compelling portraits of those would-be tech workers trying to make ends meet elsewhere (and was the most interesting feature story I read all week). 

—Phoebe

> Big tech told kids to code. The jobs didn’t follow. (Listen)

> Goodbye, $165,000 tech jobs. Student coders seek work at Chipotle. (Read)

> 4.8% of recent college grads are unemployed versus 4.0% of all workers. (Data)

In partnership with Vero3

Wyoming Today, Nasdaq Tomorrow

Wyoming and Wall Street are worlds apart. But in Wyoming right now, one startup is grabbing $400B+ in combined markets by the horns and riding to a planned 2028 Nasdaq listing.

Meet Vero3. They can cleanly produce lithium, generate clean water, and permanently store carbon from one 14,000-acre Wyoming site. Now, they’re scaling this breakthrough to an estimated $183M in annual profits and public markets. Share in Vero3’s growth as an early-stage investor today and earn up to 14% bonus stock while you can.*

Please support our sponsors!

New in 1440 Business & Finance

This week, our team found themselves deep in a few internet rabbit holes—of the Business & Finance variety, of course. Below are a few of my favorites.

—Phoebe

> America's 20 most affordable lake towns.

> The average net worth number that Americans consider wealthy.

> How TikTok became one of the fastest-growing social platforms of all time.

> The difference between a Class A share and a Class B share.

> Entrepreneurial lessons from "Dungeons and Dragons."

> Median US salaries, charted by age group.

> How wealthy Americans are keeping car dealerships afloat.

> A wedding cost generator. 

> Why American teachers are paid so little.

> The history of Macy's, explained.

Other topics to explore:

Bankruptcy, Y Combinator, Hedge Funds, CDs, Bitcoin

Our Daily Digest: 
The 100% free, unbiased-as-humanly-possible news brief read by more than 4.5 million people.