Temu, a Chinese-owned e-commerce platform, has entered Nigeria. The subsidiary of PDD Holdings, the Chinese e-commerce giant, is popular for its cheap consumer goods mostly shipped from China.
Headquartered in Boston, US where it launched in 2022, it has grown the time spent on its app to 22 minutes. Compared to Amazon with 11 minutes, the two-year-old e-commerce company boasts two times the 30-year-old’s numbers.
Temu has followed an aggressive marketing and expansion roadmap to grow its business to about 80 markets. After hitting European and Southeast Asian markets, the fast-growing e-commerce brand has set its sights on Nigeria, after expanding to South Africa in January 2024.
“We’ve noticed a rising demand for affordable and quality products, and we believe our factory-direct model will meet that need,” a Temu spokesperson shared with WeeTracker. “We’re committed to providing Nigerian consumers with a secure and trustworthy platform for online shopping.”
Temu will now compete with homegrown long-standing e-commerce brands like Jumia in the continent’s most populous nation.
How will Temu navigate the Nigerian market?
Temu’s low-cost model aligns with Nigeria’s economic climate, where rising inflation and a depreciating currency have made online shopping expensive.
In addition, the country’s logistics landscape is fraught with challenges. These challenges include an incomprehensive addressing system, poor road maintenance and limited accessibility to some towns. This deficient logistics infrastructure leads to inefficiencies in delivery and high costs which further alienate Nigerian shoppers.
Twelve-year-old Jumia, Africa’s leading online retailer, posted a 13% YoY revenue decline to $36.4 million in its last quarter’s result. While the number of orders grew to 5.9 million, the Gross Merchandise Value declined to $162.9 million. Thanks, in no small way, to the currency depreciation in Nigeria and Egypt.
The second area that saw growth, albeit modest, was the number of quarterly active customers which grew 1% YoY.
The US International Trade Administration projected the country’s e-commerce scene to reach $75 billion in revenue by 2025. This indicates that there is still room for another player.
Tailwinds like smartphone penetration continue to drive the sector. In 2018, 85% of customers who shopped on Jumia used a smartphone.
So, Temu should have no problem creating a space for itself in the market by focusing on non-consumption. This will drive customer acquisition and number of orders placed. But it will still have to grapple with currency depreciation when repatriating funds to its overseas parent.
For now, Temu is unperturbed and has partnered with local logistics firms—Flyt Express and Speedaf to get started.
Also, accepting payments in naira, like its Chinese counterpart AliExpress, will put it squarely in the crosshairs of Jumia. Following the news of Verve card and AliExpress partnership, an Interswitch executive told Condia that “Temu is next”.
