Business
E-commerce: Chinese Temu upstages Jumia, Konga, other local firms
– Entices shoppers with massive discounts, free delivery, others
A fierce battle for the control of Nigeria’s lucrative e-commerce market is currently going on between new entrant, Temu, and Nigerian startups, Business Hallmark’s findings have revealed.
Within a short period of berthing in the country, the Chinese e-commerce giant has eaten deep into the market of local online-shopping firms like Konga, Jumia, Jiji, Netmart, PayPorte, Ajebomarket, Kara, Oyato and is currently threatening to upstage them.
Temu entered the Nigerian e-commerce market in November 2024 and has grown to be the most preferred marketplace of Nigerians and foreign residents through aggressive marketing, low pricing, and free delivery of goods to every part of the country.
According to data provided by Similar Web Limited, a global software development and data aggregation company specializing in web analytics, web traffic and digital performance, Temu is the most downloaded app in Nigeria on Google Play Store and Apple App Store in 2024 with over 500 million downloads.
Also, a BH survey indicates that Temu is currently responsible for fulfilling forty-five percent of all daily orders by Nigerian shoppers, followed by Jumia 21.4 percent and Konga 16.5 percent. The other fringe e-commerce firms account for the remaining 17.1 percent.
Like their counterparts abroad, Nigerian shoppers using Temu’s app have access to affordable products like electrical and electronic appliances, kitchen equipment, furniture, clothing, phones, laptops and computers, footwear and other products ordered directly from manufacturers in faraway China.
Shoppers on the Temu app have a chance of winning large discount of up to N300,000 by spinning a roulette board three times. They can then use the earned prize money to purchase products of their choice.
A shopper on the Temu app, who craved anonymity, informed our correspondent that he won N285,000 by spinning the prize wheel, which he used to purchase goods like cooking pots and blenders.
“I first thought it was a joke when I was introduced to Temu sometime last year. An excited family friend informed me that she purchased products worth over N300,000 on the platform with only N45,700 and that I should also try it out.
“My wife has been harping on getting a replacement for her old cooking pots. So, I decided to visit the site in December 2024 to check out the products they had on display.
“As a first time visitor, I was offered the chance of spinning the prize wheel and I won N250,000 worth coupon in three attempts.
“We then decided to start the search for the product. After an exhaustive search, we were able to find a good one costing N48,000 which we used our coupon to purchase.
“We also purchase other products to the full value of our prize money. But at checkout, I was requested to purchase goods worth, at least, N65,000 before I can claim the prize.
“I ended up paying only N65,000 for goods worth over N300,000. The company crowned it up by delivering the ordered goods to the given address eleven days later”, the shopper stated.
BH gathered that Temu is able to offer competitive prices to shoppers by placing orders directly from original manufacturers in China.
With this, the online shopping firm is able to bypass middlemen, who would have added their own margins, making its products to be cheaper.
Also, Temu is able to cut down transport/delivery costs, which would have been passed down to Nigerian shoppers with the engagement of Speedaf Express, a Chinese shipping, trucking, delivery and warehousing firm for the task.
Unlike Western-based delivery firms like UPS, DHL and American Express, whose rates are quite high, Speedaf, supported by the Chinese government, offers affordable delivery services.
BH checks revealed that Speedaf rate is about 40 percent lower than that of its competitors, an edge capitalized on by Temu to gain inroads into the Nigerian online retail market.
Apart from low prices and free delivery that have endeared the app to its teeming customers, another factor driving traffic to Temu is its 90-day money-back guarantee, unlike Jumia and Konga which have a 7-day return policy for faulty or damaged goods.
With the arrangement, a customer can return a faulty or damaged product at no cost with funds fully returned within 90 days.
However, despite its positives, ordering products from Temu comes with a major disadvantage: a long waiting period for ordered goods to be shipped and delivered.
BH checks revealed that it takes about 2 weeks for a product ordered on the company’s platform to be delivered, meaning a shopper, who urgently needed a product cannot afford the waiting period.
Sources attributed it to Temu’s business model of sourcing its products from China.
“You can’t have it all. Buyers complaining should have it at the back of their minds that these products are ordered from China and will need time to be packed and shipped to Nigeria.
“That is why the firm’s products are very cheap compared to the ones sourced locally from traders. The company is able to achieve this by buying directly from manufacturers, thereby bypassing middlemen. It is a case of winning some and losing some”, the expert explained.
Some shoppers, who spoke to BH in Lagos, said the coming of Temu had brought a new shopping experience with products affordability and convenience.
Temu’s entry, experts argue, marks a direct challenge to Nigeria’s leading e-commerce platforms, such as Jumia and Konga, which have long dominated the online shopping space.
In its last released financial report, Jumia reported a poor performance in Q3′ 2024 as a result of low customer base, which has been stuck at around 2 million users since 2023. According to the company, it recorded a 13 percent decline in year-over-year revenue for Q3 2024.
Jumia’s Q4′ 2024 is expected to be worse with the entry of Temu in November, which sparked an exodus of shoppers from the Nigerian e-commerce platform.
However, in response to Temu’s entry, Jumia has embarked on the expansion of its network of pickup centers aimed at reducing delivery costs.
Reacting to BH inquiries, Temu said through mail that it decided to establish a presence in Nigeria after spotting a growing consumer demand for quality and affordable products.
“We identified a growing consumer demand in Nigeria for quality and affordable products and are proud to introduce our direct-from-factory model to the market.
“Our goal is to provide a secure and trustworthy platform, where consumers can shop at ease for quality and affordable products”, the firm noted.
Also speaking, a brand strategist, Emenike Agu, said Temu’s foray into Nigeria is a calculated move to leverage a model that has disrupted markets across the world.
“By eliminating middlemen and offering factory-direct pricing, Temu has captivated price-sensitive consumers in the country”, Agu noted.