Temu, an internet store, has entered New Zealand.
Should we worry about local retailers?
Pinduoduo, a Chinese e-commerce startup, debuted Temu in New Zealand in March after entering the US market in September. It sells inexpensive items.
It operates like AliExpress, Shein, and Wish, which have thousands of suppliers and no actual locations.
It also paid social media “influencers” to buy on Temu and publish an affiliate link.
The US Super Bowl advertised it.
Temu was popular, but First Retail Group managing director Chris Wilkinson wasn’t sure if its advertising had much of an impact on customers here.
“Temu product is largely unbranded and very much falls in the discretionary categories—the nice-to-haves—not must-haves,” he added.
“It’s popular, but I’m not sure whether it’s had the euphoric launch and response that it achieved in the US where it leveraged SuperBowl advertising to engage shoppers.”
Wilkinson called its persuasion of consumers to recommend friends and family a “differentiator” in the local market.
“Its marketing integrations with website and social media channels means that the brand will follow browsers wherever they travel on the internet—achieving dominant visibility and calls-to-action.”
He claimed each new large store affected retail and the NZ economy.
Wilkinson wanted to know if Temu charged GST on New Zealand transactions like Amazon and Book Depository, which would level the playing field.
Consumers will prioritize the lowest choice
“The big question is whether Temu and others in this space will create a tsunami of ‘tomorrow’s landfill’ as consumers buy lower-cost, quality, and often disposable goods, which very much goes against our need for a more circular economy,” he added.
Retail NZ CEO Greg Harford said large overseas websites like Temu challenged Kiwi shops because of their scale and price.
“New Zealand retailers are trying to compete with foreign websites by offering great service and good pricing on a variety of products.”
He repeated “shop local” since it had the greatest impact on the economy and was protected by New Zealand consumer legislation.
“We always advise customers to shop from brands they know and trust—and it’s good to know that, when buying from a business in NZ, you have the peace of mind of being covered by New Zealand consumer law; plus you’re dealing with local people and helping keep the economy going.”