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Shopping app Temu uses TikTok’s strategy to remain #1 in the App Store • TechCrunch

Past, a shopping app from Chinese e-commerce giant Pinduoduo, is doing quite well as the number 1 app in the US app stores. The mobile shopping app reached the top spot on the US App Store in September and continued to hold a high position in the months that followed, including as the #1 free app on Google Play since December 29, 2022. More recently, Temu picked up January 3, it reclaimed the No. 1 position in the iOS App Store and hasn’t fallen since — even outpacing competitor Shein’s daily installs in the US.

Temu offers cheap factory-to-consumer goods and access to a wide variety of products, including fast fashion, and encourages users to share the app with friends in exchange for free products, which may explain some of the growth. However, it seems that the vast majority of new installs come from Temu’s marketing spend.

When TechCrunch reported on Temu’s rise in November, the app had just over 5 million installs in the US, according to data from app intelligence firm Sensor Tower, with the US being the largest market. Now the company says the app saw 5 million US installs in January alone, up 19% from 4.2 million in the previous 22 days from December 10 through December 31.

According to Sensor Tower estimates, Temu has managed to achieve a total of 19 million lifetime installs on the US App Store and Google Play, with more than 18 million from the US.

Due to the growth, Temu now surpasses rival Shein in terms of daily installs. In October, Temu averaged about 43,000 daily installs in the US, the company said, while Shein averaged about 62,000. In November, Temu’s average daily installs grew to 185,000 while Shein’s rose to 70,000 and last month Temu averaged 187,000 installs while Shein saw around 62,000.

The meteoric rise of the shopping app is a reminder of how the video entertainment platform TikTok became the most downloaded app in the world in 2021 after years of outrageous growth. The video app had been downloaded more than 2 billion times by 2020, including sister app Douyin in China, according to Sensor Tower. Combined, the TikTok apps have now reached 4.1 billion installs.

Like Temu, much of TikTok’s early growth was driven by marketing spending. The video app grew in the US and abroad by heavily leveraging Facebook’s proprietary advertising platforms, Instagram and Snapchat to gain its customers. TikTok was said to have done that $1 billion spent on advertising in 2018for example, even Snap’s largest advertiser that year.

By investing in user acquisition up front, TikTok was able to gain a following, which then enhanced its ability to personalize its For You feed with recommendations. Over time, this algorithm became very good at recognizing which videos would generate the most interest thanks to this investment, making TikTok one of the most addictive apps in terms of time use. As of 2020, kids and teens started spending more time watching TikTok than YouTube. And earlier this month Insider Intelligence data indicated that all TikTok users in the US now spend an average of almost 1 hour per day on the app (55.8 minutes), compared to just 47.5 minutes on YouTube, including YouTube TV.

While Temu is nowhere near TikTok’s skyrocketing numbers, it appears to be leveraging a similar growth strategy. The company invests heavily in advertising to acquire users, which it uses to personalize the shopping experience. In fact, one of the main features of Temu is its own kind of For You page that encourages users to browse “Selected for You” trending items. In addition to gamification elements, Temu also puts a lot of emphasis on recommending stores and products on its homepage, which is informed by its user data.

But the app’s growth doesn’t seem to be driven by social media. While the Temu hashtag (#temu) on TikTok is approaching 250 million views, that’s not really a remarkable number for an app as big as TikTok where something like #dogs has 120.5 billion views. (Or, for a more direct comparison, #shein has 48.3 billion views.) That suggests Temu’s rise isn’t necessarily driven by viral videos among Gen Z users or influencer marketing, but rather by more traditional digital advertising .

According to Meta’s ad libraryFor example, Temu placed about 8,800 advertisements on Meta’s various platforms this month. The ads promote Temu’s sales and extremely discounted items, such as $5 necklaces, $4 shirts, and $13 shoes, among others. These ads seem to work to boost Temu’s installs, making the app its No. 1 spot in the App Store’s “Top Free” charts, which are heavily influenced by, among other things, the number of downloads and download speed.

Of course, a large number of downloads does not necessarily mean that Temu’s app will maintain a large number of monthly active users. It also doesn’t mean those users won’t leave the app after their initial curiosity wears off. Still, Temu’s download growth led it to rank as the No. 1 “Breakout” shopping app by downloads in the US for 2022, according to data.ai’s year-end “State of Mobile” report. (Data.ai calculates “Breakout” apps in terms of year-over-year growth for iOS and Google Play.)

Because Temu’s growth is more recent, in this report the app failed to rank among the Top 10 apps in 2022, either in the US or globally in terms of downloads, consumer spend, or monthly active users. Instead, most of those spots still went to social media apps, streamers, and dating apps like Bumble and Tinder. The only retailer to find a spot on these lists was Amazon, the number 7 app worldwide by active users and the number 8 most downloaded in the US.

Temu’s marketing investment may not pay off as well as TikTok’s, as other discount buying apps saw similar growth only to later fail when consumers discovered that $2 shirts and jeans were actually too good to be true. Wish famously rumbled while consumers grew frustrated with long delivery times, fake listings, missing orders, poor customer service and other things consumers have come to expect from online retail in the age of Amazon.

Temu today has a 4.7 star rating on the US App Store, but those ratings have become less reliable over the years due to the ease with which companies get away with fake reviews. Dive further into the reviews and you’ll find similar complaints to Wish, including scam listings, damaged and delayed deliveries, incorrect orders, and lack of customer service. Without addressing these issues, Temu seems more likely to go the way of Wish, not TikTok, regardless of what it spends.

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