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Startup Story of TEMU by Seven Parallel Consulting | Case study of TEMU

This is the story behind the tremendous cost and vision of TEMU. Whether you shop there or not, this is a case study no one can miss.

Since 2022, if you go online, you will have noticed advertisements from a company called TEMU. The company’s advertisement is everywhere. These advertisements are not cheap. The company loses 1 billion dollars on annual bases, trying to capture market share in North America. What kind of founders and investors have the dare to do something like this? Today we will talk about the amazing founders and startup stories.

Chinese shopping app Temu launched in the United States last year to inflation-weary shoppers, offering rock-bottom prices on thousands of items shipped straight from China. It's now the No. 1 most-downloaded app in the U.S., but the marketing campaign that it used to get there wasn’t cheap and the company is expected to lose an estimated $500 million to $900 million this year. “They’re lighting money on fire,” e-commerce expert Juozas Kaziukėnas told us.

What kind of team and founders have the dare to do something like.

Behind TEMU is a legendary startup entrepreneur named Yongping Duan. He is considered the Warren Buffet of China. In fact, he should also be the Steve Jobs of China. Temu is founded by him and his team. It follows the successful model of Chinese company PDD, which marries group buying with games, and created a vertically integrated marketing experience and direct logistic from factory to consumer. PDD was founded by Yongping Duan and Colin Huang.

Yongping Duan is a self made heavy weight of Chinese industrialist. He was an electrical engineering major in 1977, and started to build electronics in 1982. He is a genius product innovator. His first product is a Nintendo like game console in 1982. It was a hot seller in China then. The company later made VCD and DVD players, as well as youth study computers, handheld consoles, and children’s smart watches. Almost everything his company made was a great commercial success.

The company, BBK in Shenzhen, later made smart phones under the brands of VIVO and OPPO. You would think the Chinese phone market is dominated by Apple, Xiaomi or Huawei. But you are wrong. In 2017, the combined OPPO and VIVO brand is only the second behind Samsung.

What made Duan great is that he cultivated a team of founders. His team mates are in charge of the brands he created, including VIVO, OPPO, BBk, and Pinduoduo.

Now let’s talk about the second mystery founder of TEMU, Colin Huang. He was a great engineering major in 1998, and quickly attracted attention from Microsoft and the founder of Netease, a Chinese internet company. He joined Google after graduating from the University of Wisconsin, and later joined Google China. However, he quickly got tired of corporate job and started to build startup companies. His first company OKU, sold 2.2 million dollars. He then started Pinhaohuo, which means “group buying of goodies”. The company sold fresh fruits on Wechat. He then merged Pinhaohuo and Pinduoduo in 2015, and the company went IPO in the United States in 2018.

Pinduoduo is a unique new age company. It built APPs that embed in Wechat and used the power of social networking to sell products directly from producers to consumers. Hence it was offering 90% discount on almost everything. TEMU is nothing but a latest replay of the playbook in the United States.

Whether you buy from TEMU or not, you should know that next time you see a TEMU ad on your computer screen. The company is driven by heavy capital, daring vision, and solid experience that is 60 years and billions of dollars in the making.


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