Can China's Temu win in the Nigerian e-commerce market? - Technology Times

Temu, a Chinese e-commerce platform under PDD Holdings, has entered the Nigerian market with aggressive marketing targeting Nigerians over popular social media platforms such as Facebook, TikTok, Snapchat, among others.

The platform known for its slogan “shop like a billionaire” aims to disrupt Nigeria’s e-commerce market dominated by Jumia, Konga, and Jiji with its model of low-cost, factory-direct products.

Founded in 2022, Temu has expanded its footprint beyond China, launching in markets such as the United States, Australia, New Zealand, and several European countries. In January 2024, Temu entered the South African market, marking its 49th international venture.

A smartphone user is seen using apps on the device. Image credit: Technology Times/Ayomide Badaru.

Nigeria, Temu's latest target, has a growing e-commerce sector valued at over $8.53 billion in 2024, and expected to reach $14.92 billion by 2029, according to data from Mordor Intelligence. This growth is fueled by a large population, increased internet penetration, and rising smartphone adoption.

Inside Temu foray in Nigeria

Temu has launched extensive marketing campaigns across popular social media platforms such as Facebook, TikTok and Snapchat to build brand awareness among Nigerian consumers.

Temu isn’t just another e-commerce platform. The Chinese e-commerce comes with advantages that already gives it an edge in Nigeria. For starters, the company’s ability to offer affordable goods directly from manufacturers may catch on with Nigeria’s price-sensitive shoppers. Added to that, Temu’s investments in marketing are big, according to reports , the company invests approximately $500 million quarterly in marketing and promotions globally.

The platform’s key strengths, as Temu itself points out, lie in its “ability to offer a wide selection of products, experience in managing complex logistical supply chains, and Consumer-to-Manufacturing (“C2M”).”

In Nigeria, Temu has adjusted its minimum spend requirements multiple times, dropping from ₦50,000 to ₦40,000, and now to ₦25,000, as at the time of writing this report, making it easier for more shoppers to access its services. Flexible return policies, free shipping offers, and the acceptance of Nigerian cards for payments have also helped the platform gain traction.

Temu’s strategy is already positioning it as a direct competitor to already established players like Jumia.

Jumia, Nigeria’s biggest e-commerce platform is already facing increasing pressure. In Q3 2024, Jumia reported a 14% decline in revenue, amounting to $36.5 million, largely due to currency depreciation in markets like Nigeria and Egypt.

However, Temu’s expansion globally has raised some regulatory concerns. The platform faced suspension in Vietnam for missing the country’s deadline for registration and regulators in Indonesia have asked for the app to be removed from Google Play store and Apple App Store to protect local businesses.

Temu official logo. Image Credit: Temu

Francis Dufay, Group CEO of Jumia, outlined the company’s strategic adjustments to address these challenges. Jumia has closed operations in South Africa and Tunisia, shifting its focus to larger, more promising markets like Nigeria. According to the brand, these closures aim to reallocate resources and streamline operations.

Temu's entry presents a new challenge for Jumia. The platform’s wide range of products, competitive pricing, and seamless shopping experience make it a strong competitor in a market increasingly driven by affordability and convenience. While Temu is new to Nigeria, its aggressive marketing strategy signals its intent to dominate the market.

However, Temu’s expansion globally has raised some regulatory concerns. The platform faced suspension in Vietnam for missing the country’s deadline for registration and regulators in Indonesia have asked for the app to be removed from Google Play store and Apple App Store to protect local businesses.