Consumer Staples Author：Notrice Jun 11, 2024 06:20 PM (GMT+8)

On June 6, Pinduoduo’s(拼多多) cross-border e-commerce platform, Temu, officially launched in Brazil. Consumers can purchase a wide range of products on its website at competitive prices, including beauty products, clothing, jewelry, pet supplies, office supplies, electronics, and household appliances.

Temu

EqualOcean learned that Temu offers free delivery on all items and promises free returns within 90 days. To attract consumers, the platform launched limited-time flash sales with prices as low as BRL 1.99 on its first day, along with various discounts, including a promotion offering a BRL 50 discount on orders over BRL 400.

On the day before Temu’s launch in Brazil, the Brazilian Federal Senate passed a shirt tax bill, reinstating import taxes on small import items valued at less than USD 50. If approved and enacted by President Lula, Brazil will impose a 20% import tax on these items in addition to the existing 17% ICMS tax, affecting the goods sold by Temu.

In other countries, Temu has attracted a large number of young consumers through influencer marketing. The platform also encourages consumer engagement by offering more discounts through accumulating points and inviting new users. Research shows that the average time users spend on Temu is 22 minutes, compared to 11 minutes on Amazon and 12 minutes on Shein.

The marketing team at Brazilian financial company BTG noted in a report that although Temu’s influencer marketing strategy primarily targets young consumers, its low-price strategy and gamification features have also drawn the attention of many older users.

Since 2023, Temu has been conducting market research in preparation for entering the Brazilian market. In May of last year, the company received authorization from the Brazilian Federal Revenue Service and was included in the government’s tax incentive program (exempting import taxes on small import items valued at less than USD 50). Sources revealed that Temu anticipated the possibility of the federal government canceling this tax incentive, but this did not deter its determination to enter the Brazilian market.

Despite Brazil's retail market being smaller compared to China and the United States, it remains crucial for cross-border e-commerce platforms due to Brazilian consumers' strong interest in online goods priced lower than offline options. According to data from the Brazilian e-commerce association, Brazil's online shopping transactions reached BRL 185.7 billion  in 2023. Now, Temu will join Shein, Shopee, AliExpress(速卖通), and Amazon in further intensifying competition in the Brazilian retail market.