In an era of “advertising overload”, businesses that want to grow need not only to sell, but also to retain customers longer. Strategy digital engagement and personalized experiences are the new competitive weapons and Temu is the best example of that.

Who is Temu?

Temu is an e-commerce platform budget marketplace launched in 2022, owned by PDD Holdings (China).

Temu's business model is to bypass the middleman, to bring products from small manufacturers/brands to consumers at low prices, and to invest heavily in advertising.

In just a short time, Temu has expanded to more than 90 global markets and reached hundreds of millions of visits per month.

But what makes Temu a breakthrough It's not just about price, it's about how they use it digital engagement & personalization to retain users, make them come back, refer friends and spread the brand.

Context and challenges

When Temu first entered the international market, they were up against e-commerce giants like Amazon, Shein, eBay, Shopify stores, … Competing on price is necessary, but not enough to keep users for long.

One of the big challenges:

• Users are easily "overfed" with advertising and switch to competitors if the experience is not different
• User behavior data is very variable dynamic, need to personalize right in the session to keep engagement
• If the personalization system is slow, not keeping up with the “on/off” behavior of the user, they will leave quickly.

Temu realized that to “stick in the user’s mind”, they needed a system that provides highly personalized content, offers, games/motivational tricks (gamification), active in each interaction session.

Temu’s strategy: Engagement + Personalization + Gamification

Personalization by action & context

Temu built a powerful recommendation engine: analyzing user behavior (click, swipe, stop viewing, open the app at any time), and personalize content during the session.

For example: When users browse jewelry products, Temu will prioritize showing similar models in the suggestions section, related discount banners, or combine “flash deals” to their preferences.

Gamification as an engagement component

Temu applies gamification tactics: Spin-the-wheel, in-app mini-games, daily challenges, limited-time bonus points.

Research shows that gamification policies combined with AI have a significant impact on purchasing behavior, increasing the number of purchases impulse, and increase engagement in the app.

Data-driven advertising & viral media

Temu spends heavily on advertising (reportedly spending over $5.17 billion on advertising since entering the US market).

They combine personalized advertising based on user behavior + strong remarketing + viral content (social proof, users sharing what they bought) to increase recognition.

Real-time feedback loops

More than just personalization between sessions, Temu designs the system feedback loops during a session: if a user clicks on a product of a type multiple times, the system immediately adjusts the suggestion during that session.

This keeps the experience “seamless and relevant”, preventing users from getting bored halfway through.

Outstanding results

• Temu from a few million USD in revenue in the initial stage to 635 million USD by May 2023 (according to English Case Study data) ( Omnichannel Customer Engagement Platform )
• Temu users increased sharply: from ~5 million users in the early stages to more than 100 million people after a few months
• Users' time on the app is also high: an average of ~23 minutes per week (compared to 18 minutes on Amazon)
• Strong advertising + high engagement helps Temu spread quickly, create social network effects and increase brand awareness

Lessons for SMEs & small businesses in Vietnam

  1. In-session personalization is very strong, not only send emails later, but also adjust suggestions right in the app/web as soon as the user interacts

  2. Gamification + small incentives can increase interaction, no need for complex games , just spin the wheel, daily check-in challenges, or simple mini-games

  3. Invest in advertising with tactics + data, spend a lot is not as good as spend right, use the budget to test many scenarios, optimize next

  4. Design a fast feedback loop, if the user does action A, the system immediately responds with appropriate content B

  5. Create viral users, encourage users to share "good price purchases" on social networks, create social network effects

See more: Revealing business secrets that make startups successful

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By "imitating" Temu to leverage technology and AI, small businesses can develop their brand and go further in their business journey.

Conclusion

Temu is not just a cheap platform - it is a lesson in how to exploit AI and technology to Breakthrough business. When you can "invite users to stay - interact - buy again - share", then growth will come.

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