Chinese 'low-cost' online marketplace Temu enters into Nigeria
Its entry could disrupt local players, yet raise questions about long-term economic impact.
If you live in Nigeria and spend some time on TikTok, you’ve probably come across Temu’s flashy ads promising ultra-affordable products and fast shipping.
Launched by PDD Holdings in 2022, the e-commerce platform is bringing its disruptive direct-from-manufacturer model to Africa’s largest economy with over 200 million people.
Temu isn’t just dipping its toes into the Nigerian market; it’s leveraging a playbook honed globally and, more recently, in South Africa. Earlier this year, the platform gained significant traction in South Africa by undercutting local players with rock-bottom prices and rapid delivery.
Emmanuel Oyedeji
This success paved the way for its foray into Nigerian, where Temu aims to capture a slice of a growing e-commerce market projected to hit $75 billion by 2025, according to the U.S. International Trade Administration.
Globally, Temu’s rise has been meteoric.
Reports from the Wall Street Journal reveal that it spent a staggering $2 billion on Facebook and Instagram ads in 2023 and continues to allocate $500 million quarterly for marketing. This strategy has fueled sales growth from $3 million in September 2022 to $400 million by April 2023. In the second half of 2023, Temu's gross merchandise volume was approximately $12.26 billion, up from $290 million in 2022.
Now, Temu is betting that its aggressive marketing, coupled with a direct-from-factory model, will resonate with Nigeria’s price-sensitive consumers.
However, Nigeria is not without its challenges. The country’s e-commerce space is fraught with logistical inefficiencies, mistrust of online platforms, and economic hurdles. Temu says it has partnered with local delivery firms like Flytexpress and Speedaf to navigate infrastructure gaps, while offering consumer trust measures such as DEKRA-certified cybersecurity, encrypted payment systems, and a 90-day money-back guarantee. These efforts aim to reassure wary Nigerian shoppers, but whether they’ll succeed remains to be seen.
Kelechi Edeh
Meanwhile, the competition is fierce. Local players like Jumia, with its stagnating 2 million-user base and a 13% year-over-year revenue decline in Q3 2024, face a direct challenge. AliExpress, already popular among Nigerians for its foreign goods, poses additional competition. But experts like Tekedia Capital’s Ndubuisi Ekekwe predict that Temu could overtake these players within six months if it replicates its global playbook effectively.
Yet, Temu’s entry isn’t without controversy. Critics warn of its potential impact on Nigeria’s foreign exchange reserves, as transactions funnel funds into international supply chains. Temu’s parent company, Pinduoduo, has also faced scrutiny over malware allegations and anti-competitive practices, raising ethical concerns.
In South Africa, Temu’s aggressive entry reshaped the e-commerce market. Its arrival, alongside Shein and Amazon, contributed to Takealot’s decision to sell its fashion arm, Superbalist, after struggling to compete with fast-fashion powerhouses. These developments underscore how global players can disrupt local markets—and Nigeria may be no different.
For Nigerian shoppers, Temu offers a tempting mix of affordability, local payment options, and convenience. However, the long-term implications for local players and the broader economy remain uncertain. Whether Temu can navigate Nigeria’s unique challenges and sustain its momentum will define its role in the evolution of African e-commerce.
