Expert Explains the Popularity of Chinese Marketplace Temu in Uzbekistan: It’s All About the Low Prices

Analyst Timurmalik Elmuratov discussed the reasons behind the incredible popularity of the Chinese marketplace Temu in Uzbekistan. According to him, the key factors are the genuinely low prices on products and massive advertising budgets dedicated to targeted ads on Instagram and TikTok.

«You’ve probably heard of Temu — a Chinese marketplace with incredibly low prices. It’s a relatively new company, founded only in 2022. However, in just two years, the platform has grown significantly, reaching dozens of new markets. Their approach is always the same — large amounts of money are invested in targeted advertising, primarily on social media platforms like Instagram and TikTok,» he noted.

Following the same model, the marketplace expanded in the Czech Republic and South Korea, and in September 2024, it was Uzbekistan’s turn.

Temu’s Key Features

Temu has two distinctive features. First, its approach to marketing and advertising is so aggressive that it’s already being studied in professional circles. In 2023, the company spent $2 billion on advertising, and in 2024, this amount is expected to reach $6 billion — a colossal sum even by developed market standards.

But simply bombarding users with ads is not enough; the right messaging is essential. Temu emphasizes that “everything you buy elsewhere costs half as much with us.”

Second, the low prices. This is achieved through several factors. The first is the C2M (customer-to-manufacturer) business model, where the product is shipped directly from the manufacturer to the buyer through third-party providers, reducing logistics and warehousing costs.

The second is the company’s policy of intentionally losing money on each order by offering huge discounts to strengthen its market position. Additionally, Temu requires sellers to keep prices lower to stay competitive on the platform. If multiple sellers offer the same product, Temu only displays the one with the lowest price. And it works.

Since September 6, Temu ads have been actively appearing in Uzbekistan, and by September 8, the app had become the most downloaded in the country. The marketplace’s primary audience consists of users for whom price is the deciding factor, making Temu especially appealing to Uzbekistan’s market, where the average income is lower than in many other regions. Many of the products sold on Temu can indeed be found in local stores and bazaars but at a higher price.

Upcoming Regulation

Recently, the National Agency for Advanced Projects, which regulates e-commerce, described the situation with some foreign marketplaces in Uzbekistan as “a one-sided game.”

Most likely, they were referring to platforms like Temu, as companies like Wildberries and Ozon have established local entities, opened bank accounts, and accept payments through local banks. Uzbek residents can not only buy from these platforms but also sell their products. Aliexpress also has a legal entity and accepts payments through Uzcard and Humo.

In contrast, Temu lacks a presence in Uzbekistan and doesn’t accept payments through local systems. Therefore, the upcoming e-commerce regulatory reforms likely target platforms like Temu. The project may not face a ban, but changes are inevitable. We’ll have to wait and see what they will be.

The article may contain inaccuracies as it is translated by AI. For more details, please refer to the Russian version of the article. If you notice any inaccuracies, you can send corrections via the Telegram bot: Uzvaibik_bot.