Fact: Temu burst onto the e-commerce scene in 2022 with a winning combination of a wide selection of good-quality merchandise at low prices. The combination defied the conventional wisdom of a correlation between price and quality.
Can a newcomer like Temu really deliver good quality at near wholesale levels and provide a superstore-like product range? Turns out the answer is yes. Temu delivers good quality, great prices, and a lot of choices because of its Next-Gen Manufacturing model (NGM).
Learn how Boston-based Temu (NGM) helps manufacturers produce the right products at the right quantities at the right time and at the lowest costs by understanding consumer preferences, improving sales forecasting accuracy, and reducing waste through better planning.
But first, what is Temu and what does it mean?
What is the meaning of Temu?
Temu means “Team Up, Price Down.” The company’s name reflects its mission to deliver cost savings through achieving economies of scale. With a vast network of suppliers and fulfillment partners and a fast-growing pool of buyers, Temu is able to leverage the scale to secure better deals for consumers and deliver more sales for vendors, achieving a win-win.
How does Temu offer such affordable prices?
The answer can be found in Temu’s Next-Gen Manufacturing model, which connects manufacturers with consumers to optimize product design, sales forecasting, and logistics planning, resulting in at least 50% lower costs passed on to consumers as lower prices and a virtuous cycle that the more consumers shop and give feedback, the better and cheaper products they could enjoy.
Next-Gen Manufacturing is a groundbreaking process that is transforming the world of manufacturing. It represents a shift away from traditional manufacturing practices, which often rely on outdated methods that are not efficient and can lead to unnecessary waste, high costs, and poor-quality products. In contrast, Next-Gen Manufacturing is a customer-focused approach that leverages digital technology and e-commerce platforms to improve the entire manufacturing process, from design to delivery.
At the heart of Next-Gen Manufacturing is a commitment to meeting the needs and preferences of consumers. By gathering real-time feedback and insights on consumer behavior and preferences, manufacturers can create products that are tailored to the specific needs and desires of their target audience. This information is used to inform every aspect of the manufacturing process, including product design, production planning, inventory management, and logistics.
Next-Gen Manufacturing helps sellers to reduce the production cost, which could be passed onto consumers. It also incentivized consumers to offer more comments and insights as they get to enjoy low prices and more customized products to their needs. It is a win-win outcome that also helps the platform to grow at such a speed.
How timely insights into consumer preferences lower prices
Timely insights into consumer preferences can lead to lower prices for consumers in several ways. By gathering real-time insights on what customers want, manufacturers can tailor their production to meet specific consumer needs, reducing waste and improving efficiency. This means that with NGM, products are produced in the right quantities and only when they are needed, avoiding the costs associated with holding excess inventory.
Additionally, when manufacturers understand what customers want and need, they can create products that are more relevant and attractive to those customers. By using timely insights from NGM to create products that are more cost-effective, they can offer them at a lower price point to consumers, passing on the savings from increased efficiency to their customers.
Finally, timely insights into consumer preferences can help manufacturers to better predict demand for their products. This allows them to avoid overproduction, which can lead to unnecessary inventory costs. By producing only what customers want, when they want it, NGM helps manufacturers to avoid these costs and offer products at a lower price to consumers.
Temu’s NGM streamlines product development to last-mile delivery
Temu’s supply chain optimization involves leveraging its core competency in Next-Gen Manufacturing (NGM) system to streamline the entire process from product development to last-mile delivery. The NGM system allows manufacturers to take feedback from consumers directly through Temu’s online marketplace, enabling manufacturers to better understand consumer preferences and behaviors. This helps to optimize production by ensuring that manufacturers are producing the right products, in the right quantities, at the right time, and at the lowest costs.
One of the key advantages of Temu’s supply chain optimization is the ability to predict demand more accurately. With the NGM system, manufacturers can access real-time data on consumer preferences and shopping patterns, enabling them to better gauge demand and forecast sales. This helps manufacturers to avoid overproduction, reduce waste, and eliminate the costs associated with holding excess inventory. By producing only what is needed when it is needed, manufacturers can avoid costly inventory storage and transportation expenses.
Another benefit of Temu’s supply chain optimization is the ability to reduce marketing costs. By providing manufacturers with direct access to consumers, Temu eliminates the need for costly marketing campaigns that can add significant expenses to the production process. Manufacturers can leverage the insights gained through the NGM system to design products that are more relevant and attractive to customers. This helps to reduce the amount of unsold inventory that ends up in landfills and ultimately lowers the costs of production.
Finally, Temu’s supply chain optimization enables a more transparent process from design to delivery. By providing real-time insights into consumer preferences, Temu is able to improve communication and collaboration between manufacturers and consumers. This creates a more direct and predictable process that allows for more efficient production and lower costs.
Temu’s Next-Gen Manufacturing system and supply chain optimization are key to its ability to offer such affordable prices. By focusing on the customer and leveraging real-time insights into their preferences and behaviors, Temu’s NGM system enables manufacturers to produce the right products in the right quantities at the right time and at the lowest costs. This results in significant cost savings that are passed on to consumers in the form of more affordable prices. With a commitment to meeting the needs and desires of consumers, Temu’s supply chain optimization creates a more direct, efficient, and transparent process that benefits both manufacturers and consumers.