Chinese e-com platform Temu under fire for aggressive marketing

Seoul, Feb 20: Chinese online shopping platform Temu came under fire for its aggressive marketing tactics to lure customers in South Korea, industry sources said on Tuesday.

The direct purchase app, run by Chinese company PDD Holdings, has emerged as one of the popular shopping destinations for budget-conscious Korean consumers by giving away free gifts and credits, which can be used as cash.

The marketing tactics include discounts of up to 90 percent, free one-time returns within 90 days after purchase and rewards of up to hundreds of thousands of won, reports Yonhap news agency.

To gain the credits and freebies, Temu's existing subscribers are required to invite their friends through the app's refer-a-friend program.

Both existing and new subscribers can participate in daily reward events but they have to invite at least seven friends for the "first compensation," which means credits, and up to 60 friends to receive advertised freebies.

Temu made inroads into Korea in July last year to compete with its bigger Chinese rival AliExpress launched here in 2018.

Young Korean consumers in their 20s and 30s have posted their unboxing photos or videos of products purchased through the Temu app on YouTube and other social networks for more clicks and more subscribers, which bring them high profits.

The number of Korean subscribers for the Temu app jumped more than tenfold to 5.7 million in January from 520,000 in August last year, according to mobile market research firm WiseApp.

PDD's Temu and Alibaba's AliExpress have strengthened their presence in Korea with unbeatable low prices for their products and unrivaled marketing despite longer delivery times and unstable product quality.