In an era of consumer "advertising overload," businesses aiming for growth need not only to sell products but also to retain customers for longer periods. Digital engagement strategies and personalized experiences are becoming the new competitive weapons, and Temu is a prime example of this.

Who is Temu?

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

Temu's homepage interface

Temu's business model bypasses intermediaries, bringing products directly from small manufacturers/brands to consumers at low prices, and heavily investing in advertising.

In a short period of time, Temu has expanded to over 90 global markets and achieved hundreds of millions of monthly visits.

But what truly made Temu a breakthrough wasn't just the price, but how they used digital engagement and personalization to retain users, encourage repeat purchases, referrals, and brand awareness.

Context and Challenges

When Temu first entered the international market, they faced competition from e-commerce giants like Amazon, Shein, eBay, Shopify stores, etc. Price competition was necessary, but not enough to retain users in the long run.

One of the major challenges:

• Users can easily become overwhelmed by ads and switch to competitors if the experience isn't different.
• User behavior data is highly variable, requiring personalization within each session to maintain engagement.
• If the personalization system is slow and doesn't keep up with users' "on/off" behavior, they will leave quickly.

Temu realized that to "stay in the user's mind," they needed a system that delivered highly personalized content, offers, and gamification, all active within each interaction session.

Temu's strategy: Engagement + Personalization + Gamification

Personalization based on action and context.

Temu has built a powerful recommendation engine system: it analyzes user behavior (tapping, swiping, pausing, when to open the app), and personalizes content right within the user session.

For example, when users browse jewelry products, Temu will prioritize showing many similar designs in suggestions, related discount banners, or combining them with "flash deals" that match their preferences.

Gamification as a binding component

Temu employs gamification strategies: spin-the-wheel, in-app mini-games, daily challenges, and limited-use reward points.

Research shows that AI-integrated gamification policies significantly influence purchasing behavior, increasing impulse purchases and boosting app engagement.

Data advertising & viral marketing

Temu spends heavily on advertising (reportedly, it has spent 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 awareness.

Real-time feedback loop

In addition to personalization between sessions, Temu designed a feedback loop system within each session: if a user clicks on a particular product multiple times, the system immediately adjusts the suggestions for that session.

This ensures a consistently "seamless and relevant" experience, preventing users from getting bored midway through.

Outstanding results

• Temu's revenue increased from a few million USD in the initial phase to 635 million USD in May 2023 (according to the English version of the Case Study data) ( Omnichannel Customer Engagement Platform )
• Temu's user base grew dramatically: from approximately 5 million users in the initial phase to over 100 million users within a few months.
• Users also spend a high amount of time on the app: an average of approximately 23 minutes per week (compared to 18 minutes on Amazon).
• Strong advertising and high engagement helped Temu spread quickly, creating a social media buzz and increasing brand awareness.

Lessons for SMEs and small businesses in Vietnam

1. In-session personalization is very powerful; it's not just about sending emails later, but also about adjusting suggestions within the app/website as soon as the user interacts.

2. Gamification + small incentives can increase interaction; complex games aren't necessary, just a spinning wheel, daily check-in challenges, or simple mini-games.

3. Invest in advertising strategically and with data; spending a lot is not as important as spending wisely. Use your budget to test multiple scenarios and further optimize.

4. Design a fast feedback loop: if the user performs action A, the system immediately responds with relevant content B.

5. Create a viral user experience, encouraging users to share their "great deals" on social media, generating a social media effect.

See also: Revealing the business secrets that lead to success for entrepreneurs.

GTG CRM - An AI-integrated solution to help you achieve business breakthroughs.

Before you start tracking your customers' behavior, the first thing you need to do is find customers. GTG CRM will be the tool to help you attract and nurture customers effectively:

• Create SEO-optimized landing pages from GTG CRM's vast library of landing page templates to collect customer information, with AI support for content and image generation.
• GTG CRM's AI helps you create unlimited multi-channel posts, eliminating the worry of running out of ideas.
• Running Facebook and Google ads is easy with AI to attract customers, no specialized knowledge required.
• GTG CRM's CRM feature helps you automatically save customer information from multiple channels to a single platform.
• Communicate with customers across multiple channels from Zalo, Facebook, Gmail, Yahoo, Outlook, Twilio, and Whatsapp on a single interface.
• Build an automated customer care workflow with email, for example, sending congratulatory emails and special offers when new customers visit the store.
• AI Assistant is always ready to support you on your business journey, from suggesting content plans and keywords for advertising campaigns to identifying customers you need to care for, providing revenue reports, and monitoring social media posts, etc.

By “emulating” Temu’s approach of leveraging technology and AI, small businesses can develop their brands and advance further in their business journey.

Conclude

Temu isn't just a cheap platform – it's a lesson in leveraging AI and technology to achieve business breakthroughs. When you can get users to stay, interact, buy again, and share, growth will follow.

With GTG CRM, you have the tools to get started: Create posts, run ads, create landing pages to attract leads and nurture customers,... Try it free for 14 days now.