Indexbit-What is Temu? What we know about the e-commerce company with multiple Super Bowl ads

Confused about all of the Temu ads that played during this year's Super Bowl?Indexbit You're not alone.

Searches for e-commerce company Temu ‒ including the phrase "what is Temu" ‒ spiked after the company aired five commercials during and shortly after the game, each showing colorful animated characters purchasing goods for as little as 99 cents. A perky song played in the background as characters danced across the screen, promising viewers the chance to “shop like a billionaire.” 

“The commercial marks the highlight of a Super Bowl campaign that featured more than $15 million in coupons and giveaways,” Temu said in a statement cited by CNN.

A quick search on the platform’s website reveals jaw-dropping deals: $8 sneakers; $18 Airpod lookalikes; a $4 Stanley cup dupe.

But are the site's low prices worth it? Here’s what to know about Temu.

What is Temu?

Temu is an online discount marketplace that offers everything from t-shirts to garden hoses. The one thing all its products have in common? Low prices. The company says items are shipped directly from suppliers and manufacturers, which helps cut costs.

Temu launched in the U.S. in September 2022 and had more than 50 million monthly U.S. active users as of January, according to market intelligence firm Sensor Tower. That's up nearly 300% year-over-year.

The company works similarly to other e-commerce companies like Amazon, but shoppers can expect longer shipping times since goods are often shipped from China and other parts of the world.

Despite the lengthy shipping time and reportedly questionable quality of some of the products (Temu's Better Business Bureau rating sits at 2.5 out of 5 stars), Temu's app is among the most downloaded globally and in the U.S.

“Temu has completely captivated consumers over the course of last year,” according to a note from Sensor Tower. 

Driven by a “flashy” user interface and in-app games that promote discounts, the firm said Temu has “dominated consumer attention” compared to its rivals. Sensor Tower found Temu users spent an average of 23 minutes per week on the app in the fourth quarter compared with 18 minutes on Amazon and 22 minutes on eBay.  

"Temu’s value positioning, the gamification of its app, the increase in ad spend, its vast assortment and its close supplier relationships are what we believe is driving the company’s growth," Sensor Tower's note reads.

Is Temu legit?Cybersecurity expert warns it's not the bargain you want, coupon codes aside

What is Temu’s parent company?

Temu was founded in Boston, Massachusetts in 2022. Its parent company is PDD Holdings Inc., formerly Pinduoduo Inc., which is headquartered in Shanghai.

PDD’s stock price jumped 3.2% Monday, closing the day at $131.57. 

Is Temu safe to buy from?

PDD Holdings also owns Pinduoduo, a Chinese e-commerce company that has been accused of using code to bypass cellphone security settings to spy on other apps, read private messages and change settings.

PDD has rejected claims that its app contains malicious code.

Does Temu steal your information?

Temu’s website says the company collects various data, including:

• Contact information like email address and phone number.
• Purchase and search history.
• Location data and IP addresses.
• Social media profiles (if entered by user).
• Data from third-party sources.

A class-action lawsuit was filed last year accusing Temu of violating customer's privacy rights by collecting private data with "unscrupulous" methods, and cybersecurity experts have warned that using the app comes with risks.

An emailed statement from Temu said the company collects information to provide and enhance its products and services and noted that it is subject to "extensive" regulatory oversight as part of a Nasdaq-listed company with a market capitalization of $170 billion.

"At Temu, we prioritize the protection of privacy and are transparent about our data practices," the statement said.

Does Temu use forced labor?

Temu has been accused of skirting a U.S. ban against products made in China’s western province of Xinjiang, according to a 2023 report from Ultra Information Solutions, a global supply chain verification firm.  

The U.S. banned the importation of products from this region, citing abuses against the predominantly Muslim Uyghur population in Xinjiang.

Temu says the claims are "completely ungrounded."

"Our current standards and practices are no different from those of major U.S. e-commerce platforms, such as Amazon, eBay, and Etsy," the company said in an emailed statement.