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During the last half-receiver, Temu has become a bastion of the hunt for good deals for practically any type of imaginable product (even if the dubious quality Of these articles have done something of a meme). But despite its rocky pricing strategy, the change in economic wind and consumer habits begins to affect the retailer and its results. Now, TEMU is in difficulty, because increased competition and the increase in costs have buyers abandoning the mass online store.

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TEMU is struggling due to new prices.

The first years of the 2020s were nothing less than a golden era for TEMU.

By pushing a pricing diet "everything costs $ 5", the online retailer saw his customers rising roughly about 292 million Active monthly buyers from around the world in the second quarter of this year, reports Ainvest. He also saw the amount of his total goods sold to explode at $ 70.8 billion last year, which was an astonishing increase of 24,400% compared to 2022.

However, even such a strong increase does not make the company sheltered from economic seriousness . Earlier this summer, TEMU's parent company, PDD Holdings, reported that she had seen a 50% decrease in its daily users in May against March in the immediate wake of new prices imposed by the president Donald Trump ,, Reuters reported.

And the changes had a serious number on the results of the company. PDD Holdings said TEMU's profits had considerably dropped by 47% compared to the same quarter of last year, according to Ainvest. The company cited the newly imposed prices as a major contributor to change.

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Now TEMU faces a new competition from Amazon.

While the economic realities of the post-flower market sink, TEMU is faced with another important problem to retain its growth potential.

Last November, the mastodon of Amazon electronic commerce entered the space for the purchase of good deals with Amazon , a service imitating the low -cost low -quality market at low cost. Ramification carries goods at a price of $ 20 or less, the vast majority costing less than $ 10.

Amazon Haul succeeded from the start, declaring $ 155.7 billion in revenues in the first quarter of this year, as well as an operating income of $ 18.41 billion, reports Ainvest. The inventory is also similar to TEMU, with articles like $ 6.99 sunglasses, Bluetooth speakers of $ 19.99, $ 5.99 Exfoliant and male shorts for $ 12.87.

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Now TEMU tries to slow down costs.

To bypass the massive increase in prices following the elimination of the minimis price exemption on low -cost goods, TEMU Search for suppliers to the State.

However, the efforts of PDD Holdings for Sourne its products at the national level have struck something with an impasse, Financial time Reports. Namely, the company does not find anyone who can lower prices only its new competitor.

"We told them that they could not undermine Amazon with the same things, it must be materially different [products]," said a framework of a large third -party seller Financial time .

At the same time, PDD Holdings has decided to stem part of its astounding financial losses by stopping its advertisement in the United States, but although the company saves $ 1.4 billion on social networks compared to the previous year, the moment could be poorly suited given the entry of Amazon into the segment.

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TEMU faces significant obstacles in the years to come.

It is not only operations in the United States working against TEMU. Government regulators in the United States and the European Union are aimed at service.

On the American side, the Consumer Products Safety Commission (CPSC) said last September that it would be investigate (with its low-cost counterpart Shein) for potentially dangerous items, in particular "deadly baby and toddler products," CNN reported.

The move came after a Congress Commission called the two Chinese companies to have used operated work practices, an intellectual property and an exploitation of escape.

At the same time, the regulators are Cracked on the retailer . Recently, the European Commission said that the site presented "a high risk for EU consumers to meet illegal products," reports the Associated Press.

The latest statements are taking place after the international organization has launched an investigation to know if TEMU violated the Digital Services Act, which forces companies to protect users and their data. If he is tried responsible, PDD Holdings could be sentenced to a fine of up to six percent of his annual income, per AP.

Some experts point out that the short TEMU track is now shorter, mainly thanks to the deeper pockets of Amazon and a more rooted position on the American market. This probably means that the company will have to change its tactics.

"Unless PDD [Holdings] is ready to lose billions of dollars each year to gain market share in the next five years, it will have to be smarter", " Martin Heubel , a link between Amazon and the products of products, said Financial time .