The Temu Effect: Navigating E-commerce Disruption in Serbia
Because Serbia isn’t a member of the EU, the shipping fees, waiting periods, and related costs were too high for consumers. Temu came to an agreement with the Post of Serbia.
Highlights
The article examines Temu's impact on the Serbian market, especially on small businesses.
Read about the differences between Temu’s services and those of local businesses.
The article explores strategies for small businesses to survive.
In the face of the catastrophic global economic crisis and hyperinflation, it appears the Serbian market—that is, the customers—welcomed Temu with open hands. On the other hand, e-commerce doesn’t categorize the arrival of the Chinese gigant marketplace as healthy competition.
The Serbian small business community labels Temu the market killer. However, customers believe that Temu has simply ended dropshipping and prevented sellers from putting a high price tag on goods from China. Is the truth somewhere in the middle? This article will explore the Temu effect, its repercussions, and a potential survival kit for small businesses.
Temu’s Grand Entrance
Because Serbia isn’t a member of the EU, the shipping fees, waiting periods, and related costs were too high for consumers to even think about ordering from most foreign platforms. It took only a couple of months for Temu to turn this around and become one of the most talked-about e-commerce websites. Back in May of this year, Temu came to an agreement with the Post of Serbia, covering the shipping and delivery fees for all orders over ~$17.
Until Temu arrived on the Serbian market, customers relied heavily on a similar platform—AliExpress. However, the waiting period often lasted over a month, and instances of lost packages became more frequent. Temu circumvented this obstacle by providing a more reasonable delivery timeframe and delivering packages in approximately two weeks.
So, what’s the secret to Temu’s success in Serbia?
They covered the shipping fees for orders over the minimum required amount of only ~$17
Thanks to the agreement between the Hungarian Post and the Post of Serbia and improved logistics, the delivery timeframe is ~14 days
They offer a vast product selection and connect consumers directly to suppliers, also granting lower prices
They struck the Serbian market with an aggressive marketing campaign, launching paid ads all over social media and offering influencers discount codes they could benefit from
Are Small Businesses Rolling With the Punches?
Not necessarily. It is safe to say that businesses ordering their products from China do not enjoy the same logistics and ease of shipment as Temu. Naturally, with the higher shipping fees come the higher prices of products. Small businesses simply can’t offer the same range of products or affordability as Temu. If they were to match Temu’s prices, it is safe to say that these businesses would be far from profitable.
The owner of a popular small business in Serbia, Adja Accessorize, with over 100k followers on their primary Instagram account, took this issue to TikTok. In her viral video, she lists several issues she discovered when ordering from Temu.
She found that the shipping took longer than promised, around 3,5 weeks in her case. She then pointed out that the order is free of shipment fee only if you purchase products over ~$17, which can be inconvenient for users looking to order a single, more affordable item.
She also found that the images of the products she ordered were not genuine, concluding that the sunglasses she received lacked the characteristics portrayed on the website. Finally, she concluded that she believes Temu sells one of her original designs manufactured in Chinese factories.
However, most users in the comments disagreed with her review, stating that most orders usually arrive within two weeks. Moreover, they suggested that Serbian small businesses only disapprove of Temu’s expansion because they resell the same products at much higher prices.
The Silver Lining for Original Product Sellers
Businesses that don’t appear to be threatened by Temu’s growing popularity are those offering original, especially hand-crafted items. Obviously, the food industry is completely out of the picture, as the appreciation for homemade, organic, authentic Serbian food grows stronger by the day—this is something Temu couldn’t “endanger” either way.
Handmade items such as art, personalized gifts, and authentic products made from locally sourced, quality materials will always have a special place on the market. Woven toys that took hours of manual labor, handmade authentic clothes, or cutting boards crafted from the highest quality, locally sourced oak trees cannot be replaced by generic, mass-production items. (Take local businesses we interviewed, Bohochic Dreamer and Svemogucstvo, as prime examples.)
How can a small business survive the Temu wave? Uniqueness in products, brand presence, and marketing makes a difference. What Temu lacks is a personal, direct relationship with customers that smaller brands can build with their target audience, especially through social media or in-store interactions.
Final Thoughts
In conclusion, this is bad news for e-commerce businesses collaborating with Chinese suppliers who sell their products on the Temu marketplace. The ease and quickness of shipment, combined with low prices, is a scenario that is hard to turn around if you don’t have a loyal customer base and a unique market presence.
On the other hand, the battle for market supremacy continues as another Chinese giant, Shein, has entered the Serbian economy. The agreement reached in August of this year grants even better shipping conditions and a shorter waiting period for Shein customers. The question is no longer whether these Chinese companies will stick around but how Serbian businesses can stand out in an atmosphere of consumerism.