Suddenly they were visible everywhere. First in the United States and soon after, Europe was also flooded with Temu’s packages. Temu seems to have emerged from nowhere, disrupting existing retail and customs clearance with millions of shipments. Behind the app full of gamification and rock-bottom prices, however, is a well-oiled machine that works fundamentally differently than we are used to in the West. An analysis of how Temu is restructuring the chain and why European regulations are already behind the times.

From saturated home market to global expansion

The driving force behind Temu is Pinduoduo. This parent company saw the light of day in 2016 and grew into a giant in China. According to experts like China Digital Tech Researcher Ed Sander, its aggressive expansion into the West, which began in the U.S. in 2022, is a direct result of saturation in its own home market. Where Chinese manufacturers produced on behalf of Western brands for decades, platforms like Temu now offer them the chance to cut out that middle layer entirely.

The C2M model: creating demand for production

The secret to low prices lies not only in cheap labor, but mainly in the Consumer-to-Manufacturer (C2M) model. In the traditional retail model, each link in the chain wants to make margin. Temu reverses this. Through the platform, demand is first created for a product, then offered to the manufacturer as a “guaranteed sale. The manufacturer then ships the items directly to the consumer. This limits cost items to production, marketing and transportation. Marketing tricks such as group purchases and coupons give consumers the feeling that they have a say in the price, even though these margins are fixed in advance.

A logistics operation of 4,000 tons per day

The scale at which this is happening is barely comprehensible. In the first six months of 2025, there were an average of 115.7 million monthly active users on the platform within the EU. This results in a huge flow of goods. It is estimated that Temu transports about four thousand tons of goods daily via air freight. Only competitor Shein exceeds this volume. This flow of packages puts enormous pressure on logistics infrastructure and customs. In 2024, a total of 4.6 billion low-value packages entered the EU via online platforms, double the previous year’s figure.

Anticipating the €150 limit

The European Union is watching this development with dismay. The intention is to accelerate the abolition of the import duty exemption for packages under 150 euros, which covers 91% of Chinese orders. This should ensure a level playing field and curb imports of unsafe products. Temu, however, is not waiting for these measures and is already adjusting its chain.

The company is rapidly making the shift from direct air freight to local warehousing. Shipping goods in bulk to Europe and storing them in local distribution centers in Germany, France and the Netherlands, among others, is changing the game. Temu thereby becomes less dependent on individual package imports and can shorten delivery times from several weeks to a few days. By the end of 2025, 80 percent of European sales are already expected to go through these local warehouses.

Asset-light strategy with heavy partners

Unlike Amazon, which is investing heavily in its own planes and vans, Temu remains “asset-light. They own hardly any physical infrastructure themselves. For logistics, they lean on partners such as 4PX, YunExpress and, remarkably, Cainiao, part of competitor Alibaba. The ‘last mile’ to consumers in Europe is often handled by established parties such as DHL, PostNL and local postal companies.

Conclusion: a lasting change

Temu’s strategy is not without controversy. There are concerns about sustainability due to the sheer volume of air cargo and product safety. Yet the company’s speed of adaptation commands respect. While the EU works on new customs rules, Temu has already transformed its logistics model. For European trading companies, the message is clear: competition no longer comes on price alone, but primarily on extreme agility and data-driven supply chain integration.