Wolfgang Digital’s Research Reveals TEMU as Top Competitor for Irish Retailers.
With the giant Chinese online retailer TEMU facing mounting legal complaints within the EU, new research by the digital agency Wolfgang Digital has found that its presence in the Irish market has presented indigenous online retailers with considerable competitive challenges.
The Chinese online retailer is accused of “failing to protect consumers” and “using manipulative practices which are illegal under recent EU legislation”, according to BEUC, the European imbrella group for European consumer organisations.
TEMU, which has an estimated 75m monthly users in the EU, fails to provide crucial information to consumers about the seller of the products and is therefore unable to share whether the product meets EU product safety requirements, BEUC has argued. In addition, it also says that the online shopping platform also provides inadequate information about its recommender systems and how the different criteria it uses lead to certain products being proposed.
In addition, the online marketplace is rife with manipulative techniques – dark patterns – to get consumers to spend more than they might originally want to, or to complicate the process of closing down their account.
“Temu breaches the EU’s new online content law, the Digital Services Act, on all of the above points and must now be investigated by authorities,” it says.
The research by Wolfgang Digital found that TEMU competed directly wth 100% of Irish online retailers during Q4 by serving ads on Google for all relevant product searches.
The data collected by Wolfgang in Q4 2023 and analysed in Q1 2024 confirms what many in the industry had suspected – TEMU is aggressively targeting the Irish and all geographic markets by purchasing ads targeted at customers across a wide range of product categories from fashion to DIY, from electrical to furniture and everything in between.
“TEMU is now every online retailer’s competitor. The scale of the budgets available to TEMU is immense,” says Brendan Almack, managing director, Wolfgang Digital.
“It is reported that they spent €1.5bn on Google Ads alone last year. For context, the entire Irish advertising industry is estimated to be worth about that,” he says.
According to Almack, the short-term impact felt by Irish retailers investing in digital advertising, like Google Ads, is an increase in cost of these ads. “Retail CPCs increased by 4% in Q4 last year and TEMU’s buying power undoubtedly played a role here,” he says.
Wolfgang advises retailers that want to fight back against TEMU to invest in increasing the value gained from every single customer.
“TEMU is an acquisition machine with budgets that are difficult to compete with. However, customer acquisition is only one part of the e-commerce puzzle. Retaining that customer and increasing their shopping frequency is something in the control of all retailers. This means having a robust CRM strategy to increase customer value over the long term is crucial,” Almack says.
The Wolfgang analysis, based on over 200m sessions and €500m in revenue data from Google Analytics and ad platforms in Q4, highlights the evolving dynamics, challenges and opportunities to be exploited in the Irish retail online advertising market, he says.
