Earlier this week Minh Huong, a resident of Hanoi’s Thanh Xuan District, was enthralled by a social media post about the program.
When she clicked on the link in the post, installed the Temu app and signed up as an affiliate, she immediately received VND50,000 (US$2) to use to make purchases on the site.
If she shared her registration link and another person used it to create a new account on Temu, she would receive an additional VND150,000, which could increase if the person has a TikTok or YouTube channel with a large following.
She could also share links to products on the platform, and if someone makes a purchase using them, she will earn 30% of the sales she generated as commissions.
Temu also offers her a 20% commission on sales generated by affiliates she referred to the program.
Do Huu Hung, CEO of Accesstrade Vietnam, a platform that connects affiliates with businesses looking to promote their products, said Temu’s policy is “unprecedented” and highly competitive.
Its commission rates for newly registered buyers are higher than those offered under similar programs by other platforms such as Shopee, Lazada, and TikTok Shop, he noted.
As a result, Temu has been widely shared on social media and over 10,000 affiliate accounts have been created, he said.
But for affiliates to get their rewards, users who sign up using their links must make their first purchase within 60 days of registering.
Hung said the program has been carefully calculated and the high commission rates would go once the site has a substantial number of users.
Thanh Bobber, a marketing expert and founder of marketing firm UPG Agency, said Temu is competing for market share with other major e-commerce platforms, and the outcome of this competition would be determined by how much Temu is willing to spend and its rivals’ response.
“The goods on these platforms usually originate from the same source. So whichever platform offers more discount codes will attract customers.”
Nguyen Duy Vi, CEO of Buzi Agency, another marketing firm, expected traditional retailers and e-commerce sites to struggle to maintain market shares.
International platforms like Temu and Shein have the ability to roll out massive discounts and promotions to win consumers due to their global scale, optimized supply chains and lower logistics costs, he pointed out.
Concurring, Hung said Temu’s strategy has proven to be successful and it has surpassed Taobao to become the most used e-commerce site in China.
He expected it to go past Lazada and Tiki within a year to become the third biggest platform in Vietnam behind Shopee and Tiktok Shop.
Experts said the competition would benefit consumers as it brings them cheaper products, but could harm traditional retailers and online businesses in Vietnam if Temu only allows Chinese stores to sell on its platform.
Thai Minh, who has years of experience working in affiliate marketing in Hanoi, said as e-commerce sites in the market push for more promotions to compete with Temu, they might charge local online sellers higher fees to compensate for the additional costs.
Nonetheless, online sellers in Vietnam remain optimistic. Dung, who has been selling office supplies on a local site, said existing platforms have built a loyal customer base through their unique promotions.
Temu might also face challenges as it only accepts payments via credit card or Apple Pay while cash-on-delivery is a popular choice in Vietnam, he said.
Trang, who has been running stores on Shopee, Lazada and TikTok for three years, said Temu would need a lot of time and effort to build a rapport with Vietnamese consumers.
“Low prices alone are not enough to win consumers as they are becoming more informed and demanding better products and after-sales services.”
