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Temu becomes a protagonist in Uruguay with a strong increase in purchases abroad
Wednesday, October 9, 2024 - 15:00
Fuente: Reuters

The Chinese store increases its share in the Uruguayan market through a strong online advertising campaign.

Temu's arrival in the Uruguayan market has led to a sharp rise in online purchases abroad. The Chinese company, available to operate in Uruguay since this year, seems to be changing the usual pattern of operations.

However, other players in the business say that its arrival – beyond boosting activity – will not lead to a transfer of users from other platforms and private couriers that offer better quality items and services.

In recent months, an increase in purchases of merchandise abroad via the Internet has begun to be noticed. One of the reasons was the slowdown in shopping tourism in Argentina that was observed in the first part of 2024 compared to a year ago.

The exchange rate was no longer attractive and a good part of consumption returned to the country after a long period of exodus to Buenos Aires. But that was not the only reason.

The Chinese store has been gaining ground among local consumers. In July, some users on social media commented that product delivery in Uruguay was becoming complicated and began to doubt the success of the platform.

Others replied that the reality was different: it was attracting more and more buyers. And this is supported by the data on international parcels recorded by the National Customs Directorate (DNA).

Between January and June 2024, 304,101 online purchases were made abroad, with a year-on-year growth of 17%. At that time, courier companies linked the increase to the reduction in the price gap with Argentina.

According to the latest data from DNA, in the first eight months of the year the number reached 488,018 operations compared to 357,105 in the same period of 2023. The year-on-year increase was 37%.

The difference is more noticeable when comparing the last two available months, July and August. In the first, 86,865 purchases abroad were recorded, with an increase of 66%.

In the second quarter, there were 96,313 operations, with an increase of 113%. In the two-month period, there were 183,178 operations, with an increase of 88% compared to the same two months last year.

The two-month daily average was 3,003 purchases, according to official data. However, the daily average for the eight months was considerably lower at 2,033 transactions. The figures show that the dynamism was marked by the preference of users for the Chinese online platform in recent months.

Temu's success is due to an intense advertising campaign. The company is responsible for delivering the items to Uruguayan Customs and the delivery is made by the Post Office. The agency assured that the increase in the number of shipments received has not affected the distribution work.

From the moment of purchase of the product until delivery to the customer's home, approximately 20 days pass. This is the period that Temu usually mentions at the time of making the transaction.

THE COURIERS AND TEMU

Private couriers are observing Temu's growth and defending the other sales channels they frequently use. But they are also clear that the arrival of the Asian giant has boosted the business of online shopping abroad.

Federico Nogueira, director of the courier company Gripper, told El Observador that the Chinese company was responsible for the growth seen in international parcel statistics so far this year.

"The massive reach achieved through advertising has led to growth in the overall cross-border e-commerce market, both in terms of sales and overall," he said.

A common practice is for users to make an initial purchase through Temu and then move on to other platforms that offer better quality products. “Temu has all white label products and they are generally of poor quality,” he added.

Gripper offers on its website the service of buying from Temu in Uruguay. “Although Temu is a very popular store, there are many options that may be superior in terms of product quality,” he says.

For Nogueira, it is difficult for Temu to attract customers who buy from other stores in the United States or China, such as Amazon, eBay, Walmart or Shein.

“They are different services. Platforms that have their added value in repeat purchases, customer service, automation. Temu is betting on bombarding with advertising until someone buys a product that is not a brand name,” he said.

In his view, the two types of purchases will continue to operate: one for lower quality and the other for branded and more specific items. “I don’t see any possibility of people moving to just one channel, they are very different from each other. The pie is growing; it’s not that people are going to Temu,” he said.

One of the options that Gripper (and the rest of the private couriers ) proposes is to purchase items in several stores, consolidate them in the United States and make a single shipment to Uruguay using the international parcel franchise.

TAX-FREE PURCHASES

The current franchise for online purchases abroad allows up to three per year for a value of up to US$ 200 per transaction. Operations cannot exceed 20 kilos per shipment and cannot be for commercial purposes. If the user meets these requirements, the products enter Uruguay exempt from import taxes.

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