Temu's "local-to-local" model, a divisive strategy

The Chinese e-commerce giant Temu recently introduced its "local-to-local" model in Switzerland, which has already been tested abroad and allows local retailers and entrepreneurs to sell their products on the platform. However, Michael Gibbert, Full Professor of Marketing at the Faculty of Communication, Culture and Society at USI, warns of the risks involved in this operation.

Temu has recently introduced a new channel that enables Swiss sellers to offer their products directly online, resulting in faster delivery times and lower costs. This initiative is designed to enhance the visibility of quality local products on the platform by shortening supply chains. Additionally, it aims to make the marketplace more competitive regarding delivery times for goods from China, which are often perceived as being too lengthy. The launch comes at a complex time for Temu, with possible new customs duties in Europe and the United States, and an investigation by the European Commission into alleged violations of the Digital Service Act on product safety.

According to Professor Michael Gibbert, Temu's offer is more of an advantage for the Chinese company than for Swiss sellers: "We are encountering a classic Trojan horse situation. Temu's business model eliminates all intermediaries, which raises the question of why a Swiss intermediary would choose to partner with this Chinese giant. This is particularly concerning for small producers who already have their own in-house distribution in place." In his opinion, even small producers would have little to gain from this collaboration: "If I were a farmer in Graubünden, for example, I would not certainly go to Temu to distribute my products. Firstly, because I would not have enough products to sell, and secondly, because I would not have an interest in being on the same platform as products imported from China."

According to Gibbert, the primary benefit lies with Temu itself: "It is certainly very advantageous for them, especially in terms of enhancing their reputation, which is currently undermined by the sale of low-cost items. Including products labelled 'Made in Switzerland' or 'Swiss Distributed' in their catalogue is crucial; for Temu, it would serve as a badge of honour."

The full article, including the interview with Prof. Gibbert, is available on the Corriere del Ticino website here. (Italian only)