The American game of e-commerce, Chinese players in the game

Join the Game

It took Wang Hua ten years to gradually build a group of American warehousing networks from a small garage in Chicago. However, not long ago, he found himself in a dilemma with a 30,000-square-meter multi-story warehouse without any goods to ship.

Ten years ago, a high school classmate of Wang Hua asked if he could borrow his family's garage to store phone cases and help with shipping. At that time, Amazon could not accept all goods into its warehouses, and many items needed to be shipped by the sellers themselves. Wang Hua spent two hours a day helping with unpacking and shipping, earning over a hundred dollars. It was perhaps the golden age of cross-border e-commerce in China, with a large number of inexpensive products quickly entering the American market.

Just two months later, the garage was already full of phone cases waiting to be shipped. He and his friends had to find another place. Finally, considering that the US Postal Service required pick-ups from a storefront facing the street, he rented a suitable warehouse for $1,500 per month. At this point, Wang Hua was making tens of thousands of dollars in profit every month. Because almost any small product from China was cheaper in the US. As long as these high-cost-effective products could be brought to the US, anyone could participate in the cross-border e-commerce game.

More businesses in China or from China discovered the fertile ground of e-commerce on Amazon and began to flock in. However, many businesses that came in with enthusiasm left disappointed due to a lack of understanding of the US market. Furthermore, after the pandemic, as the cost of traffic on Amazon gradually increased, Amazon chose to raise its storage prices. By this time, things had changed significantly, and businesses needed to send their goods to Amazon's designated warehouses in advance before they could be listed. As a result, a large amount of inventory couldn't withstand Amazon's storage costs and became overstocked.

Relying solely on cheap prices was no longer enough to succeed on Amazon, especially since being too cheap could lead to losses. For most small products, if they couldn't be sold, sellers had to pay Amazon, and even bringing them back to China through Amazon incurred costs. Thus, Wang Hua's warehouse became the destination for these leftover goods, adding another stream of income for him.

Wang Hua thought TikTok would be the next fertile ground, so he prepared a new warehouse early last year. However, things didn't go as planned, as TikTok did not rise quickly in the US. In the end, only about 10% of his warehouse was used.

However, there was an advantage to running a warehouse business: if a customer's goods were suddenly in high demand, he would be the first to know. He asked a customer who started ordering in large quantities what platform they used, and the answer was: Temu. Wang Hua also wanted to give it a try. Temu needed merchants like Wang Hua with overseas warehouses, so its intermediaries were active on various platforms with overseas Chinese populations. Wang Hua easily found an intermediary on Xiaohongshu to connect with Temu. He also paid a deposit of 10,000 RMB to open a store on Temu.

The reason Temu eagerly sought people like Wang Hua was that it had transitioned from a "fully managed" model to a "fully managed + semi-managed" hybrid model.

In the "fully managed" model, merchants only needed to send their goods to Temu's warehouse in China, essentially becoming suppliers to Temu, and they didn't have to worry about the rest. Temu would take care of everything, including traffic, logistics, customs clearance, and storage, all the issues that cross-border merchants originally had to solve themselves. This presented an opportunity for many merchants with little cross-border experience Temu, as a rising star, does not have a well-established warehousing and logistics system in the United States like Amazon. Therefore, in its early days, it relied more on air freight for small and light items directly to the United States, which were then handed over to warehousing and logistics companies. On one hand, this means that Temu takes several times longer than Amazon to deliver goods, but 75% of American consumers are willing to pay extra to receive their products faster.

A corner grocery store may have lower prices than Walmart, but it can never surpass Walmart because the quality of goods and the variety of choices are not sufficient. Temu's price advantage also greatly limits the quantity of its products - after all, large items still need to be shipped by sea. Therefore, Temu also needs local warehouse merchants to improve logistics speed and increase product selection. Amazon has a total of 850 million SKUs globally, while AliExpress has over a hundred million, but Temu only has tens of millions, which is still less than some convenience stores in terms of variety.

To solve the logistics problem, Amazon has spent over a decade building 110 distribution centers across the United States. Some of the large distribution centers are even larger than the Forbidden City, with 1,500 full-time employees inside.

Temu cannot afford to wait that long, it must seize the day. Since it does not have the capability to build such a system itself, it looks for capable individuals. Therefore, in the United States, it seeks out merchants with their own warehouses. "Temu is no longer responsible for domestic warehousing, international logistics, overseas warehousing, returns and exchanges. Large sellers will directly prepare the goods in advance and deliver them to overseas cooperative warehouses. The cost saved by the platform will be added by the merchants to the selling price of semi-managed goods."

Wang Hua's remaining stock also found a place, because goods in the United States can be shipped the fastest, and Temu is willing to tilt traffic towards such local inventory - provided that Wang Hua can ensure 20 new SKUs are listed every day. He said, "As long as it's listed, there will be traffic, orders will be placed as soon as it's listed, without spending a penny. Amazon can't do without spending thousands of dollars on reviews. This model is perfect for clearing inventory." However, the task of listing 20 SKUs per day is not easy, and the supply of remaining stock is unstable. So he searches everywhere across the United States. But basically, as long as it's listed, it can be sold out in a few days. Therefore, merchants with remaining stock actively seek him out for help.

But he never expected Temu's growth to be so fast at the beginning, quickly making his new warehouse no longer idle.

Wang Hua is just one of the many beneficiaries in this wave of Temu. And Temu is indeed working hard to attract these people. What Temu used to do was to ensure that its products were cheaper than others by all means. Now it hopes to continue to be cheap and even faster.

Chinese Players in the American Game

Temu's accelerated rise further highlights the problem of industry leader Amazon: it cannot lower its prices.

Amazon has developed into a platform with an oversaturated number of merchants today. It has very strong bargaining power. Therefore, Amazon has raised the price of traffic allocated to merchants. This was particularly evident in Amazon's first quarter 2024 financial report: although GMV grew by 12.5%, advertising revenue grew by 24.3%, far exceeding the growth rate of GMV This means that the seller spent more money on advertising, but sales did not correspondingly increase. The more money the seller spends on advertising, the more it implies that these costs will eventually be reflected in the selling price. In the American e-commerce game, Chinese players are already numerous enough, but apart from Amazon, Temu has provided these players with a potentially better choice.

A cross-border e-commerce practitioner gave an example: suppose there are 50 folding chairs with a cost of $6 each and a selling price of $19.99. Amazon's fulfillment fee is an additional $10. The merchant also has to bear the cost of shipping from their warehouse to Amazon's warehouse. On average, the profit per chair is approximately $3.

On Temu, the platform would lower the price to $16. The shipping cost per chair is around $7. By handing over the chairs to an overseas warehouse, the warehousing cost for these 50 chairs is $15 each per month, which is not high. Therefore, the profit per chair remains at around $3.

Temu can be cheaper than Amazon, while maintaining the same profit for the merchant.

This calculation is still based on the ideal scenario for Amazon. In reality, merchants also need to buy traffic or even pay for reviews themselves. With the current traffic on Temu, merchants are confident that they can sell out in the short term without investing in traffic. Not only is it difficult to sell out on Amazon, but returns also incur restocking fees. Some merchants have mentioned that although returns on Temu are simple, with a return rate of only 2%, Amazon's return rate is between 5% to 8%.

This has motivated a large number of sellers who were originally on Amazon to simultaneously join Temu. Temu understands Chinese sellers better than Amazon. Amazon is not particularly friendly to these Chinese sellers. It is difficult to obtain traffic, sellers find it hard to reach relevant personnel when issues arise, and most things have to be figured out by themselves. Some sellers have reported that the missing rate for items sent to Amazon's warehouse has increased from 1% to 5%. This means that before even starting to sell, 5% of the items are lost. Previously, such issues would definitely be addressed by Amazon, but now they are ignored.

In contrast, Temu is completely different. Sellers who join the semi-managed platform find that there is an immediate response to any information they send, dedicated staff to teach them how to launch new products and maintain links; Temu's buyers will also notify these sellers in advance, informing them of what the platform will promote next. Some merchants say that Temu's operations are guaranteed, as long as they can launch a certain amount of SKUs daily, they will continue to receive traffic to their homepage. Some merchants also mention that Temu's operations guide sellers on how to list products that Amazon does not accept, overall being much more flexible than Amazon. Most importantly, Temu helps merchants buy traffic and attract traffic; Amazon only buys traffic for itself, and platform sellers generally do not benefit from the traffic brought in by Amazon's advertising spending.

Although this is happening in the United States, in this game of affordability, no one can ignore Chinese sellers.

According to research by Marketplace Pulse, Chinese sellers occupy nearly 50% of the top sellers on Amazon in the United States, and may contribute to close to 50% of third-party GMV; another research firm, ecomcrew, believes that Chinese sellers account for 63% of all sellers. Some American sellers lament: "Do not compete with Chinese sellers on Amazon." "If they enter your category, just give up. Their understanding of the Amazon system far exceeds that of 99.99% of non-Chinese sellers." Amazon described these Chinese sellers as "significant" in its annual financial report (10-K).

On one side is the enthusiastic Temu customer service, everything can be discussed clearly through WeChat; on the other side is the troublesome Amazon. Chinese sellers naturally prefer Temu.

This is also why for a considerable period of time, Temu only allowed sellers from mainland China and Hong Kong to open stores, because that was enough. Temu used Chinese factories, inventory that Amazon didn't want, and Chinese top sellers who were originally their suppliers to tear open a crack in Bezos' kingdom with extreme low prices.

The Most Difficult Level

E-commerce games have complex aspects: suppliers, supply chain, operational efficiency, products... all must be done well to be allowed to participate in the game. But winners of each version find their biggest advantage in different aspects. In China, the latest version of the game, Pinduoduo, relies on more refined supplier and supply chain management than other players to achieve extreme low prices. By relying on low prices, it has reopened a game that was thought to have ended, allowing everyone to join the competition again.

Low prices are always the ultimate goal of e-commerce games, the same in the United States. Although the goal is the same, the levels of the game in the United States are different from China. In the United States, there are multiple choices for semi-managed service providers, making it impossible for Temu to control them like controlling domestic suppliers; more importantly, the problem in the United States cannot be won by rolling.

Long before Wang Hua rented his first warehouse, the United States had already completed the deindustrialization transition from the secondary industry to the tertiary industry. The United States does not produce most of the goods purchased by Americans, so the inherent nature of e-commerce in the United States is cross-border e-commerce. In the e-commerce game in the United States, solving logistics problems is a must to participate. But the logistics problems that the United States needs to solve are completely different from those in China.

The postage for goods sent from Yiwu to most parts of China can be as low as 0.5 yuan, which is why Pinduoduo offers free shipping across the platform. Consumers can basically not consider shipping costs when shopping. For Chinese buyers, it is obvious that shipping from abroad is more expensive. This does not need to be explained, as it is more reasonable for it to be more expensive when it is further away and cross-border, right? But in the United States, the situation is the opposite: the logistics cost from China to the United States is even lower than the domestic logistics cost in the United States.

As early as 2015, Amazon stated in a hearing: "Sending a 100-gram package from North Carolina to Virginia costs at least $1.94, a distance of 547 miles; but sending the same weight package from Shanghai only costs $1.12, a distance of over 11,000 kilometers. Similarly, sending a one-pound package from South Carolina to New York City costs almost six dollars, but sending it from Beijing only costs $3.66."

Amazon may not have expected that many years later, Temu and other Chinese cross-border e-commerce players would find new ways to take advantage of this. Because the U.S. Postal Service's subsidies for small light items give Chinese cross-border e-commerce, represented by Temu, a cost advantage, allowing small goods to be directly mailed to the United States via China Aviation Amazon is building warehouses across the United States, requiring merchants to send their goods to different warehouses in advance. However, under Temu's fully managed model, goods are sent directly from China to the nearest international airport after being ordered by consumers, and then delivered.

The population on the East Coast of the United States is larger, but the West Coast is closer to the production base in Asia. The cost of domestic land logistics spanning the East and West Coasts is high, and shipping to the East Coast is expensive. Direct flights from the place of origin are the cheapest. By utilizing negotiated prices with express delivery companies like SF Express, coupled with subsidies for small packages, in most cases, Temu's logistics costs are lower at every step before the goods reach warehouses in the United States compared to Amazon. Even Amazon itself has realized the problem and is reportedly about to launch a special discount zone for direct shipments from China. This is undoubtedly an imitation of Temu.

Temu and Amazon are essentially doing the same thing in the game: purchasing products from outside the United States at the lowest possible prices and then moving them to consumers at the lowest possible cost. Many sellers on Temu and Amazon are actually the same group of people. The reason why clearance goods become clearance goods must be related to the products themselves (not necessarily quality issues). Temu cannot surpass Amazon by relying on the same suppliers as Amazon and clearing out inventory clearance goods in the United States.

Everyone is using the same factories to produce goods, the same sellers to sell goods, and the same logistics to deliver to the United States. The most costly checkpoint here is also similar: the last mile. Because Americans can transfer everything overseas to reduce costs, the only real American issue that needs to be dealt with in the last mile is the last mile.

This step is also the most expensive in the entire logistics process: according to Capgemini's report, the last mile delivery accounts for 53% of the total transportation cost and 41% of the overall supply chain cost. A seller gave an example using their own home: "Once a courier drove to my house, delivered a package, and then left, taking an hour. His hourly wage is $25, so the cost of this order is so high." Although this situation is somewhat extreme, it illustrates one thing: no matter how costs are reduced on the production end, the reduced portion may be swallowed up by the last mile logistics.

Although most cases are not as extreme, the cost per small package is generally around $3. In the United States, prices vary among different suppliers. A supplier in the Midwest of the United States believes they can achieve $3.9 per order, while a supplier on the West Coast believes that with large volumes, they can achieve up to $2.5 per order. Amazon's costs are not transparent, but it charges $2.99 in shipping fees to members who have not reached the minimum spending amount.

According to YipitData's analysis, Temu's average order value in the United States is between $30-40. This means that as much as 10% of the cost of each order may be consumed in the last mile. Temu believes this is too expensive, and the reasonable cost should be one dollar, with an additional early subsidy of one dollar, totaling two dollars.

Most local service providers have given up, but under Temu's order volume, there must be brave warriors. A Chinese-founded last-mile contractor named UniUni came up with an idea: half of the last mile cost comes from labor costs, so they choose not to hire full-time couriers for cooperation The solution is to cooperate with part-time drivers to have them deliver goods while picking up passengers. UniUni initially did not directly deal with drivers, but placed orders through a program called Beans Route.

However, this was not feasible as drivers could not deliver goods while picking up passengers, only being able to deliver seven to eight items per hour. One driver needed to deliver 59 packages in one day, and Beans Route planned a route for him. But in reality, following this route would not allow for both passenger and cargo transportation. Therefore, UniUni had to come up with another solution.

In the end, Temu had to continuously raise prices to $2.5 per order. For a period of time, Temu worked with a semi-managed overseas warehouse, almost entirely relying on the US Postal Service. By entrusting the shipping to the US Postal Service, the larger the volume, the cheaper the cost. However, it was impossible to be lower than Amazon. The owner of an overseas warehouse calculated that even though Temu's cross-border costs were low, when factoring in the last mile, the overall cost was similar to Amazon.

This may just be a halftime break in the cost game, as Amazon has already proven the importance of building a logistics system in the United States. Firstly, American consumers pursue efficiency. According to Emarketer statistics in 2022, 53% of online purchases by American consumers are delivered within 2-3 days; only 10% take more than five days to arrive. However, over a third (38%) of consumers prefer same-day delivery. Products from Temu in China, even with semi-managed local warehouses, take at least 7 days for delivery, and fully managed products take even longer.

In the e-commerce game, cost reduction is pursued, but even after stripping away all costs, the last mile still stands as a cost center. Temu cannot transform all links here like its suppliers in China. Anyone who wants to play this game better must face this problem. It’s all in the game.

Overcoming Difficulties

Logistics costs have always been a challenge in the United States. Back when cities like San Francisco on the West Coast were rising, there was no transcontinental railway connecting the East and West Coasts. In the mid-19th century, it took twice as long to travel from New York to San Francisco as it did from Hong Kong to San Francisco. Hong Kong also seized the opportunity to become a major supply source for California goods. This is similar to the early version of Temu. Nearly two hundred years have passed, specific issues have changed, but logistics remains a major problem plaguing American businesses.

The specific issue now is the last mile. Whether it's Temu, Amazon, Shein, or independent sites, all American e-commerce companies must face this cost beast that never seems to decrease. Perhaps the entire logistics cost in the United States can be crudely simplified into one question: how to reduce labor costs in the last mile.

Labor costs include hourly wages, hours worked, and benefits. It is difficult to cut hourly wages and benefits, so the only option seems to be to improve logistics efficiency and deliver more goods per unit of time.

Taking Amazon, which excels in the last mile, as an example, a courier typically covers 5-6 postal code areas. Within a postal code, there can be as few as a few blocks or as many as several towns combined Before delivering every day, couriers will see today's stops - that is, how many destinations the algorithm thinks they should stop at.

If the daily task is within 150 stops, it will be a relatively easy day. However, in most cases, a courier's workload ranges from 150 to 200 stops per day. But this does not represent the actual number of deliveries, as the system will merge places that are relatively close together into one stop. The actual number of delivery points may be 200 or even more than 300.

The distances between these stops are real physical distances. They may be a 40-minute drive, crowded streets, or receiving rooms where no one answers the door. A courier is responsible for delivering to large houses in affluent areas, with driveways in front of these houses stretching for a mile. Most driveways do not allow other vehicles to enter, and the courier may even need to be good at running to deliver the packages.

It's not just about distance, there are also a bunch of messy and difficult situations that one cannot realize without being there. Almost all couriers dislike delivering at night because it's difficult to see the addresses on mailboxes and houses, especially individual houses. They also have to worry about dogs without leashes suddenly coming out to scare them - FedEx can refuse delivery because of this, but Amazon cannot. According to Earnest's statistics, Temu is growing fastest among high-income groups. So Temu's last-mile delivery cannot avoid the problems that Amazon encounters.

The challenge of labor costs is the efficiency of delivery, but efficiency cannot be infinitely improved. Ultimately, the challenge is the urban planning in the United States. Rationalist planners of the last century believed that cities should be simplified and reduced in density, with highways running through them or even residents should directly leave the city and move to the suburbs. Therefore, the middle and upper classes in the United States are spread out like sausages on a pizza around the outskirts of the city.

These suburban residential areas, along with the vast rural areas that people pass by on highways without ever stopping to look at, make up the last mile in the United States. Temu cannot solve this problem by relying on promotions like Pinduoduo does with sellers in China, because the last mile is not a commercial issue, it is a social issue. Social issues are like the weather, you have to face them.

However, just like Pinduoduo controls suppliers in China, Temu has also adopted its familiar method overseas: getting more players to join and then offering promotions. Now, in addition to UniUni, other last-mile carriers such as SpeedX and RoRo have joined the competition. Informed sources revealed that currently, Temu pays $1.8 to carriers mainly composed of Chinese, $1.6 to carriers mainly composed of Mexicans, and $2 to carriers mainly composed of Anglos.

To lower prices, one method is for a driver to deliver to only one zip code, making it easier to familiarize themselves with the route and increase the number of deliveries within an hour. Another method is to have many undocumented immigrants join as relatively cheap labor. They can work with the work cards issued by the U.S. government while waiting for their legal status. Some drivers have stated that they can earn around $20-30 per hour However, this method is only suitable for densely populated large cities and cannot cover the vast suburbs and rural areas in the United States where the absolute distance is far apart.

The Game that Can't be Won by Rolling

It is not to say that a city with convenient delivery planning is good, obviously reality is not so black and white. But in the United States, the middle class has inherited the life imagination of the old aristocracy, so as long as there is land, they keep building. In the end, cities are proportionally reduced and lined up like castles for the rich.

This approach is obviously not feasible. The life picture of "suburban big houses" eventually divided America into two geographical spaces after decades: one half is the middle class and the rich, and the other half is the lower middle class and the poor. And the continuous accumulation of urban planning mistakes over the past few decades has also fed the bitter fruits to all service providers in need of delivery, including Temu.

The living scenes of American residents can be divided into four categories: Downtown, Suburb, Rural, and Hood. Hood is often translated as a ghetto, but this is not accurate. By the standards of most countries, residents in Hood are not considered poor, they can afford to eat and have a place to live. However, Hood is indeed the space where the lower middle class residents in America live.

One person described their life in Hood like this: "You are afraid to go outdoors. You are afraid of slow-moving cars because you are worried about drive-by shootings. You don't go out for a walk or walk your dog because you are afraid of being robbed. There are always people loitering around, looking like they have no job. You dare not call the police for fear of retaliation. If a crime happens, you didn't see anything. Neighbors ask you to remove security cameras. Someone steals your bike or pet, then comes back to return it to you for $20. You don't even go to the park to play."

Another person jokingly gave a cruel but true advice: "If you are not sure whether you live in Hood, suburb, or rural area, stand on the front porch and urinate to test. If no one sees you, then you are in Hood. If someone calls the police, then you are in the suburbs. If no one notices around, then it's the countryside."

This is Hood. Everything will become more difficult here.

Jennie, the CEO of the American integrated marketing company HashMatrix, believes that Temu has made localized adjustments in sales channels and marketing strategies. In the eyes of Americans, Temu is not just cheap, but positioned as a convenient and reliable online marketplace that meets consumers' needs for convenience in life.

As a result, Temu has a rich user base in the United States. But overall, low-income families in the United States are more likely to shop on Temu. Any platform that competes for market share based on lower prices is destined to attract this audience.

According to ChinaTalk's report: In the first half of 2023, 55% of app users had an annual income of less than $50,000; in the second half, 50% of users had an annual income between $50,000 and $100,000. According to Google Trends, the places in the United States where Temu is searched the most come from West Virginia, Arkansas, and Mississippi - all of which are well-known for being among the poorest states in the United States In comparison, the income level of Temu users is generally lower than Amazon users.

This means that Temu's customers are more likely to be in Hood. When Temu was still using its iconic orange packaging, a delivery person complained in a video: "Every day it's Temu, Temu, Temu, I'm fed up with Temu. It puts the 17 items you bought into one bag, big and heavy. Why put all the 29 items you bought in that big orange bag? When they are stolen, you come to me saying, 'Delivery guy, where are my Temu package and the 47 items inside?' I don't know! Maybe someone stole them." However, now Temu has switched to regular packaging, so delivery people have lost that direct experience.

Losing a delivery in Hood is not even a serious issue.

Delivery people share their experiences in delivering to Hood. Even newcomers quickly learn the tricks because almost every order in Hood will have special instructions in the notes. The most common one is never to leave it at the front door, never, as it will be stolen quickly. In fact, many homeowners in Hood don't even use their front doors when they come home.

A responsible delivery person demonstrated how he would place the delivery between the outer iron gate and the door. He said he couldn't even leave it at the mailroom because you can't trust anyone. If necessary, he could even hide it in the bushes by the door. While he was delivering, a recipient asked him if he wanted drugs. In many narrow streets in Hood, parking is difficult, and people often shout at delivery people.

Even businesses sending out packages are affected. An overseas warehouse worker said their warehouse is no longer in a good area. They have to come in through a side door because a colleague was robbed at the main entrance. As a semi-fulfillment service provider for Temu, they now all use the US Postal Service. The USPS only scans the packages after taking them all, and each time, 5% of the items are lost. The Memorial Day in the US in recent years has been particularly bad, with almost a 100% loss rate on that day every year. He speculated that it's because there are no holidays in the first half of the year, and during tax season, everyone is short on money.

Logistics workers helplessly say, "I want to help you, but the situation is just like this."

This is the problem that Temu and all e-commerce platforms have to face. This is also why it is impossible to rely solely on robots and autonomous driving to solve delivery issues. To think that machines can replace humans in such a complex situation is either foolish or ignorant. Since the founders who can raise funds are not foolish, it can only mean that most tech professionals living in good communities have no idea about the reality of life for another part of the country's residents.

Today, Temu is still subsidizing users, but in the face of logistical challenges in the US, money can only solve a part of the problem

The Other Side of the Game

Although delivery is not easy and packages are easily lost, the residents in Hood may need Temu more than others. This is because the most significant feature of Hood is the lack of commercial activities. In Hood, there are check-cashing stores, pawn shops, and liquor stores illuminated by LED lights, but it severely lacks normal commercial establishments. Many areas in Hood lack large supermarkets, and even grocery stores and restaurants are nonexistent.

The COVID-19 pandemic has accelerated the disappearance of already struggling businesses in Hood. Two years ago, the well-known American broadcaster Peter Santenello visited several Hoods in Detroit, showcasing a neighborhood ecosystem that was undergoing revitalization. Many people may want to visit after watching the video, but they would surely be disappointed because every store mentioned in the program has closed down.

Meanwhile, Temu has entered the United States at this time. With high inflation and the accelerated decline of businesses, Temu has arrived at the most opportune moment. A homemaker living in Hood mentioned that she is aware that the quality of Temu may not be as good as Amazon, but she doesn't mind buying some toys for her children at the cheapest price, even if they lose interest after playing a few times.

Hood is like the outskirts of the United States. Even though Temu is already popular across the country, discussions on American internet platforms are still debating whether Temu is a scam, and many bloggers are advising people to reject Temu. The widespread criticism of Temu has once again brought back the age-old issue: Americans should not use Chinese applications or buy low-quality Chinese products. Simply by observing discussions on the American internet, viewers might even think that Americans do not use Temu at all.

For the past two to three decades, Americans have been continuously discussing and attempting to move away from "Made in China," even trying to produce everything domestically through policies. However, a continuous stream of goods continues to flow from Asia to the United States by sea or air transport. The decades-long "deindustrialization" not only caused a batch of factories to disappear but also took away the upstream and downstream of these factories, no longer cultivating skilled workers, and lost the ability for mass production. The bitter consequences have been swallowed by everyone in this country. Before Temu, a large portion of goods from Walmart and Amazon already came from China.

96% of industrial space in the United States has been rented out for warehouses. It is a warehouse country, with large warehouses and personal storage spaces densely scattered between rural areas, suburbs, ports, and cities. The United States has the largest scale of warehouses globally, and it continues to increase. The number of warehouses has grown from around 14,600 in 2007 to approximately 22,000 by 2023. Nevertheless, the United States still faces a shortage of warehouses.

Many large warehouses often have ponds nearby for rainwater management, creating picturesque scenery. Inside these warehouses, there may be many newly arrived Mexican immigrants who may not even speak English well. An e-commerce practitioner lamented that in order to recruit people for the new warehouse, they only required basic skills and no drug use. As a result, after receiving over two hundred resumes in a week, only four people came for an interview, and in the end, only one was hired, with uncertainty about retention These beautiful warehouses are just for storing goods that may come from China, Japan, South Korea, and other countries. The rapid growth of warehouses is accompanied by the continuous decline of the industry. The industries that were supposed to last forever have disappeared from here forever, never to reappear.

The result of losing the industry is that a large number of people can no longer find decent jobs. The consequences of urban planning from years ago are fully manifested here: a lack of public facilities, low-density communities without sidewalks, and once the economy starts to decline, it will slowly collapse. The middle class who used to live decent lives have moved away or fallen into the lower class, turning one community after another into ghost towns or Hoods.

In a situation where incomes are difficult to increase and decent jobs are hard to come by, goods manufactured in China have become one of their weapons against inflation.

The renowned American sociologist William Julius Wilson proposed an observation in the first chapter of his book "When Work Disappears": American cities have shifted from institutional gathering areas to areas of unemployment. In many central areas of cities in the 20th century, for the first time, the majority of adults were idle. In 1959, less than one-third of America's poor lived in metropolitan central areas; but by 1991, half of the poor lived in central city areas—these places are Hoods, places that locals or travel guides advise tourists not to visit.

Today, a large number of young Americans in poverty no longer have aspirations for work. If they can't get into a big factory, many would rather do odd jobs to make some money at any time, rather than take on a hard job. Because everyone understands: in this ever-changing cost competition, tasks come and go, demands are met instantly. The meaning of the word "work" has been hollowed out.

The American industries that once produced everything were first transferred to Europe, Japan; then to South Korea, the Four Asian Tigers; then to China, the world's factory; in the future, some will go to Vietnam, India, Indonesia... while American factories turn into warehouses, and middle-class communities decline into Hoods.

Where industry is caught, there will be continuous production, goods will cross the oceans and return to the starting point to meet the producers once again. The economy's abandonment of people has scabbed over, becoming a cost item in e-commerce company reports that needs to be explained awkwardly.

Temu, as a product, glimpses the results of the world over the past few decades. In a market gradually deindustrializing, Temu relies on suppliers bidding endlessly, rushing in with the absolute lowest bid, but its further growth will be constrained by this environment.

Temu has never been just a game about e-commerce, but a metaphor about urban planning and national development. The metaphor it represents will not only appear once, nor only in the United States. Low prices are just the most visible part of the game on the surface.

Source: LatePost, Original Title: "The American Game of E-commerce, Chinese Players in the Game"