Chinese online shopping service Temu takes Ecuador by storm; Sales could top $1 billion in 2025

Although the amount of direct-to-consumer products arriving from China has soared in recent years, shipments from one company are “off the charts,” according to Ecuador custom officials. “The number of packages delivered by Temu is growing so fast we are adding employees to our sorting and distribution lines,” says a shift manager at the Guayaquil Customs Service center.

Sales by Chinese e-commerce shopping service Temu is growing rapidly in Ecuador.

Temu, called Pinduoduo in China, competes with international e-commerce giants Amazon, Alibaba and Shein and is one of the fastest growing companies in China. Company officials forecast worldwide sales of $50 billion in 2024, up from $9 billion in 2020.

In Ecuador, Temu sales totaled $236 million in 2022 and are expected to reach half a billion dollars in 2024 and $1 billion in 2025. A company official says the recently signed trade agreement between China and Ecuador has allowed the company to lower costs and streamline the shipping process.

Temu’s advantage, the company claims, is its “direct link” to manufacturers, which eliminates middlemen and results to price savings.

The company’s low costs have raised suspicions in some countries, including in the U.K, where Temu products have been investigated for “dumping” and the use of slave labor. So far, no action has been brought against the company, which has produced documents claiming to show its products are produced using “fair Chinese wages.”

Even in China, Temu has faced charges of unfair practices, although investigations have so far revealed no illegality. In June, protesters gathered at Temu offices in Guangzhou claiming the company was undercutting prices of local manufacturers.

Shoes are among the top purchases on Temu by Ecuadorian customers.

Among cost comparisons with products sold on Amazon are hiking shoes carrying a British logo that sell for $87 on Amazon in the U.S. and the U.K., but are listed at $27 on Temu’s website. Many household items and clothing lines sell for less than 50% for the same or similar products on Amazon.

In addition, Temu’s aggressive online marketing program often offers special discounts of as much as 90% on individual purchases and 50% on entire sales shopping carts. Some items are even offered free for first-time buyers.

In Ecuador, company shipments are handled through the Aduana’s 4 x 4 plan, which allows packages of up to four kilos (9 pounds) valued at less than $400 into the country tax free. According to a Quito blogger who reports on the e-commerce industry, most Temu orders are delivered in Ecuador within 18 to 24 days, using local courier services such as Servientregas, Crossborderly, DHL and Skypostal. “The percent of lost packages is low because of the special arrangement Temu has with the Aduana and the delivery services,” the blogger says, adding that the company employees its own security agents to reduce theft during the customs process.

Although the blogger, who goes by the handle El Chivato, acknowledges service complaints from customers, he says these are dropping since the company began operations. “They are competing with Amazon, Shein and others and must take care of these problems to stay competitive,” he says.

Chivato says returning items is difficult and often impossible but that this is true with other international shipments as well. “This is an Ecuador problem due to inefficiency and because we are a small, isolated market. It is the same with Amazon products.”

According to Chivato, clothing, shoes and cell phones are Temu’s biggest sellers in Ecuador.