Temu Overhauls Semi-Managed Operations After Explosive Growth

Temu's New Changes for GMV Focus

In March 2024, Temu launched its semi-managed model, quickly becoming its growth engine. By July, 60,000 sellers had adopted the model, driving 500,000 daily transactions—around 10% of total sales across nine countries, including the U.S. and Europe.

Temu made substantial organizational changes, expanding its seller recruitment team to 1,000 people, divided into groups led by seven supervisors. As the year progressed, however, insiders reported significant adjustments to how the semi-managed model was being run.

First of all, Temu has revamped its seller recruitment process, transitioning from teams that covered all categories to specialized groups. For example, Group A now manages apparel, Group B is responsible for beauty products, and Group C oversees furniture. These category assignments are based on the results of previous competitions between teams.

Secondly, Temu is also combining its seller recruitment and buyer teams into a single category operations unit, aiming to provide better merchant support and improve conversion rates.

Moreover, the company is accelerating English language training for its employees as it gears up for international expansion.

Thus, how to interpret such reshuffle?

First of all, unlike Alibaba and other Chinese internet giants, Temu's parent company, Pinduoduo, has long been known for its flat and efficient structure, enabling fast communication and quick responses to market shifts. Therefore, this reshuffle is not unexpected.

Secondly, these changes come as a result of major changes during the second half of the year. In early 2024, Temu concentrated heavily on seller recruitment. Media reports suggest Temu opened an office in Shenzhen, rapidly expanding its recruitment team to over 1,000 members in just a few months.

According to insiders, senior management played an active role in the recruitment process. Unlike the fully-managed model, the semi-managed approach covers all product categories, with a focus on performance assessments. Executives were responsible for their team's overall results and had to compete both with other groups and within their own teams for sales.

By mid-2024, Temu began adjusting its strategy. Most top sellers from Amazon had already been approached by Temu. Meanwhile, a few sellers decided to leave the platform after a few months, citing operational challenges such as poor product selection, inventory management issues.

Consequently, from the second half of 2024, Temu shifted its focus from purely recruiting sellers to driving Gross Merchandise Value (GMV). Now, the company is not only seeking more sellers but also supporting high-revenue sellers to meet its strategic goals. These adjustments in the semi-managed team reflect this new focus.

In sum, the restructuring seeks to resolve inefficiencies in Temu's semi-managed recruitment strategy, with a renewed emphasis on enhancing the operations of current merchants. Meanwhile, post-restructuring, some staff will revert to fully-managed recruitment, but no further incentives will be extended to fully-managed sellers.

It's also clear that this restructuring is a step towards preparing for Temu's next expansion into global markets.