In 2023, the new yet old overseas expansion model of "full trusteeship" has become the focus of the spotlight on the cross-border stage.

Different from the traditional third-party platform model led by Amazon, full hosting redistributes the roles of the platform and merchants, and implements the logic that the platform dominates front-line sales while sellers retreat to the back to provide assistance.

The industry is amazed at the rapidity with which the full-hosting wave has swept the industry, but doubts are also rising. Under this system, sellers have ceded most of their rights, under the euphemism of providing a nanny-like efficient overseas channel, but losing pricing power also means giving up profit margins.

While the outside world is still debating this, AliExpress has taken the lead in developing an advanced version of the full-hosting model - semi-hosting. In short, it is to unlock more autonomy for sellers while taking on complex sales links.

As the core driving force behind the popularity of full hosting, Temu has also quietly followed the pace of AliExpress's improvement of the full hosting model. However, this semi-hosting is not the same as that semi-hosting. What is Temu's plan for actively seeking change?

The news that Temu is about to launch semi-custody spread everywhere overnight.

Recently, an insider revealed that Temu plans to launch semi-hosted services on the US site on March 15, and further expand to the European site at the end of the month. According to the relevant investment information shared by the sellers, under this model, sellers who have goods in overseas warehouses can import platform orders and fulfill their orders by themselves.

Compared with the original full-trusteeship model, the difference of semi-trusteeship is mainly reflected in the two links of inventory preparation and logistics fulfillment.

Specifically, sellers who already have a fully managed account still need to open a separate store, but the stocking process is more streamlined. They can skip steps such as product selection, sample sending, version review, and image review. They are only responsible for uploading products, filling in basic information, and maintaining inventory.

In the logistics and distribution link, fully managed sellers usually only need to send products to Temu’s domestic warehouse, and the subsequent fulfillment is fully handled by the platform. The warehousing and logistics solutions for semi-managed sellers are more flexible. They can choose merchants to be responsible for warehouse and distribution management, directly deliver goods to consumers, and be responsible for reverse logistics. processing.

Although both are variations of the full hosting model, there are also differences in the styles of Temu-style semi-hosting and AliExpress.

Strictly speaking, AliExpress semi-hosted is an upgraded version based on the POP model (merchant self-operation). Like third-party merchants, semi-hosted merchants have autonomy in operation and pricing, but they enjoy managed services in logistics and after-sales. The platform provides operational managed solutions covering logistics warehousing and distribution, exclusive marketing activities, and reverse returns.

From the perspective of the target audience, AliExpress targets POP merchants that have not joined the full-hosting model, helping such merchants to make up for their logistics shortcomings and enhance their competitive advantage, while Temu's semi-hosting model aims to attract mature sellers with overseas local fulfillment capabilities.

To a certain extent, the semi-trusted service of AliExpress is mainly aimed at improving the logistics fulfillment capabilities of self-operated merchants, which is based on the increasingly mature overseas logistics infrastructure. In contrast, Temu's warehousing and logistics construction is still in the initial development stage, so it needs to leverage overseas warehouse merchants to further optimize the platform's logistics level in the short term.

By comparing the two, we can find that Temu's semi-hosting is actually a detailed improvement on the prototype of full hosting. In essence, the two have the same core of "power" of the same platform - the most important pricing and operating rights still belong to Temu.

The purpose of Temu launching semi-hosting is different from the need to focus on both POP merchants and fully-hosted merchants of AliExpress. Instead, it still takes fully-hosted merchants as the main body and deeply explores richer and higher-quality resources of such merchants.

The difference between Temu and AliExpress's semi-hosting model largely exposes one of its biggest concerns - the pain of logistics.

Back in March 2023, Temu saw a surge in orders after its stunning debut at the Super Bowl, but its basic hardware capabilities failed to keep up with the surging traffic, causing multiple warehouses to remain paralyzed . The most serious warehouse outage affected Temu for more than half a month.

The only way to defeat martial arts is to be fast, and the e-commerce showdown is also a battle of timeliness. The reason why Amazon, the dominant player, can stand out in the United States is that it has built a strong barrier for its own warehousing and logistics system. In particular, the natural geographical barriers of cross-border e-commerce have determined that strong logistics fulfillment capabilities are the absolute lifeline to support the long-term development of the platform.

At present, Temu's logistics time is controlled at about 7 to 15 days. Its supply chain structure is specifically divided into three stages: domestic warehouse head-end transportation, international trunk lines, and tail-end delivery. Due to the lack of a self-built logistics system, both the head-end and the tail-end rely on cooperation with third-party logistics providers.

With the full trusteeship model, Temu is able to achieve a high degree of centralization in all sales links and control costs to the maximum extent. However, taking full charge of the merchant's logistics services also puts a more stringent test on Temu's logistics fulfillment capabilities.

But for Temu, which has only been in the market for a year, there is no shortcut to building logistics barriers. Therefore, it needs to rely on sellers with overseas local logistics resources to improve the platform's fulfillment efficiency.

Compared with Amazon's same-day and next-day delivery speeds, Temu's delivery time of more than 7 days has long been criticized by many consumers. However, by attracting overseas warehouse sellers through semi-trusteeship, the transportation link can be simplified to directly realize local delivery, and the delivery time can be controlled within 1 to 3 days, greatly shortening the logistics gap with local e-commerce platforms.

On the other hand, most overseas warehouse sellers have mature operating experience and relatively sufficient funds, and mainly sell large-sized goods with high value and quality. On the other hand, Temu's main categories are concentrated in small and light goods such as clothing and 3C accessories.

Therefore, using semi-hosting to attract high-quality sellers will greatly help enrich the merchant structure, expand the platform SKU and extend diversified categories, and further reach a wider consumer base.

Only one year after its launch, Temu has expanded to 47 countries and regions, with over 200 million APP downloads. Research data shows that as of December 2023, Temu's number of unique visitors reached 467 million, on par with AliExpress and second only to Amazon (2.659 billion).

The surge is inseparable from the protection of full trusteeship - through the full trusteeship model that eliminates intermediaries, Temu is able to integrate domestic high-quality supply chains, quickly gather factory-type and integrated industrial and trade sellers with deep sources of goods and independent production capabilities, and achieve extreme cost compression with a highly centralized management system.

This model certainly helped Temu to quickly increase sales by selling at low prices, but firmly controlling each sales link also meant carrying greater responsibilities. For Temu, which has only been online for more than a year, the platform's service systems are not yet mature. Therefore, as its user base continues to expand, drawbacks also arise - the backend hardware foundation cannot keep up with the soaring front-end traffic.

Due to the lack of a self-built logistics system, Temu's fulfillment speed is far behind Amazon. The extremely low-price strategy has also, to a certain extent, created a situation where merchants compete fiercely on price but have endless quality problems. This is also reflected in the shopping feedback of Temu consumers: low logistics efficiency and poor product quality have become the most important factors affecting many consumers' repurchase.

Coresight Research A survey conducted in August last year showed that compared with February of the same year, Temu's brand awareness increased by 20.2%, but the number of consumers planning to shop at Temu decreased by 12%, and the number of consumers who said "shopping at Temu is unsettling" or "do not buy Temu products" also increased significantly. This shows that while Temu's traffic has soared, its user conversion rate and retention rate still need to be improved.

The root cause is that the user experience of the platform is still a major shortcoming that hinders its development. If the cost advantage of full hosting helped Temu to advance rapidly in a short period of time and occupy the overseas market like a prairie fire, then the introduction of the semi-hosting model is to make up for the hidden dangers and disadvantages of full hosting.

Whether it is the precedent of Wish, which caused the platform ecology to lose control due to poor supervision, or the successful code of Amazon building a platform service moat and using users as the cornerstone of flywheel growth, both confirm the necessity for e-commerce platforms to gather long-term development driving force.

Therefore, for Temu, controlling product quality, optimizing user experience and improving the platform service system are the necessary paths to take. Only in this way can it further open up the market with quality and reputation, improve its brand image to convert and retain more consumers.

Temu has already made many attempts. In terms of logistics, it has expanded domestic warehouses and built overseas warehouses, while improving logistics fulfillment methods and cooperating with shipping giants such as Maersk. Now, it has leveraged the semi-trusted model to integrate high-quality overseas warehouse seller resources, and jointly promote the improvement of logistics delivery timeliness through multiple parallel lines.

In addition, Temu Passion has also introduced new punishment measures for overdue delivery. If the fulfillment performance of a store's inventory list remains at level C for a long time, the store may face the risk of being closed and cleared.

Of course, behind the launch of the semi-hosting model, we can also see Temu's attempt at diversification. If you want to go longer and further in the competitive overseas e-commerce market, relying solely on a single model or a single market is definitely not a long-term solution.

For example, the old giant Amazon has established its business through the self-operated + third-party platform model, and SHEIN has made its fortune through its own brand website. , and began to explore the dual-track route of independent station + platformization. For example, AliExpress, which was the first to propose the concept of semi-hosting, also implemented the strategy of focusing on both self-operated merchants and hosted merchants.

Semi-hosting is beneficial for Temu to optimize its products and seller structure. From its movements, we can see that it is not content to be just a super seller in the shell of "full hosting", but also has the ambition to become a full-category platform.

Whether it is full hosting or semi-hosting, it is a puzzle piece for Temu to build an overseas e-commerce empire. Of course, whether it will follow the footsteps of its rivals and take the path of third-party platformization is also the focus of attention from the outside world. Frankly speaking, Temu, whose hardware foundation is still in the initial development stage, still has a long way to go before it can become a platform. But in the future when it matures, it is not impossible to explore the route of self-operation + platform.