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This in the Direct Distribution Channel model. CEBR analyzes savings

Temu w modelu Direct Distribution Channel. CEBR analizuje oszczędności

Shein and Temu use illegal tricks. There is a reaction

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Shein and Temu use illegal tricks. There is a reaction

CEBR has analysed the impact of different distribution channels on the prices of a basket of basic products for British households. The research commissioned by Temu shows that the platform, operating in a direct distribution model from factories (Direct Distribution Channel), with fewer intermediaries and greater supply chain efficiency, allows it to offer products to consumers at significantly lower prices than competitors using the traditional IDC (Indirect Distribution Channel) model.

The difference between the Direct Distribution Channel model (from factory to consumer) and the Indirect Distribution Channel model (multiple intermediaries). The difference between the Direct Distribution Channel model (from factory to consumer) and the Indirect Distribution Channel model (multiple intermediaries).

Over 1000 PLN in savings per month

As UK households continue to struggle to cope with the impact of higher living costs, CEBR analysis shows that consumers who shop on factory-to-consumer platforms like Temu can save up to around PLN 15,000 (£2,961) a year. That’s 11% of the average UK annual income.

The study also showed that when buying on platforms operating in the “factory-to-consumer” model:

  • In an average month, consumers can save around PLN 1,250 (£247 – 46% of total monthly spend across the categories studied).
  • Consumers can save an average of PLN 400 (£79) per month on clothing (48% of total monthly spend on this category).
  • You can save around PLN200 (£39) a month in the leisure, garden and pets category (48% of your total monthly spend on this category).

Table showing consumer savings by major shopping categories Table showing consumer savings by major shopping categories

– By analysing consumer spending patterns and comparing prices across platforms, we found that UK households could save almost £3,000 a year by shopping on platforms that use direct distribution channels, says Nina Skero, CEO of CEBR. – Access to affordable, high-quality goods should not be a privilege. By working with leading global manufacturers and driving down costs, we are making these products accessible to all, she adds.

Additional benefits for manufacturers and import duties

The CEBR agency also analyzed the benefits for sellers offering their products on Temu. By interacting with consumers through the platform, sellers and manufacturers gained a better understanding of consumer preferences and demand for specific products. This in turn helped them avoid excess inventory.

The research also found that the UK’s import tariff structure cannot explain most of the price differences between companies using traditional retail models and those operating a factory-to-consumer model, such as Temu.

– As online shopping grows rapidly and becomes an increasingly popular choice for consumers, focusing on effective sales channels is crucial – says Nina Skero, CEO of CEBR.

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