1. Introduction

Cross-border e-commerce is already an important part of many countries. It contributes to economic growth, especially in developing countries [1], where cross-border e-commerce can be integrated into the global economic system, promote local economic development, and boost exports and GDP [2, 3].

The study of cross-border e-commerce responds to the trend of globalization and digitalization and the needs of the era of rapid consumption. The Internet has broken the limitations of space and time, allowing sellers and buyers worldwide to conduct transactions through digital platforms. Because of the rapid development of logistics networks, cross-border e-commerce companies can deliver goods to global consumers faster and more reliably. Most companies usually optimize their supply chain management or adopt advanced logistics technologies, such as providing overseas warehousing services and setting up overseas warehouses in target markets, to shorten delivery time and improve user experience to shorten transportation time and reduce costs.

The research of this paper adopts the literature research method and case study method. Firstly, after reading and organizing a lot of collected literature about cross-border e-commerce, and combining with a specific example in China: Temu, a cross-border e-commerce platform under Pinduoduo, which is a mainstream e-commerce application product platform for China's mobile Internet, and it is also a third-party social e-commerce platform focusing on C2M group shopping. The marketing expense in the US market in the first month of Temu's launch reached one billion RMB. This paper focuses on this specific example.

Our findings will contribute to this field of study. First, research on cross-border e-commerce can help small and medium-sized enterprises (SMEs) overcome some trade barriers, such as tariffs and non-tariff barriers, to enhance their competitiveness in the market using big data analysis and precise marketing algorithms [4]. It understands consumers' purchasing habits and preferences in different regions, better meets consumers' individualized needs, and improves consumer satisfaction. It can also identify the market demand in different regions and help enterprises formulate more effective market strategies to expand the scale of exports. The rise of cross-border e-commerce platforms, such as Alibaba and Amazon, has provided SMEs and individual merchants with opportunities to enter the global market [5].

2. Literature review

1. To increase the success of cross-border e-commerce, one must have the ability to make sure that there is a lot of money.

In order to be a good example of the business, e-tailers must use a digital marketing strategy to make the business strategy more effective to improve the visibility of e-business and attract consumers to shop.

The application of digital marketing methods has a good effect on international business performance [6] Supply chain communication and cost control capability affect the performance of cross-border e-commerce enterprises to a certain extent. In addition, the service level of digital platforms and the digital transformation capability of cross-border e-commerce enterprises might greatly improve their performance [7].

A flat organizational structure helps to increase a company's competitiveness because it allows for smoother communication and faster decision-making between management and employees. Mastery of key technologies is a key point for companies to gain an advantage in the market, and it can make them stand out from the competition. The quality of service provided by the enterprise and customer satisfaction are crucial to the success of the enterprise, which directly affects whether the enterprise can occupy a place in the market. In addition, a business that can effectively control costs and improve capital utilization efficiency will significantly enhance its competitiveness [8]. Suggestions are made to promote the development of cross-border e-commerce in China through developing independent brands, good market positioning, strengthening quality management, and efforts to reduce logistics costs [9]. Cross-border e-commerce in China involves addressing trade challenges, enhancing global commercial exchanges, and improving the affordability of Chinese exports regarding global business efficiency. Similarly, several fundamental factors currently limit cross-border e-commerce in China, including inefficient customs clearance, logistics costs and risks, monitoring, and regulatory challenges, tax refund settlement challenges, payment risks, insufficient talent in the industry, and the lack of a scientific regulatory framework [10].

2. In addition to the use of social media and online marketing, these are known by the application of digital marketing methods, which also include the search engine of the company and other related marketing activities.

In their ability to promote digital marketing, which includes social media, marketing, social, and mobile marketing (SEM), digital, mobile, or digital analysis, the company hopes to increase customer engagement by creating a positive and strong customer base [11]. To get a competitive advantage and increase the level of customer experience, managers in the internationalization of cross-border e-commerce brands ought to strengthen the sense of brand awareness and the perceived quality, using product co-marketing, marketing tools including Internet marketing and promoting the e-commerce platform, and other marketing instruments [12].

Campaign-based e-marketing, such as Alibaba's extensive use of search engine ads on Baidu and Google to boost product visibility and Xiaomi's social media marketing on platforms like Weibo and TikTok to engage young audiences, effectively drives consumer attention, traffic, and sales [6]. Also, e-commerce companies need to develop marketing strategies to influence consumers' attitudes and purchase intentions in the marketplace. Developing consumer trust in the authenticity of the products of online vendors is key, which will help to increase consumers' willingness to buy [13].

Overseas independent websites are subject to high marketing costs, and multinational enterprises face greater regulatory pressure. In addition, the impact of e-commerce imports on the existing tax and distribution system is quite controversial. Inventory management, product aging, security issues, and information technology needs of enterprises and regulators have also become significant obstacles to the development of cross-border e-commerce [14].

Several studies have found that significant trends now include accelerated mobile pages, micro-blogging, voice search, blogging, and social media. In this ever-changing digital world, marketers need to be up-to-date with the latest SEO and social media marketing techniques to compete, so businesses need to use social media to develop their marketing strategies. Social media content spreads quickly, and this 'viral' distribution makes it an important tool for companies to promote their products and attract their target audience. In other words, if you want more people to know about and buy your products, you need to learn how to use these social media platforms [15].

Digital marketing is not just about opening up new sales channels and finding new markets; it is also increasingly focused on meeting the various needs of customers. Many companies now develop mobile apps so customers can easily browse and purchase items on their mobile phones. At the same time, these companies also offer online payment options to make it easier for customers to complete the buying process. For customers to better understand their products and services, many companies provide as much information about their products online as possible. Some companies also customize their websites according to the needs and preferences of their consumers so that they will have a better experience when they visit. By analyzing customers' search history and purchasing behavior, companies can learn more about their needs and make better adjustments, such as recommending items that align with customers' tastes. This approach can help companies better meet customer needs and customers would feel that they are getting attentive service. Social media also plays an important role in digital marketing. The customer base can be targeted by businesses more accurately by promoting their products and services on social media platforms. Social media also allows businesses to interact directly with their customers, creating a simple and efficient mode of networking, which is very beneficial. Organizations strive to turn employees into brand ambassadors and customers into fans by creating valuable and creative content and sharing it on social media as appropriate. Some organizations also use internal social media platforms (e.g., Yammer) to inform employees about new services and products and to facilitate internal interaction and communication. Swiss research shows that these organizations also use social media such as Instagram, Facebook, Twitter, LinkedIn, and XING to attract new customers and keep in touch with existing ones. Maintaining a good online presence (e.g., a website) is important to stay competitive. A successful website helps organizations to become more visible in an increasingly digital marketplace. In this context, digitalization ensures their presence in the market. In the meantime, organizations recognize that only some people are good at using digital technology, so they must communicate and reach out to different groups through multiple channels [16].

SMEs looking to close the gap with larger businesses and develop and implement a digital marketing strategy can utilize a complete digital marketing toolkit of 24 tools. Eleven of these tools were frequently mentioned in greater than a quarter of the articles: content marketing, online advertising, mobile marketing, email marketing, search engine advertising (SEA), affiliate marketing, online PR, search engine optimization (SEO), viral marketing, company websites, and social media. Based on their use in the literature, these digital marketing tools are organized into seven categories: marketing strategy, customer experience management, and brand management. These are strategically important and directly influence the other four categories. Formats, channels, and platforms include numerous tools that can be used for marketing, with content marketing being critical as it provides worthy content for the organization's digital platforms and channels. Monitoring tools and analytics provide learning opportunities and feedback for organizations. In short, all digital marketing capabilities must be distinct from marketing technology, including customer relationship management and marketing automation [16].

3. Analysis

To address this research question, this paper chooses Temu as the research object. Temu's sales in the first half of this year reached around $20 billion (currently around Rs.143.542 billion), of which the GMV in the second quarter was around $12 billion (currently around Rs.86.125 billion), with the U.S. market accounting for nearly 45 percent.

Temu mainly runs a full hosting model led by the platform (including pricing, warehousing, operation, logistics, attraction, and after-sales); logistics costs are lower, there is 0 commission, there is no need to pay any fees, and there are 0 thresholds to move in. Temu, in the operation of this model, has three key points. Firstly, Temu has three critical elements in operating this model. Firstly, Temu was launched in 2022 at the perfect time as the U.S. was experiencing the worst inflation in 40 years, prices were rising, consumer purchasing power was declining, and the market was beginning to show a trend of consumer downgrading. Secondly, regarding marketing promotion and shop operation, the primary challenge for Chinese merchants entering overseas markets is the language barrier. Customer service is more challenging to communicate with customers, and foreign policies and regulations must be re-learned, creating a significant barrier to entry. Finally, in international logistics, in the process of global express delivery, it is challenging to make a profit, but it is easy to lose money. In the full hosting model, to solve these difficulties, buyers in China only need to supply in addition to Temu's buyer team, is responsible for the selection of goods, then send the goods to Temu's warehouse in China, the subsequent series of links (warehousing, operations, logistics, customer service) is responsible for the platform, will be shipped to the overseas in the local service providers for cooperation and negotiation, which helps those who have difficulties in going to sea or the inability to go to sea. This allows merchants and supply chains that have problems or cannot go overseas and, to a certain extent, eliminates many barriers to entering overseas markets.

Here is a brief introduction to Temu's shipping process. First, sellers must log in to the seller's back office, select the product category they want to sell, and then fill in the relevant product information, such as the product picture, Chinese name, specifications, and outer packaging picture. After submitting this information, the whole on-shelf process is completed. Then, after the products are submitted, the platform's buyers will select the goods at the right price and the products in the corresponding categories. If a merchant's product is not selected, the product has not passed the screening and will not be displayed on the front end. If the product is selected, the buyer will submit it for review, focusing mainly on the price. The price review is carried out by another price checker, who will evaluate the product based on the lowest price on 1688 and other platforms instead of directly adopting the offer provided. If the price audit does not pass, it may be recommended several times to reduce the price; only after both sides agree on the price can the product successfully pass the audit. At this point, the merchant needs to submit the delivery note; the delivery note also needs Temu platform buyer audit; audit speed depends on the domestic warehouse workload. When shipping orders through the audit, the seller needs to send the product and the stock quantity to the designated domestic warehouse to complete the whole process of Temu stocking. The labeling of the products is the responsibility of the seller, and the subsequent selling price of the products in US dollars on the platform and the international logistics are handled by the platform without the seller having to worry about them.

This, in turn, has to mention a lot of cross-border e-commerce run with a very common model - The pirate model (AARRR), AARRR model was first put forward by the Silicon Valley well-known venture capitalist Dave McClure in 2007; it will be the user's entire behavioral process is broken down into five key indicators: Acquisition, Activation, Retention, Revenue, and Referral, which will be discussed one by one.

Acquisition refers to attracting users to participate in activities through various channels, covering acquiring new and old users. Usually, the cost of acquiring new users is higher through promotion, KOC (Key Opinion Consumer), and channel promotion. On the other hand, old users have already stayed active in the product, and their acquisition cost is usually lower. Temu is a typical example of fission marketing (fission marketing is the growing number of customers through the fission effect in the marketplace, where customers spontaneously promote themselves on the platform to achieve better publicity). For example, Temu has carried out several activities, such as 'getting new products in a group,’' assisted price cutting, and dividing red packets. Users launch the campaign after choosing their favorite products and sharing them with their friends, and through their friends' support, the prices of the products are continuously reduced, or they get rewards after reaching a certain number of friends' boosts. This activity mode is analyzed using the AARRR model. Old users continue to pull in new ones, forming a self-propagating fission-sharing mechanism that consumes the value of social relationships between users.

Activation refers to guiding new users through using a product and completing their first experience. When a new user enters an app, the series of actions they must take is considered conversion. Retaining users is more challenging because they have strong subjective perceptions of the product. To activate and convert users, it's essential to focus on key aspects, such as how the product meets their needs, the methods used to fulfill those needs, and the differentiating advantages compared to competitors. Additionally, understanding the critical moments and behaviors that reveal the product's value through data analysis and user research is essential. On Temu, the platform analyzes users' browsing and purchase history to recommend relevant products, attracting and retaining customers.

Retention involves creating more comprehensive and motivating mechanisms that foster a strong affinity for the product, turning users into loyal customers. To keep users hooked on the product—often called user stickiness—it's essential to focus on a few key areas. The product needs to be competitive, offer unique core features, provide a positive user experience, consistently deliver quality content, and meet user expectations. Additionally, incorporating social interaction features can boost customer retention. For example, Temu sometimes offers special promotions to reward users, encouraging behaviors that lead to higher retention rates. Common tactics to engage new users include introductory tasks, coupons, and referral gifts, which help drive initial engagement and promote ongoing use of the service. In July 2023, according to CIM, Temu's 7-day and 30-day user retention rates in the U.S. market reached 18.5% and 13.5%, respectively—outperforming eBay and SHEIN and slowly catching up to Amazon.

The use of product features or operational activities is the process of making a consumer's payment by the user, in which the revenue is created. Temu uses different kinds of marketing such as discounts, vouchers, etc to get the customers in the process. The platform also uses advertisement, social media, and other means of promotion which in turn increases user loyalty and increases user visibility. The regular advertising such as the sales of the holidays, the product also starts to be introduced, this also increases the spending of customers by the users.

Referral strategies focus on addressing users' needs and expectations, which leads to high engagement and advocacy. For example, when cross-border Temu stores want to increase traffic, they can use social media platforms like Instagram and Facebook, collaborate with popular bloggers, or partner with Key Opinion Leaders (KOLs) for promotion. This not only increases the store's visibility and traffic but also enhances interaction with potential customers. By showcasing key product features, these strategies attract customer interest, draw more visitors to the Temu store, and boost sales by quickly converting potential buyers.

4. Case study

Temu's success in the highly competitive e-commerce market is mainly due to its core strategy and tactics. Temu's core competence lies in its excellent value for money. Although Temu's business model is based on a low-price strategy, unlike its competitors, it often offers deep discounts and sometimes even 1-cent specials. This pricing strategy allows consumers to enjoy excellent value for money on Temu, especially in the women's clothing and daily necessities categories, where Temu's prices are usually 30%-50% or lower than those of other platforms, thus attracting a large number of users.

In terms of logistics, Temu's efficiency is also one of the critical factors in its success. The company offers free delivery and returns and ensures faster delivery of products to customers through an extensive network of suppliers and shipping partners, thus solving the problem of supply and distribution networks, which is one of the main reasons why Wish has not been able to enter the Western market successfully. In the U.S., 20% of online shoppers say online shopping does not offer the fun and experience of offline shopping. To make up for this, Temu has introduced interactive mini-games, such as card games, that allow consumers to interact and earn rewards during the shopping process, prolonging consumers' stay on the platform and increasing the fun of shopping.

Another core strategy of Temu is to build a network of friends and acquaintances to share the shopping experience. Temu has borrowed the group-buying model from China and extended it to overseas markets. Consumers enjoy volume discounts by buying in groups, thereby increasing bargaining power. Combined with a referral program, Temu offers discounts to new customers, further facilitating a shared shopping experience. This social shopping model enhances user interaction, making Temu more of a community than just an e-commerce platform. The operation and expansion of Temu also bring about a variety of positive externalities, i.e., the economic activity of one economic agent leads to additional financial benefits for a third economic agent without the beneficiary having to pay the associated costs. The first is a significant increase in economic development, consumer spending, and quality of life.

The rise of Temu has also resulted in significant gains. Temu has set a goal of reaching $30 billion in transaction volume by 2024, more than double their projected volume for 2023. 2022's full-year volume was $29 billion [17]. According to Similar Web, in December 2023, Temu's performance was glowing. The platform had 467 million unique visitors, similar to Aliexpress's and second only to Amazon's 2.659 billion visitors. This means that Temu's popularity and reach are rising rapidly across the globe. By 31 December 2023, Temu's total revenue reached ¥247 billion (about £27 billion), which is almost double the ¥130 billion (about £14.2 billion) of the previous year. In other words, they have doubled their revenue in just one year, which is an awe-inspiring growth rate. Not only that, but Temu's operating profit has also increased dramatically to ¥58bn (about £6.3bn), which is a 93 percent increase on the 2022 figure of ¥30bn (about £3.3bn). This demonstrates that Temu remains highly profitable despite rapid expansion. Notably, Temu's customer stickiness is also high. Data shows that over 28%of users choose to buy again after their first purchase. This indicates that users are satisfied with Temu's shopping experience and want to continue shopping on the platform. According to a study by Earnest Analytics, Temu has seen a staggering 840 percent growth in sales from January 2023 to 2024. Especially during the holiday season of 2023, it grew by more than 1,100 percent. In June 2023, Temu was ranked fourth with 226.3 million users worldwide [18].

Temu, as a cross-border e-commerce platform, shows great potential for development, opening up a wealth of market opportunities for entrepreneurs. With its strong brand influence and perfect operation system, Temu can provide entrepreneurs with support and assistance in many aspects. Firstly, Temu has excellent supply chain integration capability, which means that entrepreneurs can obtain a high-quality and abundant supply of goods with its wide range of commodity resources and stable supply guarantee. This advantage means that entrepreneurs don't need to invest a lot of money in building their supply chain, allowing them to start their businesses at a lower cost.

Temu also gives business-wide help to the business which leads to them the study of the industry and understand the trend of the company and the needs of customers are more improved and more visibility of the brand is also promoted and marketing by the platform, Temu also helps the marketing and promotion, so that brand is very visibility and the company's competitiveness is very good, the advantages of which are not very high the cost of the business, so that entrepreneur's business can begin to be fast, with less financial risk so Temu has strong brand and market presence so they can get the business faster, and with a large amount of profit in the process, the company's business is very profitable and the business of the enterprise is very strong, so Temu also has a very high level of business and market share, which is very good and the company has strong support, so that the business enterprise of the enterprise can achieve the market competitiveness of enterprises, so as to achieve business competitiveness.

For emerging fashion brands aiming to make a mark internationally but lacking the resources and funds to do so, Temu simplifies the process of promotion and market expansion. The platform offers a variety of marketing tools and resources to help brands promote globally. For example, its advertising services and market analysis enable brands to identify target markets and increase visibility through strategic advertising. This way, they can reach more international consumers and boost sales.

Moreover, with Temu's platform, these firms might easily get global recognition and draw orders, not just because of Temu's strong marketing capabilities but also because of its strong supply chain integration. Temu connects brands with quality suppliers, giving them access to a wide variety of products and assuring a constant supply. This decreases the risks connected with sourcing products and strengthens the stability of their supply chain, making it easier for emerging brands to grow and succeed. Brands can operate their online stores with greater peace of mind without worrying about sales being affected by stock shortages or supply chain interruptions. Overall, Temu has helped these firms overcome many resource and capacity limits, making it easier for them to prosper in the global marketplace.

However, Temu has also experienced the road from high-flying to stormy in the market. In terms of advertising, Temu has spent a lot of money on advertisements to attract more users. Between January and November last year, Temu's advertising expenses increased ten times compared to the previous year. In 2023, Temu spent about $1.2 billion on advertising on the Meta platform, placing 8,900 ads in just one month. And Temu spent about $15 million on ads during the U.S. Super Bowl alone. As a result of these vast promotional and marketing costs, plus the cost of logistics and promotions, Temu is losing an average of about $30 on every order sold, and the total loss could be as high as $3.65 billion [19].

In addition, Temu is expanding globally, which means it needs to comply with the laws and regulations of different countries and regions. This places high demands on the company's management, legal affairs, etc., and creates uncertainty regarding tax policy and government scrutiny. For example, the U.S. Congress has pointed out that Temu's supply chain may be at risk of forced labor, and such negative publicity could make it more challenging in the U.S. market. The U.S. government has an '$800 rule,' which says that packages valued at less than $800 delivered by direct mail to individual buyers can enter the U.S. duty-free. This is good news for Temu because its e-commerce platform model does not directly produce goods but provides a trading platform for suppliers and consumers, so it relies heavily on an efficient logistics system to connect supply and demand. Temu is a platform e-commerce company that doesn't produce its goods but only provides a place for suppliers and consumers to buy and sell things. It mainly relies on an efficient logistics system to deliver goods directly from suppliers to consumers. However, with Temu's rapid growth, managing many suppliers and keeping logistics running efficiently has become a big problem. Especially in the U.S., Temu needs to address the gap in shipping speed and logistics costs compared to Amazon. In markets like Japan, high labor costs make it harder to ensure logistics efficiency.

In this way, Temu faces logistics and supply chain management challenges in different markets, competing with the big players and dealing with varying operating costs in other places.

5. Discussion

The data suggest that Temu's business model has much to offer. Although it still faces some problems and challenges, on the whole, its fully-hosted model, marketing techniques, and market expansion strategies show strong potential for growth.

Firstly, Temu's fully managed model is a considerable advantage. For merchants, especially those sellers with no international trade experience, the cross-border e-commerce marketplace may feel complicated and high-barrier. However, Temu's fully managed model is like helping merchants open a green channel, which means that Temu handles many tedious things for merchants, such as logistics and customer service. Merchants only need to focus on selling their products and leave everything else to Temu. In this way, merchants save a lot of trouble and save a lot of costs. As a result, many merchants find this a good deal and have joined Temu's platform. Although this may result in less profit for merchants, many Chinese brands, such as Temu, can quickly enter the overseas market, a rare opportunity for merchants needing more resources. In addition, Temu's rapid growth in user traffic and orders has proven that the model works very well in the marketplace, and many merchants in the industrial belt have benefited as a result.

Secondly, Temu's success is also due to its marketing strategy; Temu has spared no expenditure in advertising, especially in the U. S. market; it can be said that you can see its advertisements almost everywhere you go. This kind of widespread advertising allowed Temu to attract many customers quickly, rapidly increasing awareness and aerating its expansion in the international market. Temu used money to hit the market, and in a short time, many people knew and started using its platform.

But Temu has issues. Some vendors have expressed their complaints about the platform's regulations, such as the fact that the fees for the platform must be more transparent, the rate of confusion, and sometimes situations where the quality of their products could be improved because of the difficulty of the rates. At the same time, Temu also needs to be more relaxed about product quality control, but Temu offers merchants convenient cross-border e-commerce services. It causes some customers to not be satisfied with their purchases and even leads to bad reviews.

Overall, as an emerging cross-border e-commerce platform, Temu does show its great potential. Its fully managed model, massive advertising investment, and market expansion strategy laid a solid foundation for its success. Even though there are some challenges, its rapid growth illustrates its unique value and large market opportunity in cross-border e-commerce. If merchants want to join Temu, companies must consider their strengths and weaknesses carefully. In contrast, consumers need to pay more attention when buying products to ensure product quality and after-sales service can be guaranteed. Overall, Temu's development prospects are still up-and-coming.

The results provide a new insight into cross-border e-commerce in China.

6. Conclusion

This study reveals Temu's fully managed and mass marketing model, which provides a new business model reference for cross-border e-commerce enterprises, especially when facing the diversified needs of the global market. Enterprises can get inspiration from it and learn how to innovate and adjust their business models to better adapt to different market environments. It also serves as an opportunity for entrepreneurs interested in e-commerce, particularly for those newly developing brands.

Temu's fully managed model makes it easier for merchants to enter the international market, and studying this model can help other cross-border e-commerce companies craft lower-threshold business models and attract more SMEs to the cross-border e-commerce space. Specifically, businesses can learn many practical operational strategies from Temu's experience, including managing logistics, conducting marketing, and providing customer service. Companies can better understand the cross-border e-commerce industry through these strategies and learn how to grow their business through managed services, marketing, and scaling strategies.

In the future, Temu and other cross-border e-commerce companies can improve the fully managed hosting model, for example, by optimizing hosting services (inventory management, order processing, customer service, etc., to improve the overall quality of service.) and controlling costs by offering more competitive prices for hosting services while ensuring service quality. Establish stable relationships with those high-quality suppliers to ensure that the raw materials and accessories they provide meet our high standards. This is like finding a reliable friend to work with. We should continue setting strict quality inspection standards and adding quality-checking steps at every stage of product production and transport. This can identify and solve problems promptly, reduce product defects, ensure that every product received by consumers is good, and increase their satisfaction, ensuring that every product meets the requirements to ensure that they are of high quality and meet consumers' expectations.

Moreover, artificial intelligence and big data technologies can be used to help businesses make decisions. Improve user experience by analyzing large amounts of data while predicting changing trends in the market. Simply put, it means making more intelligent decisions, understanding customers' wants, and preparing in advance. As well as building more warehousing centers near major markets. This reduces delivery times and transport costs, making logistics more efficient. It's like putting a small warehouse in different places so that distribution to customers is faster and less costly.