In this case I'd guess they are selling at a loss.

As new player, it looks like they have a very aggressive growth strategy to get people to at least try them out.

They are part of the same group as Pinduoduo (revenues of 19 billion dollars in 2022 according to Wikipedia), a major e-commerce site in China, so they have deep pockets to fund this.

what's the "item discount" supposed to be...?

From what i know, the give an discount based on the sells of one group of deliveries. On other shops its usually similiar, but they give the discount only on a per customer base.

https://www.temu.com/search_result.html?srch_scene_type=main... I found these items by entering "*" into the search box, they have no way to just search all items on the site and sort by price.

Then filter results. This was literally first time using the site and I was not logged in or anything.