Temu browsing app offers low selling prices but some have safety concerns

Headphones for $10. A garlic chopper for $4.90. A smartwatch for $12. With Temu you can “shop like a billionaire,” an advert claims.

U.S. lawmakers meanwhile are suspicious of the Chinese e-commerce enterprise — it went from unfamiliar to the most downloaded app in the place in a matter of months.

The U.S.-China Economic and Protection Assessment Commission launched a report previous thirty day period singling out Temu and Shein, the preferred rapidly-vogue retailer, as two Chinese corporations of concern above issues related to exploitation of trade loopholes, product or service protection, compelled labor, violations of mental home legal rights and more.

Shein, which was established in 2008, has developed to be ubiquitous online as the position to locate low cost outfits and add-ons, frequently of doubtful excellent. Its income achieved $22.7 billion previous yr, and customers never look to care about the controversies that encompass the system.

Temu seems to be seeking to observe in its footsteps.

“Shein has truly established a product for how a Chinese centered e-commerce player can just take off in the U.S. and get traction, and most of that is primarily based on selling price,” reported Sky Canaves, a senior analyst for retail and e-commerce at Insider Intelligence.

Temu is owned by publicly traded enterprise Pinduoduo, a Chinese on the internet retailer that focuses on the agriculture business and is primarily based in Shanghai. Temu alone is dependent in Boston.

Supplying a extensive assortment of merchandise together with electronics and clothes, Temu has viewed exponential growth because it introduced very last September — from 5.1 million to 70.1 million U.S. exclusive people in February 2023, in accordance to Insider Intelligence.

For a long time, Chinese brands have arrived at U.S. people by way of Amazon. But as the price tag of promoting on the rapidly-shipping system grows and Amazon cracks down on Chinese sellers for fraudulent evaluations, much more corporations are seeking to split into the American market on their personal.

“[Chinese sellers like Temu] are sort of like middlemen that purpose to minimize out the middleman — assisting individuals help save funds, even though at the identical time providing some of the belief that a platform can present,” Canaves explained.

How Temu functions

Temu takes a shock-and-awe solution to reeling in to start with-time guests. There is no way to enter the web site until eventually you spin a wheel that gives $20, $50, and $100 discount codes. Then a countdown timer starts off, giving you a person hour to declare it by scanning a QR code and downloading the Temu app.

The moment you enter the web page, a timer in the upper-left hand corner counts down the seconds right until “free transport on all orders” is no lengthier offered. A row of lightning promotions gives a random assortment of goods for 73% off or 50% off. There is Mother’s Working day: up to 90% off. Prom 2023: up to 90% off. Beach Method-On: down to $.49. Appliances: up to 96% off.

Mimi Lan, a pop-up dinner and personalized chef based in Jacksonville, Fla., stated Temu has been immensely practical in buying catering provides to run her company.

“It’s genuinely challenging when you are in the company that I do, as a chef, to do non-public dinners, and culinary productions. Presentation is essential. Kitchen area equipment are crucial,” Lan said. “You frequently have to buy all these things in buy to do your event.”

While a generic fryer basket expenses $5.45 each and every on Amazon, it’s only $1.48 on Temu. The difference can include up when purchasing in bulk, Lan pointed out.

Lan is continuously in have to have of issues these as garnishing equipment, dumpling bins, steamer liners, parchment paper and high quality disposable plates. She made use of to get her materials from AliExpress — one more Chinese retailer owned by Alibaba Group — but now swears by Temu.

“It arrives a large amount more rapidly than AliExpress,” Lan reported. “It’s more cost-effective, it is packaged improved, it’s got [a] better guarantee.”

By guarantee, Lan refers to being in a position to get refunds for goods that she’s experienced problems with. Lan stated she would in no way obtain goods like clothes or electronics from Temu due to their bad excellent, but she swears by their house goods.

Leezan Da, a economic advisor in Vancouver, Clean., also primarily buys kitchen-relevant things these as stove liners, tea luggage and vegetable cutters. She doesn’t mind the top quality.

“What you get is what you fork out [for],” Da mentioned. “Don’t pay back much, that’s what you get. I do not complain about it.”

Da avoids electronics right after striving out a little, transportable washing machine that did not function, but she’d nevertheless advise Temu to pals for other merchandise.

Temu has a 2.35 out of 5-star rating with Superior Company Bureau, which has gained 274 complaints in the previous year as of April 2023 citing reduced-high-quality items, gradual delivery and lacking goods.

Some analysts attribute Temu’s early achievements to its large invest on advertising and drive for application downloads. The company 2 times ran a 30-2nd ad in Super Bowl LVII, which would have value about $14 million, in accordance to Statista. Temu saw a 45% surge in downloads, and everyday lively consumers jumped by about 20% on the day of the Tremendous Bowl, as opposed with the preceding working day, in accordance to Sensor Tower details. The business has also run hundreds of adverts across Meta’s platforms.

“There’s unquestionably no way Temu runs a lucrative retail organization,” mentioned Juozas Kaziukenas, founder of e-commerce investigation enterprise Marketplace Pulse. “They are correctly shopping for industry share and hoping in the yrs to come that market share will adhere.”

The legitimate cost of a offer

A fantastic deal on goods for individuals often arrives at a greater charge in other respects, and much stays unknown about Temu.

“Like Shein, Temu’s accomplishment raises flags about its small business tactics,” policy analyst Nicholas Kaufman writes in the U.S.-China fee report. “Temu’s lack of affiliation with recognized manufacturers has introduced considerations of product or service high quality as perfectly as accusations of copyright infringement.”

Temu did not answer to a request for comment.

There are also two key issues from a U.S. regulatory point of view: businesses with ties to China acquiring accessibility to broad quantities of buyer data, and broader shopper privateness and knowledge protection concerns, Canaves said.

The problem is “whether that data could then be accessed by Chinese authorities or utilized someway to harm U.S. pursuits,” Canaves explained.

Whilst Temu has not been accused of accomplishing possibly, the U.S.-China commission report cites a latest investigation by CNN of Pinduoduo’s application for Google Android devices. The investigation found malware enabling the application to bypass protection permissions to see exercise on other applications, access personal messages, alter options and make the application challenging to uninstall.

Shein’s operator, Hong Kong-dependent firm Zoetop, which also owns garments retailer Romwe, was slapped with a $1.9-million fine by the state of New York in 2022 for mishandling credit rating card and other own details following a cyberattack in 2018, the report mentions. The breach uncovered the consumer data of 39 million accounts.

With concern in excess of Chinese businesses on the rise, Temu most likely will deal with extra scrutiny as its reputation grows.

Past month, a bipartisan commission on China wrote a letter inquiring the U.S. Department of Homeland Safety to search into no matter whether Chinese e-commerce organizations these types of as Shein and Temu had been violating a regulation that banned all imports from China’s Xinjiang location with the assumption that they were being manufactured using forced labor.

In March, the Treasury Division reportedly gave TikTok’s Chinese father or mother enterprise, ByteDance, an ultimatum: Promote TikTok or facial area a ban in the U.S. TikTok Main Government Shou Zi Chew was grilled by lawmakers in excess of just how significantly influence China had over the system.

A lot more than two dozen states have banned TikTok on govt-issued units, and Montana legislators authorised a bill last thirty day period to block TikTok in the condition, the first ban of its type.

Nevertheless, regardless of whether a nationwide ban is on the horizon continues to be unclear. In March, the Household Foreign Affairs Committee voted to approve a bill that would give President Biden the authority to ban the platform right, and a comparable invoice introduced in the Senate has bipartisan assistance. Neither of these expenses have progressed.

In the meantime, Temu is previously location its sights past U.S. shores. It launched in numerous European countries final thirty day period immediately after launching in Australia, Canada and New Zealand at the commencing of March.

“We’ve genuinely viewed a meteoric increase of Temu that to me, seems to be pretty unprecedented in adoption of a purchaser retail application, and use,” Canaves mentioned. “The major query is how sustainable that is?”