What Is Temu? Read Before You 'Shop Like a Billionaire' (2024)

FAQs

What is the Temu controversy? ›

Why is Temu controversial? The US government accused Temu of potential data risks after Google suspended its sister site, e-commerce platform Pinduoduo, for containing malware. According to CNBC, analysts say Temu is less of a threat, and the risks associated with Pinduoduo were targeted at Chinese users.

2022 by Chinese e-commerce company PDD Holdings . Following in the footsteps of similar Chinese retailers, Shein and Ali Express, Temu allows Chinese vendors to sell and ship their products directly to customers, eliminating the middleman and any fees they might tack on in the process.

Temu ships directly from China – the world's leading wholesale market for almost every known product. There. The manufacturing costs are much lower because of the supportive government policies, cheaper labor, well-trained workers, efficient machinery, and more.

Temu is a legitimate company and a functioning e-commerce site, but it lacks accreditation from the Better Business Bureau (BBB), which is the standard for major retailers. Many of the tech items being sold on the site look like those manufactured by major companies like Dell or HP, but they're not authentic.

Cyber security experts have issued a warning against Chinese online marketplace megalith Temu's 'very dangerous' cash giveaway, claiming that it could lead to serious fraud. The retailer is offering users 'free' cash in exchange for new sign-ups - and hundreds of people are jumping on the bandwagon.

History. Temu is owned and operated by PDD Holdings, which also owns Pinduoduo, a common online commerce platform in China. PDD Holdings was initially registered in the Cayman Islands before moving its place of incorporation to Dublin in 2023. The Temu platform first went live in the United States in September 2022.

As for Temu's environmental practices and impact, things aren't looking much better. While the company claims that it's committed to sustainability and that its partnership with Trees for the Future is “transformative” for local communities, these actions aren't likely to cause a significant positive impact.

Temu is facing two separate class action lawsuits over similar claims referenced in the attorney general's complaint. The first, filed in September 2023, said that Temu failed to secure customers' personal and financial data and accused the company of wiretapping electronic communications of its website visitors.

Transaction Fees:

Similar to Amazon's marketplace model, Temu charges merchants a commission on each sale made through its platform. This commission serves as a primary source of revenue for Temu, allowing it to generate income from the transactions facilitated on its platform.

Knowing this, there is a strong likelihood that the clothing sold by Temu — which is manufactured in China — is indeed made via forced labor. But at least some of the retailer's other product offerings also could be made with forced labor, too.

Is Temu like Amazon? ›

With Amazon, manufacturers sell products to retailers for cheap. The retailers then mark them up and sell them to consumers for a profit. Temu skips the middleman. It focuses on getting products directly from manufacturers to consumers—no retailer in between to drive prices up.

Where Does Temu Ship from? Most of the products you see on Temu are directly shipped from Chinese suppliers and factories, while some can be shipped within the US.

"Once installed, Temu can recompile itself and change properties, including overriding the data privacy settings users believe they have in place." Griffin fears that Temu is capable of accessing virtually all data on a person's phone, exposing both users and non-users to extreme privacy and security risks.

Though Shein has kept a check on the sellers, multiple issues have still been reported with clothes made of cheap fabric or polyester. Still, based on the reviews, Shein offers better quality at affordable pricing compared to Temu. The latter has claimed to offer dupes and knock-off products, too.

Reports reveal elevated levels of lead, PFAS, and phthalates in fast fashion items. Temu's products, like those of its peers, harbor these toxins. In fact, Health Canada revealed that a Shein children's jacket contained more than 20 times the allowable amount of lead for children's products.

Fast fashion retailer Temu's Super Bowl ads drew the ire of lawmakers in Congress over the China-based company's links to products made with the use of forced labor in Xinjiang as well as its data-sharing policies.

"The experience and cheap prices give consumers a little dopamine hit and keeps them coming back for more." Regular promotions increase engagement, he adds, and the chaotic interface of the website creates the illusion for consumers that they can "dive in" and rummage around to discover a great deal – especially ...