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

FAQs

What is the Temu controversy? ›

In addition, due to concern over data privacy, Temu faced a class action lawsuit filed in September 2023. The lawsuit claims Temu collects private data using “deceptive” and “unscrupulous” methods. However, Temu denies these allegations, asserting they do not sell customer data to third parties.

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.

As mentioned earlier, Temu sources their products directly from manufacturers in China, cutting out the middleman and reducing costs. They also operate on a low-profit margin model, which allows them to offer products at prices lower than most retailers.

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.

"What Temu is doing is selling goods at a rock bottom price, not to make a profit off of those, but as a way to get into your phone, your device, and to collect your data," Griffin said. "Not just traditional consumer data, but using malware spyware to have complete access to your information.

The Class Action Suits

In both class action suits, plaintiffs allege that the Temu's app is designed to embed a spyware and malware on user's phones to collect sensitive personal information.

Temu has been accused of a multitude of unethical practices from forced labor, copyrighting images from other businesses, stealing designs, data leaks, violating privacy rules, tax evasion, the list goes on, and very much suggests Temu to be unethical.

Temu (/ˈtiːmuː/ TEE-moo) is an online marketplace operated by the Chinese e-commerce company PDD Holdings. It offers heavily discounted consumer goods which are mostly shipped to consumers directly from China.

Though some customers complain about their bad shopping experiences on Temu, it is still a legitimate site. Temu is owned by PDD Holdings, which is a Nasdaq-listed company. There are various proactive measures in place to protect buyers' transactions at Temu. For example, Temu launched a Purchase Protection program.

In October, the Boston branch of the Better Business Bureau opened up a file on Temu and has received 31 complaints about the website. Temu currently has a C rating on the BBB, and an average customer rating of 1.4 stars out of 5, albeit from only 20 reviews.

Is Temu like Amazon? ›

Since Temu isn't like Amazon or Etsy – in other words, it's not an e-commerce-seller-friendly marketplace – we're going to look at it from the consumer's viewpoint. Here's what the Temu homepage looks like. As you can see, there's a huge emphasis on low pricing. Everything is (supposedly) majorly marked down.

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. Some third-party suppliers have set up warehouses to facilitate the timely shipping of many products.

Even if Temu handles personal data safely, there's always a potential risk of data breaches that could expose the data that has been shared with the Chinese app.

Since Temu ships directly to U.S. consumers from overseas and doesn't use a U.S.-based distribution center, packages fall into the “de minimis” loophole: Packages valued at less than $800 receive tax exemptions and less oversight from U.S. customs, allowing products to slip in that are potentially counterfeit, illegal ...

In essence, Temu allows customers to find virtually any product they can imagine. Shein, on the other hand, is a more dedicated fast fashion shopping destination and it is one of the top choices when it comes to apparel.

Washington legislators have accused both Temu and its China-founded rival Shein, a fashion-bargain app, of selling goods that may have been made using forced labor. The push is part of U.S. efforts to target Beijing's treatment of Uyghurs in China's Xinjiang region, which lawmakers have labeled as genocide.

Putting Temu on the list of banned entities under the law would be unprecedented. The law so far only contains manufacturers and other companies that are either based in Xinjiang or that the U.S. has alleged used forced labor from Xinjiang.

"Micro-influencers have strong communities, so their endorsement means a strong trust towards these products," she explains. Temu is owned by Chinese giant PDD Holdings - "a monster in Chinese e-commerce," according to Shaun Rein, founder of the China Market Research Group.