Temu is facing a backlash as the company has imposed harsh penalties on its vendors when consumers return their purchased products. These penalties can amount to five times the sale value, possibly crippling its vendors, according to Reuters.
However, a merchant from Guangzhou said that Temu has fined its vendors “without a reason.” This vendor went to Temu’s parent company (PDD Holdings) headquarters in the city to protest on Monday.
Moreover, Temu’s products are already incredibly cheap. This practice has undercut U.S. small businesses while harvesting Americans’ data through their purchases online.
According to the Texas Public Policy Foundation, Temu is a “Trojan horse” as it has ties to the Chinese Communist Party (CCP). American data is its primary concern as it sells products made from slave labor.
The CCP has no motivation to check Temu on its standard operating procedures because it subsidizes the company ($400 million to PDD in 2023) and receives Americans' data in the process. By the end of January and before Temu ran Super Bowl ads, the company saw over 50 million American downloads of the app.
Because of this, China has received massive amounts of data from U.S. Citizens.
Senator Marco Rubio (R-FL) has called out Temu and its other cheap-product rival, Shein. In 2021, Sen. Rubio’s Uyghur Forced Labor Prevention Act (UFLPA) became law. In April of 2024, he called on Homeland Security Secretary Alejandro Mayorkas to investigate the companies and add them to the UFLPA entity list.
“It is past time for the Forced Labor Enforcement Task Force to begin adding entities to the UFLPA exporter list. Private firms and journalists have unearthed compelling evidence that both Shein and Temu are facilitating the entry of goods made with Uyghur forced labor,” said Sen. Rubio.
He continued by sharing that Temu and Shein have demonstrated “blatant exploitation” of loopholes for products made with forced labor.
“Given the blatant exploitation of trade loopholes that Shein and Temu regularly demonstrate, and the high probability these companies have facilitated the importation of goods made with forced labor, I urge you to investigate these companies and add them to the exporter list ... should they be in violation of federal law,” Rubio stated.
Temu, which has sold items in the U.S. made by businesses in that region, has exploded in popularity. In January 2024, Temu was the most downloaded app in America with 51 million monthly active users. This is a 300 percent increase from 2023.
With pressure from the U.S. and now those in Guangzhou, it will be interesting to see whether Temu is too big to fail.
