Temu Company

History Temu, whose legal name is WhaleCo Inc., is owned and operated by PDD Holdings, which also owns Pinduoduo, a popular online commerce platform in China.[13][14] PDD Holdings was registered in the Cayman Islands and moved its headquarters from Shanghai to Dublin in 2023.[6] The Temu platform first went live in the United States in September 2022,[5] becoming the most frequently downloaded app in the United States.[15] In February 2023, Temu launched in Canada.[3] That same month, the company aired a Super Bowl ad.[16] In March 2023, Temu launched in Australia and New Zealand.[1] In the following month, Temu was launched in France, Germany, Italy, the Netherlands, Spain and the UK.[2] Temu eventually expanded into the Latin American market.[17] Business model Temu allows China-based vendors to sell and ship directly to customers without having to rely on intermediate distributors in the destination country, making products more affordable.[18] It sells products at a loss in order to undercut competitors’ prices and get a foothold in new markets.[19] Temu offers free goods to some users who successfully refer new users via affiliate codes, social media, and gamification.[9] Online purchases on Temu can be made using an Internet browser or through a dedicated mobile app. Temu uses large-scale online advertising campaigns on Facebook and Instagram.[15] Temu requires its sellers to offer their products at prices lower than those found on AliExpress.[20] When multiple sellers offer the same product, Temu authorizes only the one with the lowest price.[20] Items not meeting Temu’s minimum sales requirements (30 pieces and $90 in 14 days) are removed from the platform.[20] Partnerships In November 2023, Temu partnered with cybersecurity agency HackerOne to offer a bug bounty program to reward ethical hackers for successfully discovering and reporting security vulnerabilities.[21] Reactions Lawsuits with Shein In December 2022, Temu was sued by rival company Shein, alleging that Temu had enlisted online influencers “to make false and deceptive statements” about Shein to promote its own goods. Temu later sued Shein in July 2023, alleging that Shein had “engaged in a campaign of threats, intimidation, false assertions of infringement, and attempts to impose baseless punitive fines” on clothing manufacturers thought to be working with Temu.[22] On 31 July 2023, Shein won a temporary restraining order against Temu in a different case, alleging that the company used Shein’s copyrighted images in product listings.[23] Later in August, Shein sought an injunction against Temu, filed in London’s High Court, alleging the company had “identified thousands of instances” where Temu’s sellers copied its listing photos. Shein requested all violating posts be taken down and at least £100,000 in damages.[24] On July 18, 2023, Temu filed a federal lawsuit, accusing Shein of violating U.S. antitrust laws.[11] Temu stated in the indictment that as of 2022, Shein owns more than 75% of the U.S. ultra-fast fashion market and leverages its market dominance to compel exclusive agreements with apparel manufacturers, restricting them from collaborating with Temu.[11] Temu further contended that in May 2023, Shein mandated that its 8,338 manufacturers supplying or selling on their platform sign exclusive distribution agreements, preventing them from offering their products on the Temu platform or to Temu-affiliated sellers.[11] Temu contends that these manufacturers linked to Shein constitute a substantial portion, estimated at 70% to 80%, of all merchants offering ultra-fast fashion products in the U.S., leading to higher prices, fewer consumer options, and hindered growth of the U.S. ultra-fast fashion market.[11] In October 2023, Shein and Temu requested that their respective cases against each other be dismissed without prejudice in Massachusetts and Illinois. Neither company offered further explanation or whether a settlement had been made.[25] In December 2023, Temu sued Shein, alleging illegal interference with its suppliers.[14] Consumer complaints According to Andrew Chow writing for Time, Temu is also starting to develop a reputation for undelivered packages and unresponsive customer service.[9] In addition to missed orders and product discrepancies, customers have also cited Temu for mysterious charges.[9] According to Sarah Perez writing for TechCrunch in relation to Temu’s advertising campaigns, “These ads appear to be working to boost Temu’s installs. But dig into the app’s reviews and you’ll find similar complaints to Wish, including scammy listings, damaged and delayed deliveries, incorrect orders and lack of customer service.”[15] A common concern for buyers on Temu is the low quality of product, often attributed to sellers delivering expired or outdated items.[26] Users have frequently voiced concerns over false product advertising.[9] In October 2022, the Boston branch of the Better Business Bureau opened a file on Temu and received 31 complaints from customers regarding the website’s service.[9] Intellectual property concerns Sellers on Temu face recurring accusations of infringing upon intellectual property rights.[12] Instances of design theft have also been reported.[27] Data privacy concerns According to Politico, “Apple said the company previously violated the company’s mandatory privacy rules and misled people about how it uses their data.”[28] Work culture Temu has also been criticized for having an intense workplace culture and encouraging a 996 working hour system.[29] This workplace culture has been connected to incidents of PDD Holdings employee deaths that have made international headlines.[29] United States government reaction See also: China–United States trade war In May 2023, the United States–China Economic and Security Review Commission raised concerns about risks to users’ personal data on Temu after Pinduoduo, its sister app in China, was suspended from Google Play because some of its versions, not available on Google’s app store, were found to contain malware.[30][31][32] Two days after releasing an update to remove the exploits, Pinduoduo disbanded the team of engineers and product managers who had developed them. According to a CNN source, most of the team was transferred to Temu, working in various departments, but a core group of engineers remained at Pinduoduo.[33] On 17 May 2023, Greg Gianforte, the governor of the US state of Montana banned Temu on government devices state-wide, along with ByteDance applications (including TikTok), WeChat, and Telegram.[34][35] In June 2023, the United States House Select Committee on Strategic Competition between the United States and the Chinese Communist Party stated that Temu does not maintain “even the façade of a meaningful compliance program” with the Uyghur Forced Labor Prevention Act to keep goods made by forced labor off its platform.[36][37][38][39] The committee’s report delivered a critical evaluation of Temu, suggesting that there is an “extremely high risk of forced labor contamination within Temu’s supply chains.