IT'S TIME FOR TEMU TO BUY THE BUS TICKET ... AND PAY THE FINE

Reuters today reported: "The European Commission on Monday said Chinese online marketplace Temu was breaking EU rules by not doing enough to prevent the sale of illegal products through its platform. The EU's findings could ultimately lead to a fine of up to 6% of Temu's annual global turnover, the Commission said."

I've been doing presentations about Temu since before they even launched in Europe. After explaining the business model of the platform and the importance of its parent company, Pinduoduo, I would always conclude with the section in the video below, taken from my keynote in May 2024 at SCORE! in Zürich.

During my research for the recurring Temu Watch reports for Tech Buzz China, I once came across a quote from a TikTok Shop employee. TikTok was under scrutiny for the controversies surrounding its video app and attempted to comply with all regulations. Meanwhile, this person said about its competitor, 'Temu is getting on the bus and buying the ticket later'. The TikTok employee meant that Temu would simply launch their webshop and worry about compliance later, the opposite of what TikTok had to do.

While there have been numerous misunderstandings and even dubious slander about the platform by the likes of shortsellers, there is enough to criticise Temu about. Among these things is the quality and safety of their products. Another part of the EU investigation centres on forbidden online marketing practices (many of which we have also seen with companies like Booking).

It's taken a long two years, during which Temu was allowed to build its European market, but it's good that the EU now makes it clear that this is unacceptable and Temu has to play by our rules. As I often say, these Chinese platforms are used to a domestic government that can be extremely harsh in legislation and penalties. Unless we make the boundaries very clear and enforce them, these players will try to get away with anything. We have to be just as tough.

Recently, a Temu staff member posted on LinkedIn defending the quality of products on the platform. And while I know Temu has been working to improve in the past 12 months, I commented that you only have one chance to make a good impression. The first impression Temu made was not a good one. The post was deleted soon after.

Now it's time to buy the bus ticket, pay the fine for dodging fares, play by the rules and show that you can still survive when being a respectable player.

-Ed