What's the deal with Temu?

Unless you’ve been living under a rock, you’re probably familiar with the shopping app Temu. From social networks to IRL gatherings, everyone’s talking about the popular app. Temu offers extremely low prices for goods ranging from socks to power tools and guitars and everything in between. With inflation and the rising costs of everything, it’s no wonder that the cheap shopping app has seen such a meteoric rise.  

As so many opinions and questions continue to circulate, we decided to dive in. The three main questions we’re hearing are:

1. What exactly is Temu?
2. Is Temu legit?
3. Is Temu ethical?

We’ll preface this deep dive with a general rule of thumb: if something seems too good to be true, it probably is. Now onto the nitty gritty:

What is Temu?

Temu (pronounced tee-moo) is a shopping app owned by a company called PDD Holdings. It’s an online marketplace, much like Amazon, and doesn’t manufacture its own products. Temu was founded in September 2022 and rapidly overtook Walmart and Amazon to become the most downloaded app in the Apple App Store. At the time this blog is being posted, Temu is still #1 in the Apple App Store. 

Temu is owned by PDD Holdings, the parent company to Pinduoduo - China’s second most popular e-commerce app. Temu claims to be based in Boston, Mass, and in fact they do own a warehouse there, but all business operations are conducted from China. As of May 2023, PDD Holdings moved their headquarters from Shanghai to Dublin in an attempt to boost its international presence. There’s nothing inherently sketchy about the move; in fact, plenty of technology companies relocate to Ireland for their low corporate tax (12.5%) and European Union membership. However, we believe it’s important to note how Temu markets itself and pay attention to little red flags. Boston-based? Not exactly.  

Speaking of marketing, Temu is pretty skilled in that area. From a Super Bowl ad to network marketing (not unlike MLMs) to games that trigger our brain’s reward center, Temu’s target audience is everyone, and they’re finding clever ways to reach us. Temu has a “growth at all costs” strategy. They incentivize customers by rewarding them for signing up their friends, earning discounts and free items. Like many companies, they use an algorithm to target consumers with specific items tailored to their shopping habits. If the phrase “growth at all costs” doesn’t send your red flag right up the pole, we’re not sure what will. This leads us to question two:

Is Temu legit?

In many ways, yes. Despite some negative online reviews, most consumers do receive the products they order without issues. At such low prices, you can expect low quality goods, and customers seem to understand that. Temu is an actual marketplace that delivers what it says it will, and it’s backed by trusted, secure payment methods like Apple Pay, PayPal, and more. 

You can find brands you know and trust on Temu, too. Popular companies like Lenovo Audio and Novo makeup sell their products on the app, boasting 4.8- and 4.9-star ratings, respectively. Reputable brands like these lend Temu legitimacy by partnering with the marketplace. As long as you read the product description (especially the product dimensions) and are cool with the return policy, you likely won’t be disappointed.

By now you’re probably wondering how Temu is able to sell products at such a low cost. Temu’s slogan, “team up, price down” describes their economies of scale strategy. If more people buy a product, manufacturers can produce and sell it at a lower cost. Manufacturers can capitalize on the massive reach of the platform, selling to the millions of users there and cutting the cost of wholesalers.

As more sellers enter the Temu marketplace, they’re forced to lower prices to compete and capture the consumer demand. The key to the app’s success is that Temu is able to capitalize on the giant network of its parent company, PDD Holdings, lowering their supplier prices. Temu claims that its low prices are a result of a "deep network of merchants, logistic partners," and the parent company's "established ecosystem built over the years." Temu currently operates at a loss; their strategy is to maximize their market share now and reap the rewards in the future. 

As a side note, Temu’s strategies are likely to have an impact on the US economy: when more people turn to the ridiculously low prices Temu offers, domestic companies have to lower their prices to remain competitive. This will ultimately push more manufacturing jobs outside of the US. 

Based on everything we know, we can conclude that Temu is indeed a legitimate marketplace for discount goods. But that leads us to our final question:

Is Temu ethical?

We wouldn’t shop there, and we’ll tell you why. Are you familiar with the ongoing Uyghur genocide in China’s Xinjiang region? This area is home to about eleven million Uyghur people – a mostly Muslim, Turkic-speaking ethnic group – who have endured torture, cruelty, and inhuman conditions at the hands of the Chinese Communist Party since 2014. 

The abuse intensified in 2017 when the Chinese government arbitrarily detained more than one million Muslims in reeducation camps. According to a June 2023 committee report from the House of Representatives, “The Committee received first-hand witness testimony and expert reports about the CCP’s atrocities, which include imprisonment, torture, rape, forced sterilization, and the widespread exploitation of the Uyghur people in forced labor.” Goods made by these enslaved laborers are sold all over the world, and the committee is confident that Temu is a supplier. The United States has banned imports from the Xinjiang region through the Uyghur Forced Labor Prevention Act (UFLPA), but the legislation isn’t perfect. 

Temu, SheIn and similar platforms use a loophole in the American tax code that allows goods to come into America without tariffs as long as the items cost less than $800 and are addressed to an individual.

So, what does this mean? Temu and Shein are responsible for 30% of all packages shipped to the US daily under the de minimis provision. These packages are exempt from screening for Uyghur Forced Labor Prevention Act (UFLPA), and Temu “denies responsibility for ensuring that its 80,000, mostly China-based sellers do not sell products produced with forced labor.”

Temu has no system for auditing its sellers to verify that their products are not made by forced labor. The company also allows products from Xinjiang – the location of the ongoing genocide – to be sold on its platform. Our takeaway here, and the biggest red flag of all, is that when you order from Temu, you face an extremely high risk of purchasing from and enabling a system of abuse and slave labor. For this reason alone, shopping Temu is a hard no for the Passion Lilie team. 

Credit: AFP via Getty Images

A second major reason we choose not to shop Temu is that overconsumption is never ethical. With the gamification of shopping and a powerful algorithm keeping consumers plugged in, Temu has captured a huge share of the market. Their cheaply made products are not built to last – often ending up in a landfill in the form of a return or as quickly damaged, discarded junk. 

The speed and demand of brands like Temu and Shein lead to cut corners and no regard for global ecosystems. Overproduction and overconsumption are stripping the earth of natural resources, destroying animal habitats, and contaminating water sources. Overconsumption is directly related to high levels of pollution and toxic gases that are rapidly exacerbating global warming. 

Passion Lilie advocates for ethical consumption by getting as much use out of the things we have before we purchase something new. We try to take excellent care of our clothes, repair them when they break or tear, and recycle them into something new when we can no longer use them for their original purpose. 

When we do need to buy something new, we know that the best way to shop ethically is to buy from companies whose supply chains we can trust to be sustainable and humanitarian. We would never knowingly risk the life or wellbeing of another human for our clothes or goods. It’s just not worth it.

Before you download the Temu app or start filling your Shein cart, we hope you’ll consider the impact your shopping can have. Look for companies that tell you exactly where their products are made, and by whom.

Here at Passion Lilie, we want to share our story with the world. We want you to know who makes your clothes. We want you to know about the environments in which they work and how we support their craft. On our website, you can easily find out about how we choose our partner groups, information about their opportunities for growth, pay and benefits. If you want to know more about the fabric your garments are made of, we’ve got that too! You can learn how fabric is sourced from farm to loom, you can read about our eco-friendly dying process, and even our conscious transportation methods. We hope you’ll seek out this information from ALL the brands you support. Make sure their values align with yours before you hit “complete purchase” or start playing games on the Temu app.

Sources:

• https://www.cfr.org/backgrounder/china-xinjiang-uyghurs-muslims-repression-genocide-human-rights
• https://selectcommitteeontheccp.house.gov/sites/evo-subsites/selectcommitteeontheccp.house.gov/files/evo-media-document/fast-fashion-and-the-uyghur-genocide-interim-findings.pdf
• https://www.reuters.com/business/retail-consumer/key-trade-loophole-keeps-cheap-chinese-products-flowing-us-2023-08-04/#:~:text=This%20happens%20thanks%20to%20a,TikTok%27s%20new%20e%2Dcommerce%20business.
• https://time.com/6243738/temu-app-complaints/
• https://www.bbb.org/us/ma/boston/profile/online-shopping/temucom-0021-553943