What Do U.S. E-Commerce Platforms Have in Common? The Pinduoduo-Shihabi Data Controller’s Report on the USTR Listing and the Temu App
When asked about those claims, Temu’s spokesperson told NPR, “Merchants who have developed economies of scale and demonstrate cost efficiency thrive in Temu’s environment. Consumers looking for a combination of price and quality reward the ability to offer competitive prices as a result of reduced production and operational costs.
Last year, Pinduoduo changed its corporate name to PDD Holdings Inc., which is now the parent company of both Pinduoduo and Temu. Shares of PDD Holdings are listed on the Nasdaq exchange; at the end of stock trading last week, PDD Holdings closed at $127.48, giving it a market capitalization of $169.37 billion.
The USTR listing says that despite Pinduoduo’s claims of adopting new anti-counterfeiting initiatives, a litany of issues remains, including refusals to remove bogus products and “a further deterioration of Pinduoduo’s already ineffective seller vetting.”
“On average, some of them are going to be exactly the same, some of them are going to be coming from exactly the same sellers” that consumers might find at other retailers, The Atlantic’s Mull said last year. Some will be a little bit junkier. Others might use substandard materials that might not always pass muster in the U.S. for safety standards.”
A class action lawsuit was filed by users of the app, accusing the company of collecting data outside of what is needed for an online shopping app.
The bold decision to tout its months-old marketplace and app with high-profile TV ads came as the company sought a foothold in the U.S. market. Almost immediately, downloads and use of Temu’s app spiked, according to Momentum Works, a Singapore-based market research firm.
“Regarding the compliance issue of products related to forced labor, we attach great importance to it,” the Temu representative told NPR. “Our current standards and practices are no different from those of major U.S. e-commerce platforms. The allegations are completely ungrounded.
“Both Temu and Shein rely heavily on the de minimis exception to ship packages directly to U.S. consumers,” a congressional review found last year, “allowing them to provide less robust data” to Customs and Border Protection and avoid import duties.
De minimis is a legal term for something too insignificant in value to impose duties. The European Union has a threshold of 150 euros. The U.S. level used to be $200 but it went to $800 in 2016 when President Barack Obama signed the bipartisan Trade Facilitation and Trade Enforcement Act.
The impact of Temu on China Merchants Securities and the U.S. Post-Newtonian mail carrier demand for Chinese food and produce
The analysis of Temu by China Merchants Securities was cited in Chinese-language news media and was also included in an article by the transportation technology company, Temu. Temu is said to have pressured sellers to keep prices low.
One measure of the retailer’s impact is U.S. mail carriers, including one who recently said that she was being tired because of delivering more of the company’s packages each day.
The company recently reported $170 billion in net quarterly sales, which included $70.4 billion from its online stores and $43.5 billion from third-party seller services.
Compared with Shein, T is more focused on home goods and plasticware. It is one of the biggest threats to Amazon’s domination.
Temu’s strategy follows a model that Pinduoduo, the huge Chinese retailer behind Temu, honed when it streamlined connections between farmers and consumers in China’s food and produce sector. In 2022, the U.N. Food and Agriculture Organization said Pinduoduo allowed “more than 16 million farmers to sell their produce to 880 million consumers who shop on the platform.”
The most significant expense and inefficiency in retail operations are often addressed by the way goods are delivered directly from the source.
Temu aggressively markets “hot deals” — such as a hooded button-up fleece jacket currently going for $8.32 or a car-mounted vacuum cleaner selling for $13.48. Eye-catching prices like those are frequently cited in its online ad campaigns.
“In less than a year, this business has spun up an online retailer that is, like, 75% the size of [Target.com], which is enormous,” The Atlantic’s Amanda Mull told NPR last fall, citing Temu’s $16 billion in revenue in 2022.
