How Temu is transforming the online retail industry

A US government investigation found an "extremely high risk" that items sold on Temu may have been manufactured using forced labour, prompting legislators in the US and the UK to attack the online retailer.

Temu states that it "strictly prohibits" all of its merchants from using child, forced, or prison labour.

The firm, which offers everything from furniture to electronics to clothing, debuted in the US in 2022 before expanding to the UK and other countries.

Based on statistics collected by researcher SimilarWeb, it has topped worldwide app download rankings ever since, with less than 152 million Americans using it each month.

Temu ran six of the 30-second Super Bowl commercials this year, which typically cost about $7 million (£5.5 million).

SimilarWeb data indicates that 8.2 million individuals visited the website and app on the day of the Super Bowl, a roughly 25% increase in unique visits from the previous Sunday. Visitors to eBay and Amazon decreased by 2% and 5%, respectively, over the same time period.

Shaun Rein, founder of the China Market Research Group, describes Pinduoduo, a Chinese titan in e-commerce, as the owner of Temu.

"Throughout China, everyone buys products on Pinduoduo, from speakers to t-shirts or socks," according to him.

The business alternates positions with competitor Alibaba to become the most valued Chinese company listed on the US stock market. Right now, its value is a little less than $150 billion (£117 billion).

Pinduoduo, having captured the Chinese consumer market, used Temu as a springboard to grow internationally, according to the same business strategy that had achieved its prior success.

The goods for sale could not even exist yet, as the site frequently employs AI-generated photos to stay current with the newest trends, Ms. Durand of SimilarWeb said. They are then transported by air.

It implies that goods are not required to be kept. As soon as a plane is sent, it may fly directly to the buyer and doesn't need to stop at warehouses, according to Ines Durand.

Temu's products are therefore almost duty-free because they are transported straight from the manufacturing floors, eliminating the intermediaries.

Temu has also come under fire for its supplier chains; US and UK lawmakers have accused the behemoth of enabling products made using forced labour to be marketed on its platform.

Analysts anticipate Temu will continue to grow despite the scandal.

(Sources: bbc.co.uk)