TEMU: Low prices that cost a lot

DR

With unbeatable prices, Temu is wreaking havoc in Europe. Behind this terrible success with a Chinese twist, a complex economic model that relies entirely on globalization: overexploited manufacturers and workers, unlimited planes and unbridled consumption.

Owned by PDD Holdings, Temu is a giant marketplace that doesn't sell its products directly, but creates a meeting between suppliers and consumers by ensuring the logistics that connect the two. And the golden rule is the one that gave it its name: “Team Up, Price Down”. The price of the product goes down if there are a lot of people buying it. Add to that omnipresent advertising (on TikTok in particular) and a clever avoidance of taxes, and you get a monster far more devastating than mass distribution.

Produce or die

Temu's catalog is flooded with products ranging from electronic gadgets to clothing and home accessories. In just two years, the company has become one of the major players in global e-commerce, already rivaling giants like Amazon. With discounts of 40 to 60% compared to its competitors (a Galaxy A14 at €180 ?!), the site quickly attracts millions of consumers, seduced by the low cost.

But how is this possible ? The answer lies in a formidably efficient business model. The platform applies a “consignment stock” strategy, which means that manufacturers are responsible for storage, unsold stock and logistics costs. Just that. A formula that shifts costs onto producers, often small or medium-sized, who have no choice but to participate in this system or disappear in the face of competition. This is modern exploitation that raises many ethical questions, particularly for workers in the Xinjiang region. While consumers rejoice in the low prices, and while Temu rubs his hands without assuming any burden, suppliers are literally crushed by demand and the working conditions necessary for the viability of the model. But they have to be filled, these 88 daily planes that transport some 9,000 tons of products for Temu and Shein (Ouest-France)!

Price and quality, we break everything!

With “cut prices” and tight margins, goodbye to quality. As reported by the media FrAndroid, many buyers report products that do not conform to online descriptions, are damaged or defective. While some low-priced items can be seen as impulse purchases without much consequence, others pose real safety risks, such as electronic equipment without CE certification or toys that do not comply with European standards. Not to mention potentially dangerous objects, illegal in Europe. For all these reasons, Temu has been the subject of a European investigation since October 31, 2024.

The investigation, in addition to looking at Temu's dubious business model, also looks at its application. Designed to be addictive, as TikTok can be, it is also a gigantic windfall of personal data. In short, Temu openly calls into question all the considerations that we could have had in recent years, whether economic, social or ethical.

By promising short-term benefits, Temu is above all participating in the erosion of a market model that is based on quality, safety and sustainability. If we let ourselves be seduced by the sirens of low-cost consumption, it will be the small and medium-sized producers here and elsewhere who will pay the price first, dragging down an entire model of balanced society with them.

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