Online shopping site Temu, owned by Chinese e-commerce giant PDD, has faced backlash from independent merchants in China who sell their products on the platform. The merchants staged a protest in Guangzhou, accusing Temu of unjust fines and withholding payment for goods sold. More than 100,000 self-employed sellers in China use Temu’s platform to sell cut-price merchandise, and the protest highlights the challenges faced by the company as it expands globally, including its recent entry into the Thailand market.
The protesters gathered at a Temu office to demand their money, with some claiming they were charged disproportionately high fines for poor customer service. Sellers reported fines ranging from one to five times the wholesale price of the product and disputes over payments totaling millions of yuan being withheld by Temu. One seller, who sells household goods, expressed desperation over the frozen funds and claimed to be on the brink of losing her family and business as a result of her experience with the platform. Despite the protest, a spokesperson for Temu downplayed the situation, stating that only a small number of sellers were involved and that the company is working to resolve the issues with the merchants.
Temu launched in the United States in 2022 with a focus on offering inexpensive products and attracting consumers with free shipping, free returns, and price adjustments. The platform quickly gained popularity, with over 600 million downloads of the app and aggressive expansion into regions like Latin America, the Middle East, and Southeast Asia. Analysts predict that Temu could generate $45 billion in gross merchandise value by 2024, a significant increase from previous years. However, the company’s rapid expansion has created discontent among sellers who struggle to make a profit due to high fines and lack of transparency regarding rules and penalties.
The discontent among sellers has been brewing for some time, with complaints about the challenges of turning a profit on Temu. Some sellers have reported difficulties in covering fines and maintaining margins, leading to frustration and anger among the community. However, the company maintains that most merchants on the platform experience success and benefit from increased sales and positive customer feedback. Despite this, sellers like Peng and Mi expressed concerns about the impact of fines on their businesses and the overall lack of transparency and communication from Temu.
As Temu continues its global expansion and focuses on marketing to consumers, it faces a delicate balance between meeting consumer demands for affordable goods and maintaining profitability for its sellers. The platform’s revenue projections indicate significant growth potential, but the ongoing protests and complaints from merchants suggest underlying issues that need to be addressed. The company’s commitment to fair enforcement and dispute resolution will be crucial in maintaining trust and cooperation with its sellers as it navigates the challenges of the e-commerce marketplace.
