1 week Ago By Varun Godinho
Chinese e-commerce platform Temu which has millions of users in Australia is being investigated over misleading sales practices. The European Commission and national regulators, including Belgium, Germany and Ireland, have jointly demanded that the platform halt “problematic practices” that have the potential to mislead consumers and are in violation of the EU’s product safety rulebook. These activities include posting fake discounts and reviews, forcing customers to play a “fortune wheel” game while hiding essential information about its conditions, displaying misleading information and hiding contact details for customers to file questions or complaints.
The latest investigation comes alongside a separate probe opened by EU last month that is looking into whether Temu is doing enough to combat sales of illegal products on its site. Temu sells items from clothing, bedding, coffee makers and shoes to toys, luggage and electronics. “Although we have gained popularity with many consumers in a relatively short time, we are still a very young platform and are actively learning and adapting to local requirements,” Temu said in a statement.
“We will fully cooperate with this investigation, as we believe that such scrutiny benefits consumers, merchants, and the platform in the long term.” Last month, research firm Roy Morgan indicated that as many as 3.8 million Australians aged 14+ made a purchase at least once from Temu over the previous 12 months.
In the 12 months to June this year, Temu is believed to have had sales of A$1.7 billion in Oz. While Temu started selling in Australia only in March last year, some customers have already called out the poor quality of the company’s goods.
A few have also raised questions about the company’s ethics and the conditions of the workers who make these ultracheap products. Others have complained about poor-quality packaging, which they said had left items damaged upon delivery. Some countries, such as Indonesia, are even reportedly asking Google and Apple to pre-emptively block Temu from their local app stores as authorities in the country are concerned that local retailers will be hit once Temu which sell ultra-cheap products is allowed to begin shipping into the country.
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