A merchant involved in the protest told Reuters that hundreds of Chinese vendors on Temu have complained against what they consider to be excessively large fines levied by the company. This is a new indication of a fierce pricing battle with low-cost rival Shein.
PDD Holdings owns the worldwide e-commerce platform Temu. The platform offers an extensive range of products at extremely low costs, many of which are manufactured in China. Since its launch in September 2022, its popularity has increased. Additionally, competition has grown with established e-commerce players like Shein and Amazon in the United States and other areas.
A Guangzhou-based clothing retailer reports that Temu implemented additional fines in April. These fines can total up to five times the sale price when buyers return their items for a refund.
“I’m fine if I must refund consumers… what vendors want is for Temu to stop fining us without a reason,” the 25-year-old garment seller from Guangzhou said. She added that she went to Temu’s headquarters in Guangzhou on Monday to protest.
“To calm things down, Temu told us to register the amount of fines we need to pay, but they did nothing afterwards. So, more vendors gathered on July 29 and there were about 400 to 500 people,” she said. Because of the sensitivity of the situation, she declined to be identified.
Online videos of the incident also purported to show hundreds of demonstrators outside the facility.
In a statement, Temu noted that most of the demonstrators were clothing vendors who also do business on Shein. Moreover, Temu is actively collaborating with these vendors to find a resolution.
The statement added that the merchants were dissatisfied with how it handled post-sale concerns about the quality and compliance of their products. “These merchants have declined to resolve the disputes through the normal arbitration and legal channels stated in the seller agreements,” the statement read.
The clothing dealer claimed that some vendors have failed or gone bankrupt since Temu began the process. Additionally, there have been fines for various problems, such as incorrect clothing sizes.
“I’m a small seller. My estimate was I would need to pay a fine of 110,000 yuan ($15,231), but when I got the number, it was 290,000 yuan,” she said, adding her items sell at just 20 or 30 yuan each and she was not yet making enough profit to pay her fines.
Another Guangzhou seller who demonstrated on Monday, Penny, claimed she was unable to leave Temu at this time.
“I can’t simply quit Temu because I have workers to pay and clothes worth several million yuan in the warehouse. I have no way out,” she said.
According to Temu, most of its merchants report improved sales and favorable client feedback as a result of following its rules for success.
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