In recent years, e-commerce has profoundly transformed people’s shopping habits and reshaped global trade. With only a click of a button, consumers can access a vast option of products from around the world that can be delivered to their doorsteps in just a matter of days. E-commerce has expedited globalisation by raising the value of commodities exported and imported, resulting in higher productivity and cost savings for businesses and consumers (Gamova, 2022). One of the notable players in this transformation is Temu*, a Chinese e-commerce platform that has gained attention due to its unique business model. Unlike traditional e-commerce companies, Temu cuts out middlemen and ships goods directly from the manufacturer to the consumer, allowing it to disrupt the e-commerce industry. In 2023, Temu became the most downloaded app in the US and positioned itself as a force in drawing greater engagement times against established platforms like Amazon (Perez, 2023). However, Temu’s rapid growth has been anything but without controversy and has brought significant concerns for consumer protection and regulatory challenges. Despite the site’s inexpensive prices and lightning-speed shipping, the appeal of “shop like a billionaire” and “fast fashion” facades hide serious security flaws and threats (Rinaldo, 2024). It is noted that the platform has faced over 30 complaints to the Better Business Bureau (BBB) due to issues like unresponsive customer service, undelivered packages, and unexplained charges (Balasubramanian, 2024). This article discusses how Temu’s business model affects consumer rights and trade policies, with a focus on the need for increased consumer protection in the digital economy.
Temu’s disruptive rise in the global e-commerce market has so far changed not only how customers behave but also how international trade policies meet the challenge. This platform, with its low costs and direct-from-manufacturer shipment model, has compelled several established players to rethink their competitive game. Koutsou-Wehling (2024) noted that other eCommerce such as Amazon, TikTok Shop, and Wayfair have taken a more cautious approach to Temu’s emergence, especially on price offer competition. While the model offers considerable cost advantages, it also raises quite tricky questions regarding regulatory oversight of consumer rights. The absence of traditional intermediaries—retailers or third-party suppliers—means that Temu has less oversight in terms of product quality control and consumer redress in case of faulty or counterfeit goods. For consumers, one of the most significant difficulties with Temu’s business strategy is the lack of transparency regarding product sources. Temu frequently circumvents established quality assurance protocols imposed by regular e-commerce platforms such as Amazon or eBay by shipping straight from manufacturers. This raises concerns regarding product safety, counterfeit risk, and the accuracy of product descriptions. Pant (2024) expresses that the site employed misleading design tactics to mislead customers, such as redirecting clicks on product results to displays with altered quantities, pricing, or altogether new products. Attempting to terminate users’ accounts exposed the various procedural roadblocks users had to negotiate.
In addition, consumers may have limited recourse in cases of defective or low-quality products because there are no obvious points of contact for returns or refunds, particularly given the cross-border nature of the transactions. Thus, from a regulatory standpoint, Temu’s approach has posed challenges to the effectiveness of consumer protection laws and emphasizes the critical necessity for strong consumer protection regulations in global e-commerce. As Goyens (2019) asserted, with worldwide and cross-sector networks of enforcement agencies, a digital planet-proof consumer policy that emphasises robust enforcement of consumer rights is required to adjust to globalisation and digitalisation. Unfortunately, the existing consumer protection frameworks were primarily created for traditional business models including intermediaries, and these regulations sometimes fail to account for the intricacies of direct-to-consumer platforms such as Temu. Numerous consumer protection frameworks, including Indonesia’s Consumer Protection Law, predominantly concentrate on conventional commerce and fail to address the distinctive elements of digital transactions, such as data privacy and security issues during online purchases, especially in emerging markets where e-commerce is swiftly advancing (Agustiawan et al., 2022). Since Temu operates globally, free of local legal frameworks, a “regulatory gap” opens the door to bypass or the inability to apply consumer protection regulations.
Institutions like the World Trade Organization, in this regard, can serve as critical facilitators for international cooperation and the making of standardized rules applicable to cross-border e-commerce. The WTO could work in the establishment of comprehensive guidelines for digital trade so that consumers’ rights would be well respected regardless of where the platform is based. Although the WTO has been working on establishing regulations for consumer protection in digital trade through its Joint Statement Initiative (JSI) on Electronic Commerce, a universally accepted framework that comprehensively addresses all aspects of consumer protection in this area is still lacking, resulting in gaps that may be exploited. To further enhance WTO’s current work, several key improvements can be made.
This includes setting clear guidelines on how consumer data should be handled that ensure privacy rights are respected in all member countries. At the same time, ensure regular review of existing regulations on their relevance with emerging challenges in digital trade. The fast speed of change brought about by technological sophistication has to be counterbalanced by laws that offer constraints for the unforeseen circumstances that can also follow.
Temu’s rapid rise to fame underlines both the transformative potential of the digital economy and the urgent need to address the better trade regulation concerning consumer protection. By cutting out intermediaries and offering ultra-low-cost goods, Temu has disrupted traditional e-commerce models, forcing competitors to adapt while exposing regulatory shortcomings. The absence of transparency, for instance, or accountability on the part of suppliers and procedural difficulties faced by consumers themselves undergird the call for an updated framework that can respond to cross-border digital transactions’ many challenges. Organizations such as the WTO must take leading roles in establishing harmonized standards in e-commerce, guaranteeing consumer rights, and ensuring data privacy, and product safety. While initiatives like the Joint Statement on Electronic Commerce are steps forward, they must evolve alongside the fast-changing digital landscape. Strengthening global trade governance through clear guidelines, regular reviews, and robust enforcement is essential to ensure platforms like Temu operate responsibly and equitably in the global digital economy.
*Comment provided by Temu
1.Temu’s regulatory deficiencies in product quality control & Misleading website design (Para 2)
Temu is an online marketplace that connects consumers with independent third-party sellers. At Temu, we employ a comprehensive approach to quality control on our platform that aligns with the requirements of the markets we operate in. The process begins with the onboarding of sellers, where they are required to submit the necessary documentation and sign agreements, affirming their commitment to product safety as well as adherence to regulations in various markets. After that, we conduct spot checks to verify that the physical products match their descriptions and adhere to relevant standards. Ongoing monitoring and collaboration are also part of our continuous efforts. If products are suspected of non-compliance at any step, Temu quickly may suspend the listing, request more documentation, or remove the product. Accountability and penalties are clearly defined within Temu’s quality control framework. We continually guide sellers on the need for strict product safety compliance, ensuring they are fully aware of their responsibilities.
Regarding account cancellation, users can complete the process by clicking on user avatar of our app or website, going to “Settings” > “Account Security,” and selecting “Delete your Temu account” at the bottom of the menu. The guide link: https://www.temu.com/support/c3/can-i-permanently-delete-my-temu-account-f-54-s-124.html.
2.Customers’ limited recourse in cases of defective or low-quality products (Para 3)
At Temu, consumers can shop confidently with our 90-day money-back guarantee for items that do not arrive, arrive damaged, or are not as described, with the first return of every order being free. Customers can contact our customer service for any assistance through the app or website.
3.Data and privacy issue (Para 1 & 3)
At Temu, protecting the user’s privacy is a core principle. We are always transparent about the potential collection of data, and only collect the minimum information necessary to offer and enhance our service for customers. As a TrustedSite Certified Secure Site, Temu implements industry best practices for protecting payment information, strictly following industry standards (PCI DSS) and collaborating with major payment networks like Visa and MasterCard.
