It’s hard to go online these days and NOT find ads for ultra-fast fashion brands Shein and Temu. Both online shopping platforms are exploding in the U.S., with millions of monthly users each in America, all looking to the sites for super cheap prices on a variety of goods. Shein focuses on clothes for the most part, while Temu offers up just about any product you can imagine. The prices are typically rock bottom, which makes it really tempting to pull the trigger and try them out. But is that a smart move? What are these companies all about, and are they safe to deal with?
Just the Facts
First, let’s discuss how they can sell so many things for such low prices. They both have ties to China: Their businesses originated there and rely heavily on manufacturers.
Shein was started in China and is based in Singapore. Temu is owned and operated by the Chinese-based PDD Holdings, which also owns Pinduoduo, an online commerce platform in China. Temu no longer mentions PDD Holdings on its website and now says it’s based in Boston. That matters because Pinduoduo was found in a recent CNN investigation to have the ability to spy on its users, with the ability to circumvent users’ mobile security to see what they’re doing on other apps, read their messages, and even change settings.
Again, that company is not the same as Temu. Still, the fact that the same company owns it is enough to cause hesitation since U.S. policymakers are working toward restricting technology linked to foreign entities. It’s important to know that these apps could present a privacy risk you might want to evaluate before placing an order. You’re essentially forfeiting your personal information and browsing habits without knowing how the companies might use it.
They Got Issues
Beyond that, both companies have issues, including data risks and controversies. They’ve both been accused of being linked to the use of forced labor, exploitation of trade loopholes, product safety hazards, or intellectual property theft. A U.S. congressional commission called both companies out for each of those allegations. Their business models are different, though.
Temu is an online store that carries merchandise from independent sellers. Shein commissions its goods through manufacturers it teams up with. However, some accuse the companies of not doing enough to stop their manufacturers or sellers from using forced labor to attain the products at such cheap prices. U.S. lawmakers say the companies don’t even attempt to meet compliance programs that prevent goods made by forced labor from being sold on their platforms. Temu does claim to have a third-party code of conduct that stresses the company has a zero-tolerance policy for vendors that use forced labor to manufacture products. Vendors must comply with local wage and hour laws, though there are no audit or compliance programs to check that on Temu’s end.
U.S. lawmakers say Temu keeps its costs down by evading import duties, tariffs, and U.S. Customs inspections.
But Wait, There’s More
The quality of the goods from both companies is also questionable. The common phrase ‘you get what you pay for’ definitely applies. There are exceptions, of course, but product quality is often unpredictable. These are not items that are built to last by any means. As long as you know that going in and are okay with it, you’ll likely be fine with the product when it arrives.
These companies are also facing legal issues – with each other. First, Shein filed an impersonation scheme lawsuit against Temu in Illinois, accusing the latter of “willfully and flagrantly infringing exclusive and valuable trademark rights and copyright rights.” The lawsuit accused the company of deceptive business practices, impersonating the brand on social media, and using images owned by Shein for the Temu product listings. It also accused Temu of paying influencers to spread false statements about Shein products.
Then Temu turned the tables and took Shein to federal court, filing an antitrust suit alleging that Shein forces manufacturers to sign loyalty oaths certifying they won’t do business with Temu. Their attorneys claim it hurts the retailer’s growth potential in the U.S. As of the end of October, both had shelved their lawsuits against each other, though reasons weren’t given.
The Bottom Line
Beyond all these issues, the bottom line is that both brands offer products at a bargain, which is very attractive at a time when the economy is struggling and Americans’ wallets are tight. Both companies generate billions of dollars in revenue and remain popular because of their low prices.
So, if price matters more to you than privacy when deciding whether the discounts are worth it, keep in mind what the deals may actually cost you. The convenience and bargain both come with potential risks. It’s hard to say yet whether it’s worth the savings, so carefully consider the value of your security, privacy, and values and purchase with caution.