Why does the United States (and not only) fear the Chinese Temu?
It promises to give the opportunity to "shopping like a billionaire" but at rock-bottom prices (in defiance of pollution and quality). In the United States people spend more time there than on Amazon and Shein, and this, more than anything, worries the government because it fears for cybersecurity and the data of users who have gone crazy for Temu, the Chinese e-commerce that is also conquering Italy
Since its debut in the United States in September 2022, Chinese e-commerce company Temu has come a long way. Born in Shanghai and son of Pdd Holdings, which also owns Pinduoduo (another e-commerce giant made in China that has ended up in the crosshairs of the US authorities), he distanced himself from the parent company and his homeland by opening an office in Boston for US customers and one in Ireland for those in the rest of the world.
But the doubt remains that user data will come into the possession of China.
THE TEMU BOOM IN THE WEST
Clothing, children's toys, surveillance cameras. Whatever a user is looking for, Temu will find it. And you will find it at a negligible price compared to competitors of the caliber of Amazon. Chinese e-commerce, which offers everything and more, has expanded to Western countries in the last year. First in the United States and then in a dozen EU countries, including Belgium, France and Germany, last April.
Globally, the app has been downloaded over 50 million times on Google and, according to SimilarWeb , as of early July, on the Apple App Store it was the most downloaded in Belgium, France, Italy, Germany and Portugal and second in Sweden, the Netherlands, Poland and the United Kingdom. It was also the most downloaded on the Google Play Store in Belgium, Portugal, Ireland and Sweden.
NUMBERS IN THE UNITED STATES
Having landed in the States in the autumn of 2022, Temu after a month had 4.5 million monthly active users. At the beginning of 2023 it gained some publicity during the Super Bowl and last July it had accumulated 77.3 million monthly active users, more than double compared to the beginning of the year, according to the consultancy GWS Magnify cited by DW .
THE SECRETS OF TEMU'S SUCCESS
Behind Temu's success there are two ingredients: very low prices and an aggressive advertising strategy. The former can be guaranteed because e-commerce has eliminated the link in the chain that connects sellers and buyers, i.e. the destination warehouses, allowing sellers based in China to ship directly to customers. The second ensured that the app became rapidly known, taking advantage of events such as, for example, the Super Bowl which is the most followed sporting event of the year in the USA, as well as the classic Facebook, Instagram and TikTok channels, on which special campaigns are created that involve users and, consequently, increase their number.
Pdd Holdings posted revenue of 52.3 billion yuan ($7.2 billion) in the second quarter, beating the average estimate of 43.3 billion yuan. A significant achievement at a time when China is facing a real estate crisis, the collapse of foreign investment, a record level of youth unemployment and the historic start of population decline.
CONCERN ABOUT CYBERSECURITY AND PRIVACY
But Temu's rapid rise is a wake-up call for security officials concerned about the role of Chinese technology in the West, says Politico . The app's opaque privacy and cybersecurity practices, the suspension of its sister app Pinduoduo from the Google Play Store due to suspected malware, and Beijing's potential access to Temu data are worrying cybersecurity and privacy experts.
“Apps collect tons of data about all of us, and what happens when this data ends up in the hands of an authoritarian government whose economic and national security interests often conflict with those of the West?” Lindsay told Politico Gorman, head of the technology and geopolitics team at the German Marshall Fund (GMF) think tank.
Precisely because of this fear, the governments of the United States, United Kingdom, Canada, Europe and other countries decided earlier this year to ban the use of TikTok on the phones of government officials, and the Chinese technology has been blocked by many projects infrastructure in the West, such as 5G networks.
“It's almost impossible to guarantee that the data doesn't end up in China,” Gorman told DW . “All technology platforms, to one degree or another, recognize data as a strategic asset” and “Chinese platforms have been more brazen in spying on users,” he added.
The real question in her opinion is what kind of data it is: “Why does an e-commerce platform need access to information about Bluetooth and Wi-Fi networks? This is the real issue regarding privacy."
Yet, according to Canadian analyst and writer Bruce Winder, although people are aware of the privacy risks, inadequate labor standards and environmental damage caused by unscrupulous giants, they are "willing to take the risk" and “to turn a blind eye to other potential social risks because they are financially desperate.”
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-gli-stati-uniti-e-non-solo-temono-il-cinese-temu/ on Sun, 10 Sep 2023 05:02:22 +0000.