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Hundreds of sellers from Chinese e-commerce platform Temu protested in front of the company in Guangzhou, southeast China, yesterday, arguing that it was unfair to impose fines for after-sales issues.
Videos posted on Chinese social media and local media showed that some protesters even entered Temu’s office and left only after police intervened.
The first protest took place on July 22, and a new demonstration took place on Monday with an increase in the number of participants, with an estimated number of protesters at between 700 and 800, according to private newspaper Caixin.
Temu, the international platform of local e-commerce company Pinduoduo, has rapidly expanded its business to 75 countries since its launch in September 2022, competing with Chinese rivals such as Shein, TikTok Shop and Alibaba’s international subsidiary AliExpress, and is known for providing high-quality products at very low prices.
However, Chinese sellers accuse the company of setting very strict conditions, including the above-mentioned fines, to prevent customers from complaining or requesting refunds.
Caixin quoted one of the protesters, a clothing retailer, as saying that the fines from Temu and the funds used for post-sales litigation accounted for about 35% of its total sales: “The prices from Temu brought us a gross profit margin of between 10% and 20%, so, after the fine, we’re ‘bleeding'”.
Hong Kong newspaper South China Morning Post cited another trader as saying Temu fined him 3 million yuan last year and took away almost all of his profits.
One phone seller in the southeastern city of Shenzhen said he lost about $80,000 to Temu because of fines and the company’s policy of letting customers keep products rather than return them when disputes arise, and said the company enforces fines of up to five times the price charged.
we are very sorry
“The traders refused to resolve the dispute through the legal and mediation channels stipulated in the contract. The situation is stable and the company is actively working with the traders to find a solution,” the company said in a statement cited by Hong Kong newspapers.
However, according to Caixin, some traders have handed their cases over to lawyers and lodged protests through market regulators.
Temu is under scrutiny from EU and US authorities, who are considering imposing tariffs on these Chinese platforms that sell at low prices.
According to local media reports, the e-commerce platform’s sales reached US$20 billion in the first half of this year, exceeding last year’s US$18 billion.
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