China’s online retail firm, Temu is reportedly considering participation to a Europe-based program that targets the fight against the use of fake goods on the e-commerce platform. This effort is called the Memorandum of Understanding (MoU) on the sale of counterfeit goods on the internet and is supported by the European Commission, the major e Markets including Amazon, Alibaba and eBay and well-known brands such as Adidas and Nike.
Temu's Move to Authenticity Partnering Against Online Counterfeiting
Minutes accessed from Reuters show that Temu has planned to make its presentation in this regard at its meeting planned for November 11th. It is considered as an addition to increase its commitment to fight against fake products together with traditional ecommerce platforms and brands.
Speaking to the press, a spokesman for Temu stressed that the fight against counterfeit goods is best met in cooperation stating that the retail company is aware of the risks counterfeit presents to the online market. This requires the formation of partnership among ecommerce players to enable them effectively deal with counterfeiting.
This agreement is highlighted by Temu as EU authorities are turning up the heat on the company’s product regulation. The international party, particularly the EU, is demanding that Temu tones up its controls with regard to merchandise quality and origin for the consumers’ benefit.
Perhaps, joining this initiative will help Temu strengthen its position in Europe and finally calm consumers who can doubt the legitimacy of products being sold through its platform. While the retailer is experiencing pressures from the regulations, this move might be a tactical move of the company to build a sustainable competitive advantage in the ecommerce space.
European Commission Launches Investigation into Temu
On Thursday, Europe’s governing body formally opened an investigation in to the practices of one of China’s newest and most prolific online retailers going by the name of Temu for possibly flouting EU laws that cover the sale of unlawful products. This action was taken after the onset of an information request to Temu earlier this month under the DSA, which is focused on improving the digital safety and user protection.
As a subsidiary of PDD Holdings, Temu has seen substantial interest with both the European and the U.S markets through its associated extravagance in marketing campaigns. The platform’s slogan reminds “shop like a billionaire” and it offers virtually everything for a significantly lower price than the MRP.
The investigation shows that European Commission is pursuing the rule of law when it comes to its regulation and consumers by taking legal actions against companies which produce and sell such prohibited products. It has been noted in the United States that many users have begun visiting Temu’s website and app; such interest raises fundamental questions about the future of ecommerce as the Chinese player pursues its growth trajectory.
This new landscape of regulation henceforth lays down conditions for consumer trust which will be central to Temu as it complies with the EU laws. The investigation could also determine how other multinational retailers on the subject of compliance and advertising strategies plan on Europe.
It therefore has great implications for future growth of ecommerce in Region II given Temu’s growth trajectory and the issues of competitiveness and compliance with regulatory requirements in its wake.
Concerns Grow Over Temu's Role in Counterfeit Fashion
Temu has given itself a leeway in branding itself as a company that sells garments, shoes and handbags that are reminiscent of well-known brands but at lower costs. This business model has been frowned upon within fashion industry circles as many of the garments and accessories on the site are remarkably inexpensive for the brands involved.
An industry informant who preferred to speak on condition of anonymity spoke of their concerns in of the participation of Temu in the anti-counterfeit Memorandum of Understanding (MoU). They concern that if afterwards Temu signs the agreement it will compromise the authority of the network created for fighting counterfeit products.
In May, the European Commission assigned a ‘Very Large Online Platform’ status to Temu that entails higher obligations to meet under the DSA regimen. This status implies that not only Temu needs to strengthen its regulatory activities against violates and unlawful content, such as fake products, but also accelerate it as a marketplace.
This growth is confirmed by the fact that, in September, Temu had 92 million monthly active users in the EU confirming its growth and impact in the ecommerce industry. However, this popularity calls for extra attention as to the type of products it markets and whether it meets the set legal requirements.
It is unending the debates raise issues of online retailers and their prices and legal and ethical obligations they have to bear. While the Commission is still conducting investigations the outcome has significant potential to affect Temu or indeed the entirety of the ecommerce business.
