So, Ed, what's your 'off the record' opinion on this Chinese app?

That was an interesting question I got in a DM about the Chinese webshop Temu yesterday. Before giving you my answer, I'd like first to explain why the question is a strange one for me. It implies that my ‘on the record’ and ‘off the record’ opinions would differ. They don’t. I’m an independent researcher and writer and don’t have to please any specific organisation with my writing.

I don’t get paid for my writing. I earn my living through keynotes and study tours. Researching and writing is a way for me to increase my knowledge and keep it up to date so I can use it in those paid services.

The thing is, if you write a lot about Chinese tech firms and try to convince people that they should be paid attention to, it is often interpreted as support for those companies. That’s strange because that doesn’t happen when people write about Silicon Valley…

Those who know my writing know that I can be both fascinated by Chinese internet companies and highly critical of them as well. In the past month alone, I wrote articles about how Alibaba had many failures in new retail and Hema formats that you rarely hear about. I have also written many critical pieces about JD’s Ochama and other internet companies. My recent writing about Temu included a lot of information about the brand’s shady aspects.

There are many things not to like about these companies, just like there are many things not to like about Western companies. I don’t like how Alibaba lost its humbleness after its IPO. I don’t like how Baidu has put advertising income above integrity. I don’t like the founder of JD for his private behaviour. I don't like Ant Group for the way it pushed consumer credit full of conflicts of interest issues to its users. I don’t like how Pinduoduo’s Temu squeezes the margins of Chinese manufacturers. I could go on and on…

So, I don’t write about Chinese tech because I support it. I write about it because I think it’s fascinating. It's just like people who study and write about, say, climate change. They don’t support climate change but are fascinated by the topic and want a larger audience to learn about it. Same with my writing. I want a larger audience to know about Chinese internet companies because:

• They have invented business models that can inspire us,
• They are having a growing impact on the world (think Shein, TikTok and Temu)
• Much of what is written about these companies needs more nuance, depth, and detail and is often based on misunderstandings at best and fearmongering at its worst.

So, do I like Temu? Well, it’s not black and white.

I have placed three orders on Temu. I found the speed of delivery (1 week) quite acceptable, and the price is 50% of the EXACT same products on Amazon, often sold by the same factory/merchant. That’s not surprising because about 50% of Amazon's turnover disappears into Bezos & Co's pocket through all kinds of fees. In other words, we're buying the same stuff, only for half the price. The reasoning that we should not purchase junk on Temu but should shop at Amazon is therefore nonsensible, in my opinion.

According to my sources, Temu has stricter quality control than some other Chinese webshops. If that's true, then that's an improvement. Honest, independent reviews claim that most (but not all) of the purchases are value for money (but you shouldn't expect too much for those prices). Nevertheless, I would personally not buy some risky products on Temu (e.g., toys for children and pets).

Much of what is sold is what I would call ‘Action-like stuff’ (referring to the dollar-store style European retail chain). You don't actually need many of those things but can't pass them up because of the low price when you see them in the store or while browsing on Temu. My personal opinion is that such unnecessary consumption behaviour is very undesirable, whether it is at Action or Temu. But should we blame Chinese companies that have figured out smarter business models, using more efficient supply chains and logistics and cutting out middlemen, for being able to offer lower prices? As mentioned, we buy the same stuff on Temu and Amazon.

People keep asking, 'Why are these webshops so cheap?'. But you should be asking, 'Why is the price difference with Western webshops and offline stores so big?'. Or even, 'Why are Western shops so expensive?'. Just compare Western prices with the prices consumers in China pay for the same domestically manufactured products. You will find that shorter logistical chains and larger volumes produce less expensive goods. And that's what some of these Chinese webshops replicate by selling directly to large numbers of Western consumers.

Having said that, I personally don't think Pinduoduo/Temu is a very ethical company. The reason is that they determine both the purchase price (at factories) and the selling price (to the consumer) without being a retailer. They are taking all sales and marketing off the hands of the factories. But at the same time, they use an auction system where the factory with the lowest price gets the volume. And so, they push that cost price down further and further. They thus squeeze the manufacturer and potentially also cause a loss of quality. I have written about this extensively.

I don't browse for stuff on Temu, but three times I ordered something that I needed and thought Temu might have. And I am satisfied with the process and purchases. But all in all, I won't shed a tear if Temu were to disappear tomorrow. Because only some seem to be able to consume thoughtfully and because of the way Temu works with manufacturers in China (believe it or not, Shein is actually a much more ethical company that truly supports its suppliers).

Just as I am fascinated by Temu but don’t necessarily LIKE them, the same applies to Shein and TikTok. Both have highly interesting business models and apps. But both come with serious problems. Not necessarily because of the platforms themselves, but because of how WE USE THEM. We seemingly cannot consume responsibly when faced with low prices that result from these disruptive business models. We seemingly cannot avoid unhealthy usage of social media and apps (not just TikTok) and lack regulations to prevent such unhealthy usage. China does have such regulations for Douyin, its domestic version of TikTok. But when China gets it right by protecting its youth we refuse to learn from it and frame it as dystopian government interferance.

In all cases, I neither like nor dislike these platforms because of the arbitrary fact that they have a Chinese origin. And as such, I will continue writing articles that hopefully put some nuance in the public opinion about them.