Hacker News

So they dodge tax, sell things for less than market value, spend billions on advertising, have little regard for law... sound familiar? I guess the real issue is that it's not an established player in this space!

All of these problems are fixable if you're wiling to have your own corporations bound by the same laws. Start by not allowing products to be sold at a loss, making large corps pay the tax they're due, obey the law in regard to data privacy...

By allowing corporations to write the law they've inadvertently allowed foreign players to play them at their own game. This kind of company would not exist in a health market.

This is the best summary I could come up with:

Among the more everyday items are cleaning products, smartwatches, novelty T-shirts, knock-off sneakers and barbecue tools, but the common thread across all of them is that everything is incredibly, mindbogglingly cheap.

The company earned itself the nickname “the price butcher” during Black Friday sales last year, according to the China Project – and the total value of products sold on the site has gone from US$3m in September 2022, to US$400m in April.

The platform tells users to shop “like a billionaire”, and then gamifies the experience with interactive prize wheels and reward systems, and exploits buyers’ FOMO with countdown timers and rolling lightning sales and deals.

Unlike general retail, which imports large consignments of product, Temu’s logistics model for the US bundles individual customer packages together, USPS shipping labels attached.

Yang says if it wants to survive alongside giants like Amazon, the company must improve the shopping and delivery experience, and ensure higher and more consistent product quality.

“If the merchant economic dynamics continue to disproportionately favour the platform at the expense of sellers, and Temu fails to foster organic repeat purchases, its current rate of subsidized growth is untenable.”

The original article contains 1,280 words, the summary contains 191 words. Saved 85%. I'm a bot and I'm open source!

The platform runs in a similar way to Shein – offering a seemingly endless array of items direct from suppliers who make short production runs in response to customer interest. But it differs in that while Shein directly contracts suppliers to make the orders, Temu acts as more of a bridge, allowing suppliers to focus on their production run while the platform manages product listings, marketing, and logistics.

“Yet, this comes at a cost for sellers: they relinquish control over pricing, return policies, and long-term sales growth planning,” says Yang. “Under this model, Temu’s duration of payments to sellers is notably longer, and the cashflow pressures fall on sellers, not platform.”

I guess this means Temu will never actually need to raise prices to a level that is sustainable for the merchant, as long as there are enough merchants willing to deal with them as a platform. That is fucked up (and clever).

There was an article from a security research firm a little while back on Temu and how they posit the whole platform is elaborate malware. I find it hard to argue with a lot of their findings

https://grizzlyreports.com/we-believe-pdd-is-a-dying-fraudulent-company-and-its-shopping-app-temu-is-cleverly-hidden-spyware-that-poses-an-urgent-security-threat-to-u-s-national-interests/