Starting on May 17, Temu merchants launched a series of complaints and protests against the lines. Across social media platforms such as WeChat Moments, Temu groups, and Xiaohongshu, angry merchants sought channels for redress, even protests with banners in front of the headquarters, creating a tense atmosphere.
Shocking Fines
In April, Temu significantly increased fines for merchants, often without clear explanations. Merchants reported that the penalties were entirely at the platform’s discretion, and no detailed breakdowns were provided. Fines could be related to shipping times, after-sales service, or unreasonable customer demands. In short, all merchants had to bear these fines.
Evidence provided by some merchants showed that products priced at just over 20 RMB could incur compensation fees as high as 140 RMB per order. Such high fines caused widespread fear among merchants. According to information from the protest groups, some merchants faced fines ranging from tens of thousands to hundreds of thousands of RMB, with some even forced to shut down.
Many traditional factories, trusting the platform and the promises of recruitment staff, had eagerly transitioned to cross-border e-commerce, reduced inventory, and increased production, only to be struck by unexpected fines.
Merchants stated that there were almost no avenues for appealing these fines, making them feel powerless and frustrated by the arbitrary and opaque penalty system.
No Intent for Long-Term Partnership?
Online rumours suggest that Temu has no intention of fostering long-term partnerships with merchants. Instead, the platform aims to retain all profits, preventing merchants from maintaining high profits to enhance market competitiveness. Many merchants believe that being a supplier for Temu only allows for short-term gains. Over time, the platform would inevitably lower prices, not wanting partners and merchants to keep high profits.
Additionally, some netizens believe Temu views all merchants and suppliers as adversaries. While internal communication within Temu is enthusiastic, communication with merchants and suppliers is cold and unresponsive. The company encourages and supports employees to avoid answering difficult questions directly. For example, in the system settings, merchants cannot see if their messages to Temu have been read, but Temu can see if merchants have read their messages.
Executive Backgrounds and Regulatory Concerns?
Netizens also discovered that over 10 Temu’s Senior executives had previously held significant positions in national or local market supervision administrations, courts, the Ministry of Information Technology, and the Bureau of Industry and Commerce. This raised concerns about potential conflicts of interest and regulatory breaches.
In February of this year, someone publicly reported on Weibo that some executives at Temu violated regulations by taking positions in enterprises related to their former work within two years of resigning from public office. The report highlighted that in 2022, Pinduoduo received 82,782 complaints but faced zero administrative penalties, calling for an investigation into possible collusion.
With such a powerful executive team, netizens predicted that the merchants’ protests would likely yield poor results. However, desperate merchants continue to fight for their rights as a last resort.
Rebuild Trust
As a pioneer in refund-only policies, Temu has rapidly grown in the e-commerce industry. However, this growth has come at a cost. While customers are essential, merchants are the platform’s lifeblood, providing continuous energy and support. Temu must acknowledge merchants’ legitimate demands and provide them with sufficient profit margins to ensure the platform’s solid and sustainable development.
For instance, Temu should clearly state the reasons and amounts for fines, provide detailed breakdowns, and establish an appeal process to allow merchants to defend themselves. They should also improve communication methods with merchants, offering more support and services to build trust and a sense of belonging.
In short, Temu should achieve mutual success and respect its contributions by improving its relationship with merchants. Providing a better environment and opportunities for merchants will drive positive development in the e-commerce industry.