Temu's multiple products went bankrupt, and a single seller may lose 7.5 million yuan

Since its launch in 2022, Temu's fully hosted model has almost subverted the global e-commerce market.

Low commodity prices were extremely popular amid the global economic downturn, and Temu took advantage of this to grow rapidly, opening up nearly 90 markets around the world in more than two years.

The IPC report shows that in 2024, Temu's ranking in the global cross-border e-commerce platform has jumped to second place, with a market share of 21% , second only to Amazon .

As of September last year, SimilarWeb data indicated that Temu 's monthly visits had reached nearly 700 million times .

But while it was growing rapidly, Temu came under strict scrutiny from multiple regulatory agencies in Europe and the United States, and product compliance and quality issues frequently occurred on the platform.

A Temu seller may lose 7.5 million yuan

Taking the United States, Temu's largest site, as an example, the U.S. Consumer Product Safety Commission ( CPSC) has recalled products sold on the Temu platform many times, with at least 8 products being recalled last year alone.

In November, the CPSC announced a recall of crib safety rails sold by Chinese seller Baofali on Temu, with recall number 25-033 .

The CPSC said that the federal Infant Safe Sleep Act clearly prohibits the use of padded crib fences, and the product in question violates this ban and may pose a suffocation hazard to infants. Currently, there are no reports of accidents related to this product , but prevention is needed.

According to the recall information, the Baofali products being recalled are model JJ25B-A1, JJ25B-A2 and JJ25B-A3 , which are available in three colors: white, gray and pink, and come with fabric straps.

Between June and August 2024, approximately 390 units of the product were sold on the Temu platform at a price of US$25 - US$30 .

The CPSC urges consumers to stop using the product , take a photo of the product cut in half, contact Baofali for a full refund, and dispose of it according to local and state laws.

In July, CPSC issued three recall notices for children’s pajamas on the same day, all of which were sold on the Temu platform.

1. JUVENNO KIDS children's button-style two-piece pajama sets, recall number 24-301 .

The reason for the recall of the children's pajamas set is that it " violates the flammability standards for children's pajamas and poses a risk of burns to children ."

The recalled pajama sets include a short-sleeved button-down top and a pair of matching shorts in champagne, lavender and peach colors. They have white trim on the sleeves, collar, shirt pockets, shirt hem and shorts hem and are labeled "Made in China" inside.

From October 2022 to May 2024, the product was sold exclusively online on Temu, with approximately 18,620 units sold at a price of approximately $9. If all the sold products are processed, Temu seller JUVENNO KIDS will have to bear a loss of approximately $167,600 (equivalent to approximately RMB 1.21 million in offshore RMB at the end of July).

2. Fashion Online children's pajama sets , recall number 24-296 .

Fashion Online has recalled children 's pajama sets sold exclusively in Temu because they violate federal flammability standards and pose a burn risk .

The recalled products involve eight different styles of children's two-piece pajamas with the tops printed with the words "I LOVE DAD", "I LOVE MOM", "TUTU AWAKE TO SLEEP", "LOL Bright Pink", "LOL Light Pink", "Unicorns Forming a Heart", "Standing Unicorn" and "Unicorn in Heart" . The sizes are 1Y-8Y.

Since the product was launched in October 2022 , until May 2024, about 45,300 pieces of this series were sold in Temu , priced at about US$23 . CPSC requires sellers to refund consumers who have purchased the products in full, which means that Fashion Online will bear a loss of US$104.19 (about RMB 7.53 million in offshore RMB at the end of July).

3. Lovely Angel children's lace pajamas , recall number is 24-300 .

Lovely Angel pajamas were recalled because they "violated federal flammability standards for children's sleepwear, posing a risk of burns to children."

The recalled products come in six colors: black, lavender, watermelon, beige, green and red. The pajamas are decorated with white lace on the chest and hem, and a white bow at the collar. The sizes range from 3Y to 12Y.

From June 2023 to May 2024, the product was sold exclusively online at Temu, with about 4,360 units sold at a price of about $10. In other words, the seller Lovely Angel had to bear a loss of about $43,600 (about 320,000 RMB in offshore RMB at the end of July).

Although the sellers of the three children's pajamas products mentioned above had not received any accident reports as of the time of the recall, the CPSC still advised consumers to immediately stop letting their children wear the pajamas, dispose of the products in accordance with local and state recycling laws, and contact the seller for a full refund.

Temu becomes regulatory target in multiple markets

In addition to the US market, markets such as Europe and Oceania are also keeping a close eye on the Temu platform.

Just this month, the Australian Competition and Consumer Commission ( ACCC) announced the recall of a pop-up mini beach tent sold on the Temu platform due to a drowning safety hazard .

It is understood that the product in question is from Yiwu seller Yiqisheng Outdoor . It is suitable for children and has a built-in swimming pool. It includes shark model and blue and yellow model, and is equipped with ground spikes and storage bags.

It was only launched on Temu on October 5, 2024 and was taken off the shelves on the 28th of the same month .

The ACCC said the tent did not comply with the mandatory safety standards for portable swimming pools and the product did not have the required warning signs . If consumers are not aware of the potential hazards, it may lead to drowning accidents, serious injury or death .

Currently, the ACCC has asked consumers to stop using the product immediately and contact the Temu platform seller to apply for a refund. Consumers can obtain further refund processing through the seller channel.

In November last year , the ACCC also recalled a glow-in - the-dark hooded sweatshirt sold by Temu .

Australian regulations require that all children's pajamas and some daily clothing must pass fire resistance tests and be affixed with corresponding fire resistance labels. However, the investigation found that the products in question were not produced in accordance with regulations and therefore failed to pass relevant safety tests.

Consumers may suffer severe burns from this product and Temu had received one report of a burn from this product prior to the recall .

The ACCC later called on consumers to stop using and discard or destroy the product immediately, and contact Sunshine Towel for a refund or other compensation.

The ACCC has also issued a safety recall on a number of Temu products.

In December , the Malta Competition and Consumer Affairs Authority ( MCCAA) asked Temu to recall several models of children's shoes on the grounds that the toxin content of the products exceeded the EU legal limit .

After the MCCAA tested the children's shoes purchased from Temu , it was found that the sandals CN24-25 (EU30)/yellow, number: 3658164051; and the rain boots CN160 (EU23)/yellow number: 4837902518 failed to pass the test for compliance with the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulations.

In October, the European Toy Industry Association ( TIE) released an industry survey stating that unbranded toys sold through e-commerce platforms such as Temu are very dangerous for children.

TIE said that the investigation covered more than 100 products purchased from 10 e-commerce platforms, and the results showed that up to 80% of the toys did not meet EU safety standards . After that, platforms such as Temu quickly removed and investigated non-compliant products.

The extremely low price-performance ratio has attracted overseas consumers to spend crazily on the Temu platform, but complaints about product quality have also emerged one after another. At present, the supervision of the Temu platform in many markets such as Europe and the United States is constantly tightening, and product compliance is imminent. Sellers need to be aware of the compliance requirements of each market.

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