By Analía Rojas | 2024-10-16

BUENOS AIRES -- The arrival of Temu in the Latin American market in mid-2023 not only introduced a new online shopping option but marked a milestone in the growing influence of Chinese companies on regional commerce.

While Temu's low prices and vast product selection have attracted many users, the app poses serious risks to data security and raises ethical concerns about certain business practices, according to digital security firms.

Similar to the controversies surrounding TikTok and Huawei's 5G technology, the Chinese shopping platform Temu -- now gaining popularity in Latin America -- has sparked concerns over the large-scale collection of user data and its potential misuse.

In addition to the typical phishing risks associated with online platforms, Temu may be exploiting regulatory loopholes to gather sensitive user information, according to various cybersecurity reports and analyses.

The collection and use of this data have sparked concerns that it could be influenced or controlled by the Chinese Communist Party.

Unsuspecting consumers

Temu, a Chinese e-commerce subsidiary of PDD Holdings, allows consumers to buy products directly from manufacturers known for offering rock-bottom prices.

Founded in 2015 by Chinese billionaire Colin Huang, the company experienced rapid growth and, in 2023, moved its headquarters from Shanghai to Dublin.

Temu has captured the attention of millions of users across Latin America and globally, even surpassing other Chinese platforms like Shein and challenging established competitors like AliExpress.

Simultaneously, Temu has accelerated the influx of Chinese products into the region, expanding its presence in Latin American markets.

One example of low prices on the Temu platform is wireless headphones for under $5, while similar items cost $20 to $50 in other online stores.

Additionally, Temu offers a basic smartwatch for about $10, much less than its rivals charge.

While Temu might appear to be the perfect shopping destination because of low prices and extensive catalog, customer reviews tell a different story.

The site holds a rating of just 2.45 out of 5 with the Better Business Bureau (BBB), and 44% of reviews on Trustpilot give one star out of five.

Bad customer service and product quality figure in many of the complaints.

"While this doesn't necessarily mean Temu is a fraudulent site, its popularity does attract scammers looking to exploit unsuspecting consumers," warned Camilo Gutiérrez, director of the ESET Latin America Research Laboratory.

Gutiérrez's remarks were highlighted in a press report by ESET, a global digital security company, published in August.

The controversies surrounding Temu have fostered distrust among consumers, evident in countless online posts and memes mocking the low quality and questionable origins of its products.

Buy now

Temu employs aggressive marketing tactics and advanced algorithms to captivate users, aligning with the principles of the "attention economy."

The Chinese app utilizes personalized promotions and frequent notifications to encourage impulse purchases.

In addition to these practices, the app has been accused of collecting user data without consent, as outlined in a September 2023 report by research firm Grizzly Research.

Illegal data collection is reportedly taking place not only in the United States but also in Latin America, where regulation is either weak or nonexistent.

Consumers should exercise caution when making online purchases through Temu, according to ESET.

The affordability of products on Temu stems from its business model, which cuts out intermediaries and leverages a vast network of Chinese suppliers.

This strategy slashes costs but can compromise product quality and lead to ethical problems, Wired reported in June.

Temu's tactics have also drawn criticism for fostering excessive consumption, Forbes noted in a May article about forced labor and aggressive marketing.

Behind the façade of affordable goods lies a troubling reality of environmental degradation and labor exploitation, as highlighted by various studies.

Chinese brands have a notable lack of accountability, the independent fashion watchdog group Remake said in its 2024 annual report on major clothing companies' practices.

Remake gave Temu 0 out of 150 points for human rights, citing concerns that many textile manufacturers in its supply chain use forced labor and that most of its products are crafted from non-recyclable synthetic materials.

As the world's largest producer and consumer of textiles, China owes much of its success to e-commerce giants like Shein and Temu.

Temu's expansion in Latin America is not an isolated incident; rather, it forms part of China's broader strategy to enhance its economic and commercial footprint in the region, in line with its global infrastructure project, the Belt and Road Initiative.