Temu defends amid global data scrutiny

A well-known international retailer facing growing scrutiny has come forward to justify its practices regarding the collection and utilisation of data from Australian consumers. Amid growing global scrutiny, Temu, the online retail giant, has come forward to defend its practices of collecting and utilising Australians’ data.

PDD Holdings owns Temu, an online marketplace known for its remarkably low prices and abundance of counterfeit products. Last year, PDD Holdings relocated its headquarters from Shanghai, China, to Dublin, Ireland. Additionally, it holds ownership of Pinduoduo, a thriving e-commerce platform in China.

A recent report by research company Roy Morgan reveals that a significant number of Australians, approximately 1.26 million, are actively engaging in monthly shopping on Temu. The platform expects this surge in consumer activity to generate an impressive $1.3 billion in annual sales. Temu’s success stems from its attractive combination of affordable prices, complimentary delivery services, and a strategic approach to marketing and media investment.

During an appearance on Sunrise on Monday, Australian cybersecurity expert Susan McLean expressed her concern about the security risks associated with shopping on these types of websites. Temu’s business practices, advertising, and handling of user data have come under heightened scrutiny in the United States, Europe, and other regions.

Addressing concerns regarding the utilisation of customer data, Temu assured news.com.au that it only gathers the essential information required to handle and fulfil orders, provide services, facilitate payments, communicate with users regarding their orders, products, and relevant offers, as well as customise the shopping experience and offer product recommendations.

“We are always transparent about the potential collection of data,” a statement said.

“If there’s a chance we might use the user’s information for a specific purpose, we’ll inform them. This aligns with the strict standards set by app marketplaces like Apple’s App Store and Google Play.

“While we disclose all potential data collection, in practice we only collect and use the absolute minimum needed to operate our service effectively.

“As part of Nasdaq-listed PDD Holdings Inc, we adhere to rigorous regulatory oversight. Our commitment to privacy informs every aspect of how we handle user data.”

Temu said its app security practices had been “independently verified to meet rigorous global standards” and it used ethical hackers to “proactively identify and report vulnerabilities”.

From a user perspective, Temu said it used multi-factor authentication and actively combated phishing scams and identity theft as a member of the Anti-Phishing Working Group.

McLean expressed a concern about the excessive amount of promotional emails that customers receive after shopping on Temu, which strongly encourage them to make additional purchases. It is strongly advised to refrain from clicking on those links.

“You don’t really know if the link is legitimate and you don’t know what’s going to happen if you click on it,” she said. “And we always say if you’re going to purchase a particular product, the best place to purchase that from is the website of the brand itself or a platform like Amazon, something that is a legitimate platform where you’re highly unlikely to be hacked or scammed.”

Addressing global data privacy concerns

Temu is facing heightened scrutiny in the United States, Europe, and other regions regarding its business practices, advertising, and management of user data. Temu and its competitor, Shein, have faced allegations in the US of tax evasion and unfair competition against American businesses. These accusations stem from their alleged exploitation of a rule that permits duty-free imports of items in shipments valued below $US800 ($1200).

This year, Temu faced criticism for a promotional campaign in France and Britain where users received vouchers worth up to 100 euros for downloading the app and referring others to sign up. The agreement allowed the company to indefinitely use personal data.

Temu stopped the offer last month because of “misunderstandings on the extent of client data use”.

Recent reports indicate that South Korean regulators are currently looking into Temu over allegations of false advertising and unfair practices, as reported by the Yonhap news agency. According to undisclosed government and industry sources, the Fair Trade Commission (FTC) of South Korea has initiated an investigation into Temu to assess its compliance with e-commerce and advertising regulations, as reported by Yonhap.

An investigation is currently underway by the FTC to determine if Temu is in compliance with consumer protection regulations. According to Yonhap, there have been complaints regarding product quality and other related matters. Temu was contacted by the AFP for comment. When questioned about Temu, an FTC spokesperson declined to provide any details on ongoing investigations, stating that they are unable to comment on specific cases.

According to Yonhap, the head of South Korea’s Personal Information Protection Commission, an investigation is underway regarding the data collection and usage practices of Temu and Alibaba’s AliExpress.