A popular foreign retailer is currently facing increased scrutiny over its handling of user data, as more than one million Australians use their services each month. Since its launch in Australia a year ago, Temu, an online retail giant, has experienced rapid growth in popularity. However, this surge in attention has raised significant concerns regarding the security of customers’ 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. In addition, it holds ownership of Pinduoduo, a thriving shopping platform in China. According to Australian cybersecurity expert Susan McLean, shopping on such websites carries security risks.
“I think every time you use online purchases or online shopping, there is a risk, and we’ve seen that with other platforms being hacked over the years and people’s credit card data being stolen,” McLean said, appearing on Sunrise on Monday.
“But we know that anything that is linked back to China may have serious security risks.”
“We know that Temu, for example, is collecting a lot of data; it’s not hard to find that out.”
“But the problem is that people simply download the app and click ‘I accept’ without understanding what they’re actually accepting.”
McLean expressed concern regarding the frequency of emails that customers receive after shopping on Temu, as they often promote additional product purchases. She strongly cautions against 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.”
Temu provided a statement, stating that it gathers information “for the sole purpose of providing and enhancing its e-commerce service to users.”.
“Temu does not ask for system permissions to access things like your photos, contacts, or location. Temu does not share financial data with vendors,” the company said.
“At Temu, we prioritise the protection of privacy and are transparent about our data practices.”
Temu cautions users on its website that it “will never send requests for extra payments by SMS or email.”.
“If you receive any requests claiming to be from Temu, we strongly suggest you ignore them and do not click on any links they may contain,” the company said.
However, McLean is not the only individual who has expressed concerns.
According to research company Roy Morgan, a significant number of Australians, approximately 1.26 million, are actively shopping on Temu every month. The company expects this surge in popularity to generate an impressive $1.3 billion in annual sales. Temu’s success stems from its attractive combination of affordable prices, complimentary delivery, and a strong emphasis on marketing and media promotion.
Roy Morgan Chief Executive Michele Levine described the numbers, released in March, as “extraordinary.”.
“When we were first thinking about whether we measured them [Temu and rival Chinese-Singaporean online retailer Shein], I actually thought they’d be too small to pick up,” she told ABC.
“How wrong I was—and I think many of the retailers in the country are shocked at their size.”
When questioned by A Current Affair about the potential drawbacks of Temu, Levine responded, “It might be that they are actually collecting a lot of information about people, which becomes its own marketplace.”
Addressing global personal data 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 Shein are facing allegations in the US of evading taxes and unfairly competing with American businesses. These accusations stem from their alleged exploitation of a rule that permits duty-free import of items in shipments valued below $US800.
This year, Temu faced criticism for a promotional campaign in France and Britain that offered users vouchers of up to 100 euros for downloading the app and referring others to sign up. The terms stated that the company would have indefinite access to personal data. Temu recently halted the offer due to some disagreements regarding client data usage.
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. South Korea’s Fair Trade Commission (FTC) recently started looking into Temu to determine if it was violating e-commerce and advertising regulations, Yonhap said, citing unnamed government and industry officials.
The FTC is also probing if Temu is in line with consumer protection rules, Yonhap added, citing complaints about product quality and other issues. AFP contacted Temu for comment. An FTC spokesperson said they could not comment on specific cases when asked by the AFP if the commission was investigating Temu.
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.
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