Think of a large number of individuals rushing to a particular area, not to shop or to listen to music, but to riot. Such was the situation in Temu’s offices in Guangzhou last month. The reason? Some of the small merchants who sell the company’s products also complain of the costs incurred whenever they have to issue refunds.
The Gathering Storm
Out of all these merchants, approximately 80 merchants were able to get to Temu’s office building which is on the 30th floor. They did not come to pass the time of day or to engage in idle talk, but to announce their presence. Finally, the police intervened and the merchants got out without a chance to converse with the top level officials. Still, many never got past the lobby; nonetheless, they called attention to thousands more. From videos on the walls of houses, people were seen chanting and sitting on the floor asking to be noticed.
The Root of the Problem
Temu is a platform that is a part of PDD Holdings and it can be noticed in the West mainly because of the low prices. All these low prices entail high costs to the merchants in the long run. If a customer demands to be refunded or complains, the merchant loses money in fines.
Refunds Without Returns
The most contentious issue is that Temu sometimes allows customers to get refunds even when they do not send back the product. This means that customers can get their money back and also get to keep the product, making it effectively a free product. Indeed, Temu’s policy has some sections that provide information about returns, but the issue is that many merchants believe these policies aren’t being enforced equitably.
Frequent Protests
It was not about a one-off occurrence. In July, the merchants visited Temu’s office at least ten times as expected. As clearly seen, the frustration seems to have accumulated. Even though Temu insists that the fines received end up in the hands of the consumers and not the company, the merchants do not believe it.
A Call for Action
Temu acknowledged the protests and said they are working on a solution. However, the merchants involved in the losses have declined to address the issues through conventional grievance handling and legal means. They demand straightforward and instant justice and consider that the existing system is unfair to them.
Social Media Outrage
In social media, the people’s anger can be clearly felt. Currently many Chinese internet users believe that Western consumers are exploiting Chinese businessmen. Still, one blogger said that it is akin to relocating the zero-dollar purchase practice from the United States to China. Another pointed out the paradox that supervision in a socialist country is too tight to ensure its enterprises are not involved in such practices.
Temu’s Success in the Midst of Discord
However, the following challenges have been experienced in Temu; Despite the above challenges, Temu has been among the success stories of PDD Holdings, particularly after the outbreak of the COVID-19 pandemic. The company’s shares have risen significantly, in contrary to other competitors include Alibaba and JD.com have not been very vibrant in trying to recover from that situation. However, this success seems to be achieved at the detriment of small merchants who tend to feel neglected or even unfairly competed against.
Conclusion
At the end of this protest we are again seeing how things are in the world of e-commerce. Platforms like Temu rely on small businesses yet most of the time the latter suffers most from the deal. To a certain extent companies must be allowed to succeed so that it does not put out of small businesses. Thus, let’s just wait for a favorable outcome of the conflict in the story that can be useful for both the merchants and consumers.
