Temu parent company reports astronomical sales increase
Temu is now flooding sales markets worldwide, even though its products are often of poor quality and have a devastating carbon footprint. The EU wants to tackle the company with new rules. Meanwhile, the parent company of the low-cost supplier is massively increasing its turnover and profits.
144% increase in profits
The Chinese parent company of the low-cost shopping platform Temu recorded a 144 percent increase in profits in the second quarter. Shanghai-based PDD Holding reported a net quarterly profit of 32 billion yuan (around four billion euros). The group was able to increase its turnover by 86 percent to 97 billion yuan (around 12 billion euros) compared to the same period last year.
Catastrophic climate and environmental balance sheet
PDD includes the mail order company Pinduoduo, which is extremely successful in China. Temu is its counterpart outside of China. The platform attracts customers with extreme bargains, but is also repeatedly criticized for poor quality, shipments that are not received and, last but not least, the catastrophic climate and environmental footprint of its products.
The European Union reacts
The European Union already feels compelled to react. As no customs duties are currently payable on parcels worth less than 150 euros when imported into the EU, providers such as Temu benefit enormously. It is estimated that two billion such parcels arrived in the European Union from third countries last year. In order to stem this flood, the EU Commission intends to propose abolishing the current threshold of 150 euros this month, as reported by the Financial Times (FT) at the beginning of July.
Criticism of EU plans from Europe too
In addition to Temu, AliExpress and clothing retailer Shein are also being targeted. The digital giants are criticizing the approach. The Ecommerce Europe association, which includes Amazon and Ebay, is also skeptical about the deletion. The companies fear retaliatory measures from the EU's trading partners. An EU official also warned the FT that it could be difficult to persuade EU countries to agree, as the new regulation would increase the workload of already overburdened customs officials. Trade expert Jörg Funder also warned against expecting too much if the customs border were to fall. “It is illusory that consumers will stop shopping at Temu because of a few cents more customs duties,” he is quoted as saying.
Founder is the richest Chinese
The founder of PDD, Colin Huang, a former employee of Google in China, is now the richest man in the country. According to the ranking by financial news agency Bloomberg, the 44-year-old has a fortune of 48.6 billion dollars (44.5 billion euros). In a global comparison of the largest fortunes, he is therefore in 25th place.