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temu

EU Regulators Say Temu Isn’t Doing Enough to Prevent Sale of Illegal Products

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The European Commission has issued a sharp warning to Chinese e-commerce giant Temu, accusing the fast-growing online retailer of exposing European consumers to a flood of potentially illegal and unsafe products.

In preliminary findings released Monday, the Commission outlined multiple concerns about the platform’s compliance with the Digital Services Act (DSA)—a sweeping set of rules enacted to better protect internet users across the European Union.

The investigation into Temu, launched last year, is part of a broader effort by EU regulators to hold digital marketplaces accountable for what they host and promote.

According to the Commission, Temu’s current safety protocols may fall well short of the standards required by EU law. Investigators say a recent “mystery shopping” operation uncovered several non-compliant items being sold on the platform, including baby toys and small electronic devices.

While the Commission did not specify which laws these items violated, it noted that the rapid growth of online shopping in the EU has led to a corresponding spike in counterfeit and unsafe products entering the market. There is “a high risk for consumers in the EU to encounter illegal products” on Temu’s website, the Commission said in its statement.

It pointed to “inadequate mitigation measures” and criticized Temu’s internal risk assessments for being overly reliant on generic industry benchmarks rather than on specific data from its own marketplace.

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“Temu is a priority for us. The problems caused on the European market by non-compliant products coming from online marketplaces are an issue.”

Henna Virkkunen, the EU’s Executive Vice-President for Tech Sovereignty, Security, and Democracy, emphasized the seriousness of the situation in a news release.

“We shop online because we trust that products sold in our Single Market are safe and comply with our rules. In our preliminary view, Temu is far from assessing risks for its users at the standards required by the Digital Services Act.”

Temu, a subsidiary of Chinese tech firm Pinduoduo Inc., has seen explosive growth in recent years by offering ultra-low-cost products, ranging from fashion to home goods, primarily shipped from Chinese vendors.

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It currently boasts 92 million users across the EU and 185.6 million in the United States. However, the platform’s rise has also drawn scrutiny for how it manages seller activity and monitors product safety.

When they launched the probe, EU authorities stated that they would examine whether Temu was taking sufficient action to find and combat “rogue traders” or vendors who allegedly sell non-compliant or counterfeit goods, get suspended, and then quickly return under new identities. In its preliminary findings, the Commission deemed Temu’s approach to be insufficient.

The Commission says it will also look into other suspected rule violations on Temu, including the platform’s “addictive design features, the transparency of its recommendation systems, and its access to data for researchers.”

In a brief response, Temu stated that it “will continue to cooperate fully with the Commission,” but did not address the specific findings.

Under the DSA, platforms found in violation could face fines of up to 6% of their global annual revenue. They may also be ordered to take concrete steps to bring their operations into compliance.

Before the EU watchdogs reach a final conclusion, the company will have the opportunity to review the Commission’s investigative files and address the allegations.

As European authorities ramp up enforcement of the DSA, the outcome of this case may set a significant precedent for how global e-commerce platforms are held accountable for the goods they deliver to doorsteps.

closing

Bed Bath & Beyond Files For Bankruptcy, Closing Hundreds Of Stores 

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Bed Bath & Beyond announced Sunday that it filed for bankruptcy, stating that they will be closing its remaining 360 Bed Bath & Beyond stores and 120 buybuy Baby locations. Within the past year the company has closed around 400 stores.  

Chain department stores such as TJ Maxx and HomeGoods have begun deals to take over the retail spaces, as well as gyms. The vast spaces of Bed Bath & Beyond stores offer a unique opportunity for commercial real estate. 

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“E-commerce scared a lot of people off from building retail,” said Brandon Isner, the head of retail research at CBRE, a commercial real estate firm, to CNN. 

“A lot of great real estate is going to come available into a market where there’s been no vacancies. It will not take long for retailers to occupy those spaces.”

“For us, the biggest source of new store locations comes from other retailers closing stores. So many of our most productive locations were formerly Circuit City or Toys ‘R’ Us or Sports Authority,” Burlington CEO Michael O’Sullivan said.

New commercial real estate construction has decreased vastly within the last couple of years, and retail store spaces have also been scarce, so the availability of these large building spaces could be a new opportunity for major retailers. 

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Bed Bath & Beyond has stores in all 50 states, a majority of them are in the most populated areas of the country. A majority of the stores are also located in large cities and mid-size suburbs. These are all good qualities for retailers looking to expand their spaces in a prime location. 

“There is good interest for Bed Bath & Beyond stores that are closing given desirable locations and an average size of around 30,000 square feet,” retail analysts from Telsey Advisory Group said.

“In some cases, landlords are also eager to replace old Bed Bath & Beyond leases because the company was paying below-market rent in certain locations,” Telsey Advisory Group analysts said.

“Bed Bath and Beyond sites are interesting to us, and we are exploring available opportunities with our franchisees,” a spokesperson told CNN.

Shopping Online

Retail eCommerce Sales Set To Hit $4.8 trillion By 2021

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New research predicts that retail eCommerce sales will hit $4.8 trillion by 2021, as retail continues to boom despite the continued demise of the high street.

Research published on Statista revealed that eCommerce sales in 2019 have reached 3.53 trillion dollars and are expected to grow to 6.54 trillion dollars in 2022. The report also revealed that despite advancements in technology and an increasing use of mobile devices for shopping, Desktop PCs still remain the most popular device for shopping online.

There has been much said about the death of the high street, but many have questions whether this paints only part of the picture. Indeed, 1 in 10 high street stores are currently empty and we are frequently hearing about large, household named retailers closing major locations.

This year alone, Business Insider revealed that the US retail industry will see the closure of over 8,600 stores, with The Kitchen Collection, Sears, Kmart, Party City, Walgreens, Barneys, Charlotte Russe, Family Dollar and Chico’s all reducing their store portfolios. Furthermore, many were shocked when Payless announced it was ceasing trading at all of its 2,500 stores back in February, a move which is set to go down as the largest retail liquidation in history.

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Understanding what contributions to success or failure in such an uncertain market is typically hard to determine. Clearly the rising cost of maintaining a ‘bricks and mortar’ store, along with increased online competition from international eCommerce retailers has led to greater variety and choice for customers. The evolving 24/7 nature of retail, the rise of ‘Click & Collect’ and the need for instant gratification have all contributed to a soar in customer expectations, reduced customer loyalty and a greater amount of choice in where they can choose to spend their money. As a result, retailers who want to hold onto these ever-fickle customers are having to radically rethink their approach, their infrastructure and their market channels.

There has been a common assumption that those high street retailers who are thriving are those who have integrated an eCommerce offering, yet some of the biggest players in the market are showing that this isn’t necessarily the case. A classic example of this is low-cost fashion retailer Primark. Reports suggest that the popular high street retailer recently experienced an increase in sales of 4%, yet they have no eCommerce offering. Alongside this we see online brands such as Amazon actively working to establish a presence on the high street, with their prominent Amazon Lockers displayed in a growing number of locations, in addition to their Amazon Go stores. So far, this approach appears to be succeeding; there are several US stores in Chicago, New York, San Francisco and Seattle, with additional stores set to roll out in future months.

Reflecting on the current state of play in the retail sector, Tejas Dave, founder of Dropshipping platform Avasam, believes that the future of retail is omnichannel, a blended approach to retail where customers experience the same level of service regardless of which platform they choose to engage with.

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In a recent interview, Tejas said, “Fashion store Oasis are a great example of omnichannel in action. Their eCommerce website and their mobile app allow for customers to order for home delivery or in-store collection, while in stores, sales assistants carry iPads that they can check to-the-minute stock levels. From those iPads, they can also take orders for next day delivery to the customer’s preferred address, or take payments, helping to eliminate queues at peak times. In addition, by having a single system, customers and staff can both see the same information, reducing disputes, and stopping customers asking the staff to ‘Just check for them’. The Oasis team have created a winning strategy, and feedback from customers is positive in terms of the convenience they offer.”

Developments in technology have meant that web-only retailers don’t have bear the risk of entering the high street directly, they can do so through partnering with high street retailers, where their products can be offered in store for ordering. Alternatively they can simply use the retailer as a location for click and collect arrangements.

Looking forward, Tejas advises retailers to stay abreast of other technology developments , However, following the crowd isn’t always the best approach either; Tejas warns against simply jumping on the next fad, as no matter how exciting or innovative they may be, not all solutions will be right for everyone.

“What is clear is that the retail sector is not dead, and neither is the high street. It just needs the adoption of the right technology to stay relevant. Retailers can ensure they don’t end up out of business simply by focusing on a smarter approach to their use of technology,” adds Tejas.