Chinese retail giant Temu responds after millions of Aussies warned

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Online retail giant Temu has defended its collection and use of Australians’ data as it faces increased scrutiny across the globe.

Temu, which is an online marketplace known for sometimes astonishingly low prices, knock-offs and dupes of more expensive brands, is owned by PDD Holdings.

PDD Holdings started in Shanghai, China and moved its headquarters to Dublin, Ireland last year. It also owns China’s Pinduoduo, a similarly successful domestic shopping platform.

Research company Roy Morgan says 1.26 million Australians are shopping each month on Temu, putting it on track to clock $1.3 billion in annual sales – “thanks to a mix of ultra-cheap prices, free delivery and aggressive marketing and media spend”.

Australian cybersecurity expert Susan McLean had raised concerns about the security risks shopping on these types of websites on Sunrise on Monday.

Temu is also under increased scrutiny in the United States, Europe and elsewhere over its business practices, advertising and handling of user data.

In response to concerns about its use of customers’ personal data, Temu told it collects “the minimum information necessary” to manage and complete orders, deliver services and process payments, communicate with the user about their orders, products, and offers that might interest them, and personalise the user’s shopping experience and make 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.

Ms McLean had told Sunrise another concern was the number of emails customers receive after shopping on Temu, which encourage the purchase of more products. She advises to never click 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.”

Global concerns over use of personal data

Temu is under increased scrutiny in the United States, Europe and elsewhere over its business practices, advertising and handling of user data.

Temu and rival Chinese-Singaporean online retailer Shein have been accused in the US of avoiding taxes and undercutting American businesses by abusing a rule that allows the duty-free import of items in shipments that do not exceed $US800 ($1200) in value.

Temu came under fire this year over a campaign in France and Britain that offered vouchers of up to 100 euros for downloading the app and inviting another person to sign up.

The terms included granting the company the right to use personal data for life.

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

It emerged this week that South Korean regulators are investigating Temu on suspicion of false advertising and unfair practices, according to 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 AFP if the commission was investigating Temu.

The head of South Korea’s Personal Information Protection Commission told reporters this month that the body is looking into how Temu and Alibaba’s AliExpress have been collecting and using people’s data, according to Yonhap.

– with AFP