Temu’s attempts to reorganise its business model have resulted in criticism from its Chinese suppliers. In recent weeks, the online marketplace has started recruiting Amazon merchants, who store items in US and EU warehouses.
The action is believed to be taken to safeguard Temu’s business model in light of the EU’s intentions to levy a customs duty on inexpensive goods—a loophole that has significantly accelerated the platform’s growth.
A change in business strategy would enable the marketplace to offer clients faster delivery times in addition to selling larger, higher-margin items like furniture and home appliances.
Temu will switch from a “fully managed” to a “semi-managed” model by hiring suppliers with foreign warehouses. Under this model, the merchant would bear the costs of last-mile deliveries, warehousing, and shipping that were previously covered by the online platform.
Still, a number of Chinese suppliers in Guangzhou, the industrial capital of the south, are worried about the move that would make them take on greater risk in order to sell on the platform.
They attributed the drop to the platform’s ambition to add additional providers in an attempt to pit them against one another and lower rates. Many suppliers reported that Temu started fining them for things like defective packaging and complaints from customers about the goods not matching the online description, thus they stopped doing business with Temu.
