With the onset of the COVID-19 pandemic, Chinese online marketplaces Temu and Shein have gained significant popularity. By gamifying and glamorizing online shopping, these platforms have revolutionized e-commerce, becoming some of the most downloaded apps worldwide and attracting millions of users. To mitigate concerns over their ties to the Chinese Communist Party (CCP), both companies have sought to downplay their origins.
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[Shein and Temu's] success is, however, intertwined with practices that raise serious concerns about forced labor, data privacy, and geopolitical influence. Not only have both companies been accused of failing to comply with the Uyghur Forced Labor Prevention Act (UFLPA), but as entities subject to China’s National Intelligence Law, they both may act as conduits for the Chinese government to access vast amounts of private consumer data for surveillance, collection, and even cyber warfare. Yet, despite efforts by both the US and the EU to investigate these practices, enforce existing forced labor prevention and digital services acts, and raise awareness of risks associated with these apps, the frenzy continues.
''' Even more troubling are allegations about the companies’ sourcing practices, particularly in relation to forced labor in Xinjiang. For instance, while Shein was found to have violated the UFLPA by sourcing cotton from Xinjiang, Temu lacks a framework to ensure compliance with the law. Not only does Temu not audit any of its roughly 80,000 third-party sellers and their compliance with the UFLPA, it has also admitted that it “does not expressly prohibit third-party sellers from selling products based on their origin in the Xinjiang Autonomous Region.” Furthermore, Temu’s parent company PDD Holdings has in the past been accused of requiring its workers to work 380 hours per month, which resulted in several deaths. As such, it is possible that the two companies are effectively enabling forced labor and perpetuating human rights abuses linked to the CCP’s repression of Uyghurs.
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While data mining for business purposes is common, Chinese apps like Temu and Shein are said to go beyond what is needed for their e-commerce activities. The scale of data that is being collected by the two companies is directly related to their marketing strategies and the emphasis on selling advertisement services. For instance, in 2022, only 20 percent of Temu’s revenue was derived from customer sales, while 80 percent came from advertising, which requires large-scale data capture and processing. Shein’s app also requests consumers to provide it with access to data from other applications, such as social media, in exchange for discounts and special deals.
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