Two members of the American Consumer Product Safety Commission are advocating for an exploration into the safety measures of “foreign-owned” digital marketplaces like Shein and Temu, particularly concerning the alleged trading of “dangerous baby and toddler products.” In a recent correspondence, CPSC Commissioners Peter Feldman and Douglas Dziak stated that the agency should scrutinize the safety protocols and compliance procedures of Temu and Shein, in addition to their affiliations with third-party vendors and consumers, and “any assertions they make upon importing products.” The commissioners emphasized the need to comprehend these corporations, especially their emphasis on low-value direct-to-consumer shipments and the challenges in enforcement when entities with minimal or absent U.S. presence dispense consumer products through these platforms.
Last month, it was reported by The Information that Temu was retailing padded crib bumpers, prohibited in the U.S. due to suffocation risks, while Shein was offering children’s hoodies with drawstrings that regulators have identified as a safety hazard. In response, a Shein representative commented that customer safety is of paramount importance, and the organization is dedicating substantial resources to enhance compliance programs, including collaborating with testing agencies to bolster product safety measures. Similarly, a Temu spokesperson mentioned that all sellers on their platform are mandated to adhere to laws and regulations, especially those concerning product safety. The Temu representative affirmed their alignment with the U.S. Consumer Product Safety Commission in safeguarding consumer interests and product safety, committing full cooperation with any inquiries.
Temu and Shein, discount retailers that have garnered significant popularity in the U.S., have capitalized on extensive online marketing campaigns and the provision of low-cost goods sourced from China, whether it be a $3 pair of shoes or a $15 smartwatch. Shein entered the U.S. market in 2017 and has recently ramped up promotional activities on Google and Facebook to propel expansion. The company is reportedly valued at $66 billion. On the other hand, Temu, under the ownership of PDD Holdings, made its U.S. debut in 2022 and promptly injected billions of dollars into marketing, prominently through its “Shop Like a Billionaire” TV commercial aired during the Super Bowl earlier this year. This rapid ascent has attracted the attention of key e-commerce competitors, including Amazon, which has expressed interest in launching a rival discount platform, as previously reported.
Utilizing their partnerships with small-scale manufacturers and suppliers in China, both Shein and Temu facilitate direct shipping of goods from China to the U.S. A significant portion of their growth, per some industry specialists, is attributed to a trade loophole termed the de minimis exemption, allowing duty-free entry of packages valued under $800 from China into the U.S.
CPSC authorities have sought increased funding to recruit personnel for overseeing emerging e-commerce platforms like Temu and Shein regarding safety protocols, as reported by The Information. Additionally, legislators are closely inspecting these platforms. In April last year, a congressional panel issued a report outlining concerns with Shein, Temu, and other Chinese “fast fashion” platforms. They alleged multiple product safety hazards, links to forced labor usage, and exploitation of trade loopholes, among other issues.
