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Wednesday, June 19, 2024

Ago and Shein. “Signals of irregularities”. Ministry announcement

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“The practices used by both platforms may constitute a multi-level violation of national and EU regulations, including consumer protection,” the Ministry of Development and Technology said on Tuesday. The message indicated that it was Temu and Shein.

“The Ministry of Development and Technology began to receive signals indicating irregularities in the provision of services by the Temu and Shein e-commerce platforms. The ministry asked the said platforms to provide explanations,” the ministry announced on Tuesday.

According to the ministry, “the practices used by both platforms may constitute a multi-level violation of national and EU regulations, including consumer protection.”

Irregularities on the Temu platform

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As reported in the announcement, irregularities on the Temu platform consist in non-compliance with the provisions of the so-called Omnibus Directives – when informing about a price reduction. It was added that the platform does not present the price that was valid in the 30 days before the discount was introduced.

The ministry added that Temu also uses messages “that may cause pressure on consumers.” It was explained that these were “counters” counting down the time, e.g. of free delivery, or hurried messages, e.g. “Popular! Almost sold out”. The Ministry noted that the platform does not indicate a “clear and specific” price of goods – “in relation to some products, unclear terms regarding the price of a given product are used.” It was also assessed that the consumer was “incorrectly” informed about the minimum order value. “The consumer is informed about this only at the final stage of the purchase path,” it was emphasized.

Moreover, the Ministry of Energy and Technology warns that Temu uses “misleading” messages regarding “coupons”. “Coupons in the form of pop-ups inform about the possibility of winning PLN 500, but without information about the conditions enabling the use of these funds; additionally, many abusive clauses prohibited by Polish law are used,” it was explained.

The ministry also found violations in marketing practices. “When the customer has not consented to receiving commercial information from the website, the platform repeatedly encourages him to express such consent by means of pop-ups appearing on the screen,” it noted.

The ministry also pointed to Temu's “apparent guarantee” of price equalization under the slogan “price correction within 30 days” and an “apparent guarantee” of available cash on delivery. It was added that there is no information whether the seller is an entrepreneur, the division of responsibilities between the platform and the seller, and the seller's telephone number and email address.

Irregularities on the Shein platform

According to the Ministry of Infrastructure and Technology, the Shein platform also does not comply with the provisions of the Omnibus Directive – when informing about a price reduction, there is no presentation of the price that was in force during the 30 days before the introduction of the reduction.

According to the ministry, Shein also uses “misleading” product ratings. “There is no information whether the product reviews visible on the website come from consumers who actually bought a given product and how the reviews are verified, if any,” – it was added. The Ministry also noted that it is not known how the opinions are counted.

Shein and Temu. The history of their popularity

Gemius Mediapanel data shows that in January 2024, the Temu application and the portal of this trading platform reached 14.9 million real users in Poland, and the Shein application and its portal – over 6 million real users.

It was established in 2022. The company, owned by the Chinese holding PDD, has grown rapidly thanks to the enormous sums spent on advertising. Last year, Temu was the largest advertiser on Instagram and Facebook, spending almost $2 billion on promotion on these websites. The culmination of the aggressive advertising campaign was this year's spot for the company during the break of the Super Bowl, the final match of the American football league. Cost – $7 million for 30 seconds of broadcast.

Shein is a Chinese shopping platform that primarily sells affordable women's clothing. The company was established in 2008. It started by supplying products from other manufacturers. In 2022, it became the largest global clothing retailer.

Restrictions for Shein and Temu in France

She has already addressed the issue of Chinese platforms France. The regulations passed by the lower house of parliament provide for a punitive surcharge on shipments containing products imported from afar (the further the distance the item has to travel, the lower its rating will be and the penalty will increase) and made of synthetic fabrics.

The fees are to initially be EUR 5 (a little over PLN 20) per shipment and increase year by year to reach EUR 10 (approx. PLN 40) in 2030. In the case of Temu or Shein, the amount of the “fine” may often exceed the value of the product.

At the beginning of May, Finance Minister Andrzej Domański announced that his ministry would address the issue of “limiting potential unfair competition” from Chinese e-commerce giants.

Ministry of Finance will prepare an action plan to limit potential unfair competition from foreign platforms, Domański announced.

Read also: “These things are just crazy cheap.” The government announces its reaction >>>

Main photo source: Shutterstock



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