“Scrap Commerce” – Temu and Shein: warning about cheap goods from China

“We stand for fair trade instead of junk commerce,” says Rainer Will, director of the Austrian Trade Association, in drastic terms about the new competition from the Internet. He is not alone in his warning. The Chamber of Commerce also warns. The state would lose billions due to gaps in customs authorities in Europe. The products often arrived in Austria duty-free and tax-free.

Huge problems with exchanges and returns
The Association for Consumer Information (VKI) urges caution. “The problems with such dropshipping companies often only arise when you want to return the goods,” says Jakob Zarari of the European Consumer Center (EVZ) based at the VKI. There have been complaints recently, for example because ordered garments looked different from the product photos, were too small or smelly.

Zarari explained that consumers in the EU have the right to withdraw from the purchase without giving any reason within 14 calendar days of receiving the ordered goods. However, withdrawing will be difficult if the return address is in China, Zarari points out possible problems. While Temu and Shein offer payment on account, intermediary payment service provider Klarna insists on payment even if you have not received the product or want to return it, Zarari says.

Cheap Chinese goods are also available from other mail order companies
The consumer advocate advises to check before purchasing who you are actually buying from and who is just an intermediary. Cheap Chinese goods without approval in Europe or without CE marking are available not only on Temu or Shein, but also on Amazon. There are several products on the local market where Amazon only handles the shipping but is not the seller. This can be recognized by cryptic names such as “JHSDZUK” or “ZUNTO”. If you click on the name and scroll down, you will find a printout of the seller including the business address.

Harmful substances, safety defects
It becomes dangerous if products are purchased that have safety defects, such as harmful substances in children’s toys or if a charger causes a fire. In such cases, product liability applies, Zarari explains. This is aimed at the manufacturer or the importer. However, when it comes to direct purchases from China, there is no importer and it will be difficult for Austria to prosecute the China-based manufacturer, Zarari says. He points to the EU’s plans to hold mediators accountable.

Products imported into the EU are in principle also checked by customs. When asked, the Ministry of Finance explained that they work with risk analyzes and ‘a well-considered interaction between people, guide dogs and technology’. No details are given “because this would be contrary to effective fraud prevention.” Bans and restrictions are monitored to protect the safety of citizens, the environment and society.

270,000 shipments from China
Shipments of goods from China or other third countries can be processed in any EU country. The Ministry of Finance explained that it is the responsibility of the online platform or the importer to have the necessary procedures carried out. In Austria, a total of approximately 1.7 million shipments with a value of up to 150 euros were processed by courier services and the Austrian Post in the e-commerce sector in 2023. Of these, approximately 270,000 shipments were sent to China.

Toys as a health hazard
European toy manufacturers recently warned of a safety risk for children. The Toys Industries of Europe (TIE) association said it had purchased 19 toy items through Temu. None of them met current EU toy regulations, 18 did not meet the EN 71 series toy standards. For example, in slime toys the content of semi-metal boron was eleven times higher than the legal limit for toys. With other toys there was a risk that children could choke or injure themselves on small parts. A Temu spokeswoman said an internal investigation was launched immediately after receiving the test results. All 19 products have been removed and are no longer available on the EU website.

The Chamber of Commerce calls for an expansion of customs staff throughout Europe. If a small number of employees have to check more than a million packages every day, this cannot work, according to the WKÖ. The chamber and the trade association are calling for the end of the customs exemption of 150 euros planned for 2028 to be brought forward. Union boss Will sees this as the “most important measure” and the tax-free limit must expire by 2026 at the latest. “It’s high time to wake up,” Will said.