Chinese low-cost platforms such as Temu and Shein have finally reached domestic consumers. However, they are increasingly criticized for poor quality, unreceived shipments, negative climate and environmental impact of the products and manipulative techniques.
“Temu only entered the Austrian market last year. Within a year, they have achieved a level of market penetration that is unprecedented,” trading expert Ernst Gittenberger of Johannes Kepler University (JKU) Linz told journalists on Thursday. Criticism of Chinese online competition is growing across Europe.
Three particularly popular
A JKU survey of around 1,000 respondents shows that almost every or every second person among Austrian online shoppers has made a purchase on one of the Chinese online platforms in the past twelve months. Particularly popular: Temu, Shein and AliExpress. 30,000 parcels arrive in Austria from Temu alone every day. The target group is mainly young women between the ages of 16 and 24 who buy cheap fashion and cosmetics there. “The platforms are falling into fertile ground due to price increases,” Gittenberger said. Consumers are currently still cautious with their purchases.
Costs drop
This also explains why the number of people shopping online is increasing, but spending is decreasing. The share of online spending in total retail spending fell last year in 20 of the 27 EU countries, to 9.8 percent in Austria. In 2022, that share was 10.4 percent and in 2021 it was a historically high 11.5 percent due to the corona crisis.
Spending in Chinese web shops is currently still at a low level. According to an estimate by the JKU, these will probably amount to between 600 and 750 million euros between May 2023 and April 2024. This corresponds to seven to nine percent of Austrians’ total online spending, and the trend is increasing.
It is unlikely that consumer behavior will change significantly
Christoph Teller, head of the Institute for Trade, Sales and Marketing (IHaM) at the JKU, does not expect a radical change in the consumer behavior of Chinese suppliers. “We have been socialized by Amazon and we will not deviate from this high level of service.” Poor quality of goods or long delivery times were seen in the survey as the biggest problems when buying on Chinese platforms. On the other hand, a large choice of products and especially cheap products are the main reasons for purchasing.
The resistance is stirring
But there is resistance throughout Europe. The platforms are increasingly criticized for poor quality, unreceived shipments, poor climate and environmental impact of their products and manipulative techniques. The European Commission recently tightened the rules for Shein and officially classified the platform in the category of very large online platforms. This means that Shein is subject to stricter requirements, such as safeguards to protect against product counterfeiting and intellectual property rights violations.
In addition, annual risk assessment reports will be mandatory for the Chinese company, which must specifically investigate possible adverse effects on the health and safety of consumers – with a focus on the physical and mental well-being of underage users. Temu will likely be kicked out next.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
