Chinese Owner Of Breakout Success Temu Moves HQ To Ireland Amid US Pressure

Chinese e-commerce platform PDD Holdings, the owner of Temu, has reportedly moved its official headquarters to Ireland as the successful online shopping app faces more pressure from the U.S. government.

PDD has listed a Dublin address as "principal executive offices" in its latest filing with the U.S. Securities and Exchange Commission (SEC), as per Semafor. In January, the Chinese e-commerce giant reportedly listed a Shanghai address as its main executive office.

Multiple outlets, including the South China Morning Post and Forbes, have cited PDD Holdings as the owner and operator of Temu. However, all references to PDD Holdings as the parent company of Temu have recently disappeared from the app's website, according to Semafor.

News of PDD's move to Europe came amid increasing scrutiny and pressure from regulators and lawmakers alike over Temu's potential links to the Chinese government.

In a report released last month, the U.S.-China Economic and Security Review Commission (USCC) bared the "challenges" presented by Chinese e-commerce fashion platforms such as Temu.

The challenges posed by Temu and Shein, another Chinese "fast fashion" platform, included "exploitation of trade loopholes; concerns about production processes, sourcing relationships, product safety, and use of forced labor; and violations of intellectual property rights," according to the USCC's report.

This week, the House Select Committee on the Chinese Communist Party (CCP) sent a letter to Temu, inquiring about the fast fashion app's sourcing policy. "Please provide all policies, guidelines, requirements...relevant to Temu's enforcement of its sourcing policy," the letter stated, as per Forbes.

Questions about Temu's supply sourcing policies were raised after reports of Shein's clothes having traces of Xinjiang cotton emerged. Human rights groups have accused China of abuses against Uyghurs and other Muslim ethnic minorities in Xinjiang, an ethnic minority region in China.

In a November 2022 report, Bloomberg said traces of Xinjiang cotton had been found in Shein's cotton garments during laboratory testing conducted for the outlet. A bipartisan House letter was sent to the SEC this week, asking the office to require Shein to disclose potential forced labor practices and alleged wage violations in some of its supplier factories reportedly located in Xinjiang.

Temu, which has been gaining traction in the U.S. fast fashion market for its affordable deals on various products, has been flagged by the non-profit Alliance for American Manufacturing as another Chinese clothing company that possibly sells clothes made through forced labor.

There have also been reports about some Temu products being of subpar quality and ordered items not being delivered as promised.

Late in December 2022, Time reported that the shopping app had been subject to more than 30 complaints with the Better Business Bureau (BBB).

Melanie McGovern, director of public relations and social media for BBB, told Time that it was uncommon for new companies to receive so many complaints in a short period of time. Temu launched in the U.S. in September of that year.

Temu has currently been #1 in the App Store's Shopping segment, with Shein at #2 as of Wednesday.

On the Google Play Store, Temu has had more than 10 million downloads. The app has been #1 on the Play Store's Top Free charts as of Wednesday, and as has been the case over in Apple's App Store, Shein has been at #2.

Since its launch, Temu has been downloaded 33 million times in the U.S. as of early April. In April alone, the app was downloaded seven million times, according to Sensor Tower.

Meanwhile, Temu's sister company, Pinduoduo, is in a similar situation in terms of scrutiny from the U.S.

Pinduoduo, the online shopping app owned by PDD Holdings that was recently suspended by Google over alleged malware in some of its versions, was accused of spying on users by cybersecurity researchers, as per a CNN investigative report released last month.

While Temu has not been accused of spying on its users, an expert recently raised concerns about the large amount of data it collects from users.

"Americans using Temu are selling the country out for bargains that really aren't worth it," cybersecurity expert Kim Komando wrote for USA Today.

Komando noted that aside from a user's address and phone number, Temu also collects social media profiles, browsing data, IP addresses and other information from third-party sources such as credit bureaus, public records and other Temu sellers.