Many consumers are lured by the low prices offered by Temu and Shein. The Federal Ministry of Economics now wants to take stronger action against the Asian shopping portals.
Federal Minister of Economics Robert Habeck (Greens) wants to tighten controls on Asian shopping portals such as Temu and Shein and abolish the 150 euro duty-free limit. This is the result of an e-commerce action plan drawn up by the Federal Ministry of Economics (BMWK). The plan has been made available to the German Press Agency. “Anyone who shops online must be able to rely on safe and harmless products. Toxic substances do not belong in clothing or toys,” said Habeck. German and European companies should not be disadvantaged by “others circumventing the applicable rules.”
Shein and Temu are very popular in Germany. This is mainly due to their low prices. However, the portals are controversial. Sales representatives, politicians and consumer advocates criticize product quality, a lack of controls and unfair competition, among other things. The portals reject the allegations.
Several measures planned
The BMWK’s action plan provides for various measures – including closer cooperation and more powers for national and European market surveillance authorities. The abolition of the duty-free limit should be carried out “quickly and with minimal bureaucracy”. The Asian online platforms mainly use air freight. For orders from non-EU countries, no import fees have to be paid for packages with a value of less than 150 euros. The providers are accused of declaring many shipments incorrectly in order to comply with the 150 euro limit. Industry experts complain that customs are completely overwhelmed with the controls.
Habeck is calling on the EU Commission to collect data on violations by providers such as Shein and Temu in a “data hub” in order to uncover and sanction misconduct. The EU Commission should carry out test purchases to find out whether legal violations occur systematically and remain unchanged over time. “Sanctions must be set high enough to have a deterrent effect,” it says.
The ministry also wants to oblige manufacturers to store information on product safety, environmental and health protection in the digital product passport. The authorities are increasingly finding defects and violations of regulations in third-country products that are sent to the EU, the BMWK explained. This applies in particular to online retailers such as Temu and Shein.
Shein: “Our business model is not based on tariff advantages”
A spokeswoman for Shein said of the action plan: “We are determined to comply with German and European laws and support all efforts that create fair competition conditions that benefit consumers.” Shein boss Donald Tang recently told Handelsblatt: “Our business model is not based on customs advantages.” The company is working on providing customs authorities with the necessary information before the packages arrive at the airport.
Temu said that as a “new player in Europe” it had listened carefully to feedback from customers, regulators and consumer protection groups. It has adapted its services to local customs and is “fully committed to complying with local laws,” a spokesperson said.
The deputy general manager of the German Retail Association (HDE), Stephan Tromp, assesses the action plan positively. It is “good and right” that the criticism of unfair competition has been taken up. The HDE had called for the customs exemption limit to be abolished. Concerted control actions are a first step to “get the flood of packages under control”. However, the association still sees a need for clarification. This should avoid creating new bureaucracy that would also burden retailers and platforms based in the EU.
The head of the consumer centers, Ramona Pop, said: “It is right to hold the large online marketplaces more accountable.” Consumers should be better protected from products that do not comply with EU product safety regulations. Temu and Shein should be held more accountable. “Retailers should not be allowed to sell anything there that does not comply with the requirements.” The EU is called upon to take action here.
Survey: 43 percent of consumers buy from Temu and Shein
Trade expert Carsten Kortum believes that abolishing the duty-free limit is the right thing to do. Temu and Shein’s business model is based on cost advantages through shortened supply chains, a lack of product testing according to European standards and the avoidance of import duties, said the professor at the Baden-Württemberg Cooperative State University Heilbronn. “Due to the necessary price increases that Temu and Shein would be forced to make, a large number of items would no longer be attractive to customers.”
Test purchases are not effective because they mean that large quantities of products still come to Germany unchecked. Sanctions, on the other hand, would only be effective if the platforms were also liable for misconduct and not just the seller in China, says Kortum.
According to the Cologne-based retail research institute IFH, 43 percent of consumers in Germany buy from marketplaces such as Temu and Shein. According to the industry association BEVH, five percent of orders in German online retail are made by the two providers. They have more than doubled their market share within a year. Temu is in fourth place in terms of the number of orders, behind Amazon, Ebay and Otto.
Source: Stern
