đď¸ Shop Till You Drop...: How Temu exploits TikTok's affordances
By Alexander Hohlfeld and Kathy MeĂmer
With over 50 million active users and more than 3 million downloads in the weeks before Christmas, the app âTemuâ is dominating both the Google Play and the App Store charts.
Temu was founded in July 2022 as a subsidiary of the Chinese company âPDD Holdingsâ, only a few months after PDD Holdings´ shopping app âPinduoduoâ was suspended from Googleâs Play store due to security concerns and malware issues. The app faced drastic accusations from researchers. It might continuously run in the background, preventing itself from being uninstalled and thereby pushing its monthly user base. It might have the ability to spy on tracking activities of competing shopping apps or even the social network accounts of users.
The rebranding as âTemuâ for Western countries and the relocation of its office for the European market to Dublin can be interpreted as attempts to distract from the scandals of its mother company. However, this should not obscure the fact that Temu is also struggling with serious consumer protection problems.
First of all, similar data privacy concerns have already been expressed about the Temu app as with the earlier Pinduoduo app.
Second, Temu considers itself not an online shop but rather an âonline marketplaceâ, even though that is barely visible to the user. In a previous version of its Terms of Use from August 29th, Temu used that position to distance itself from the products it sold and denied any liability:
âWe do not have control over and do not guarantee the existence, quality, safety, suitability, or legality of the Products or the truthfulness, accuracy or legality of any information contained in the Product listings or other information provided by Sellers or other usersâ.
In the latest version of the Terms of Use from December 29th, this has been updated and Temu admits its liability âfor slight negligent breach of essential obligationsâ. What this means in practice still needs to be investigated.
Third, products on Temu are extremely cheap and it can be assumed that this goes hand in hand with low quality and a lack of consumer protection standards. Many products offered on Temu have astonishing optical similarities with products of famous brands, thus moving on the border being considered as counterfeit products.
Finally, Temu is working with highly deceptive design practices. There are indications that some of these could be considered as misleading practices under European competition law. According to the EU Directive on Unfair Commercial Practices a practice shall be regarded as misleading if the practice is âlike to receive the average consumerâ and is âlikely to cause [..] a transactional decision that he [the customer] would not have taken otherwiseâ. This includes, for example âphony âfreeâ offersâ, âdark design patternsâ, such as âfake countdownsâ, âfalse offers of prizes, giftsâ or âfalse use of limited offersâ.
Screenshot of a price wheel on temu
Temu is promoting price wheels all throughout the app, which usually offer supposedly âfreeâ products. At first glance, it is not obvious to the user that the products advertised as âfreeâ are in fact not free at all. The user needs to order a certain amount of other products to be able to proceed with the order. The âprice wheelsâ also do not seem to work randomly, but in fact propose that the user would get the âJackpotâ almost all the time. A constant flood of notifications on allegedly free products or prizes is pressuring the user and creating âFOMOâ (fear of missing out). Until recently, a countdown in the upper left corner offered âFree Shippingâ and restarted as soon as the countdown ended. But this might just be one example of fake limited offers on Temu. Opening the website or the app reveals an avalanche of countdowns and supposedly time-limited offers. While a more detailed legal investigation would be desirable, it seems obvious that these practices can have deceptive effects.
As a reader of our blog â that is about auditing TikTok â you might wonder: What does this have to do with TikTok? We argue that the success of Temu is, to a large extent, built on the platform affordances of TikTok. No app or product has ever exploited the platformsâ logic this systematically before.
The screenshot above is from TikToks Trend Analysis site for marketers and shows that the #temu hashtag was used more than 53.000 times last year in Germany alone. For comparison, the hashtag #amazon was used 50.000 times in that time.
Temu is extremely present on TikTok. Videos with the hashtag âtemuâ generated a total of 9.9B views, #temuhaul a total of 3.4B views and #temufinds 2.5B views (09.01.2024). What makes Temu so successful on TikTok is that they perfectly understood the platform and developed strategies to exploit its platform logic. Their strategy builds on three main pillars:
- Influencer Program
- Affiliate Program
- Gamification efforts
The Influencer Program: Temu is trying to recruit influencers with a mix of free products and monthly âinfluencer cashâ. The key to its strategy is not to focus on specific or famous influencers. Instead, everyone with more than 300 followers can register for their program. That strategy makes it possible to flood TikTok with the content of so-called âNano-influencersâ. Temu proudly claims that â10,000+ influencers have already collaborated with Temuâ. At the same time, the influencer program uses gamification strategies. Influencers are encouraged to âjoin campaignsâ, âpost and shareâ and thereby earn âbenefitsâ (mainly Temu vouchers).
The Affiliate Program: The so-called âAffiliate Programâ takes this strategy to another level. To join, a user does not even need to have 300 followers. Everyone can create affiliate codes which are then shared on TikTok to receive a commission. This leads to a flood of spam content and comments from people promoting their affiliate codes. The registration is quite simple; all it takes is a Temu and a social media account (Instagram, TikTok or YouTube). With notifications like âxx earned 2.817,59âŹâ, a starting balance of â3âŹâ and statistics that are framed as games (such as âRanking Raceâ or âReferral Raceâ), the users are encouraged to share their codes and referral links. Temu specifically encourages users to share them âin your bioâ, âin your postâ or âSend to your friendsâ. The promises of quick money (2⏠reward for each download through the referral link) and large sums (e.g., 5,000⏠bonus) are especially tempting for young people, leading them to spam social media network sites such as TikTok with their affiliate codes.
Screenshot of the affiliate program screen in the Temu app
Although Temu (hidden under âmore detailsâ) points out that, â[u]nauthorized commission obtained through false advertising or posting referral codes as irrelevant comments on any videos or app stores is prohibitedâ, we were able to find a large number of such comments on TikTok.
Gamification Efforts: Temu is also offering different gambling-like mini games, creating group pressure, to which young people are particularly susceptible:
- âTemu Fishland Game is an underwater adventure that allows players to catch fish and earn money based on the size and rarity of their catch.â
- âTemu Farmland is a farming simulation game where players can grow crops, raise animals, and sell their produce for a profit.â
- âTemu Redeem Cash is a game that offers users the chance to win real money by redeeming coins earned through other Temu games.â
- âTemu Lucky Flip is a game of chance where players can win big by flipping a coin and guessing the outcome correctly.â
- âTemu Free Gift is a daily bonus game that rewards users with free coins and prizes just for logging in.â
While constantly pushing the user to new price wheels for allegedly âfree productsâ, encouraging users to share codes and links as well as strong gamification efforts, the combination of Temu with social media platforms like TikTok might cause consumer protection harms that need further investigation. We are currently investigating these harms, that result from the exploitation of TikTok´s affordances by e-commerce platforms like Temu or âfast fashionâ apps like âSheinâ. Follow our blog to not miss our next articles.
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