It faces tighter regulations as the EU also restricts e-commerce

© Timon Schneider

It’s not just the United States that is starting to take a closer look at the e-commerce industry. Last week, the EU designated Temu a very large online platform (VLOP), which means it will be subject to stricter regulations.

While this does not directly impact Temu’s logistics, tighter compliance rules may have an impact on demand: some cheaper products, perhaps because they are counterfeit or potentially illegal, must be checked and removed from the platform.

Ago has around 75 million monthly users in the EU, which under the Digital Services Act means it must meet other rules within four months of receiving VLOP status.

Under the rules, it must “carefully analyze specific systemic risks in relation to the dissemination of illegal content and products” and also address threats such as the listing and sale of counterfeit goods and dangerous products.

Consumer groups complained that Temu was failing to protect consumers by failing to provide sufficient traceability to its traders. Consumer organization BEUC also said it used “manipulative practices”. Last month it was alleged that: “Tiem breaches the EU’s new online content law, the Digital Services Act, on all the above points and the authorities must now investigate.”

Compatriot Shein was appointed to the VLOP in April this year, but has his eye on the UK and European markets. He is expected to soon file plans to list the company on the London Stock Exchange as a stock that could value it at around 50 billion pounds ($64 billion).

The EU also proposes to abolish the 150 euro ($1 §63) slightly threshold from 2028. Last year it was stated: “Maintaining the customs duty exemption for goods (worth) up to EUR 150 has left the door open to systematic abuse of this threshold by undervaluing and splitting shipments…

“A study conducted by Copenhagen Economics in 2016 estimated that approximately 65% ​​of e-commerce shipments are undervalued at customs.

“The competition is therefore distorted. The duty exemption favors third-country e-commerce operators over EU traditional traders and retailers, who have to pay customs duties on bulk imports, and encourages the creation of e-commerce distribution centers outside the EU.

Airlines should monitor the developments closely.