Introduction to the Investigation
Germany’s Federal Cartel Office announced an investigation into Chinese e-commerce giant Temu, examining conditions for merchants and the company’s treatment of suppliers. Andreas Mundt, president of the competition watchdog, stated that more than 100 million users of European marketplaces visit temu.com every month.
Reason for the Investigation
The trading platform has been open to German providers for almost a year. The investigation is based on the suspicion that Temu could set unreasonable price conditions for traders on the German marketplace. Such measures could pose a dramatic threat to competition and ultimately lead to price increases in other sales channels.
Investigation Details
The investigation is officially directed against the EU-wide parent company Whaleco Technology Limited (Temu), based in Dublin. Temu has an estimated 19.3 million active users in Germany, which corresponds to well over a quarter of the adult population.
Financial Performance
There are no reliable figures on Temu’s sales or trading volume, but experts agree that revenue increased sharply in 2024 due to expansion in Europe and America. Estimates for annual revenue range from about $30 billion to $70 billion, doubling or quadrupling the 2023 value.
Previous Criticisms
Temu was also criticized by a European Commission investigation in July this year. The company was accused of violating EU laws by not doing enough to combat the sale of illegal products on its platform.
Impact on the Market
The investigation highlights concerns over the company’s business practices and their potential impact on the market. With its large user base and significant revenue, Temu’s practices can have far-reaching consequences for competition and prices in the European market.
