In a crackdown on ecommerce platforms found to be selling dangerous, counterfeit or illegal goods, regulators are set to hold the marketplace on which they are sold responsible for the products.
Temu, Shein and Amazon will now be made accountable for the goods that they sell on their platforms and they will no longer be able to deflect responsibility to third-party sellers or customers using their platforms.
A draft proposal in the EU customs reforms requires these marketplaces to provide data before goods arrive in the EU, allowing officials to better control and inspect packages, reported the Financial Times.
Temu and Shein offer ultra-cheap goods made in China and have been accused of attempts to flood markets, including that of Australia, with substandard goods, some of which pose a threat to consumer’s health and safety.
“The surging volume of products that are unsafe, counterfeit or otherwise non-compliant leads to serious safety and health risks for consumers, has an unsustainable impact on the environment, and fuels unfair competition for legitimate businesses, with a significant impact on competitiveness in different sectors,” said the EU proposal.
Under existing rules, any individual in the EU who purchases goods online is treated as the importer for customs purposes. But the reforms attempt to change that and states that online retailers would have to “collect the relevant duty and VAT” and “ensure the compliance of the goods with other EU requirements”.
It also abolishes a current exemption for goods worth less than €150 (A$250) from paying duty, making them subject to customs checks.
Counterfeiting costs the clothing industry close to A$19.98 billion in annual sales (5 per cent of revenue), the cosmetics industry A$4.99 billion (5 per cent of sales) and the toy industry A$1.66 billion (almost 9 per cent of sales).
In Australia, leading voices in the retail industry have called for closer scrutiny of Temu and Shein which have seen remarkable growth in the country over the last two years. It estimated that Temu and Shein together had close to A$3 billion in annual sales in the 12 months to June 2024, which includes A$1.7 billion for Temu and A$1.1 billion for Shein.
Harvey Norman’s executive chair, Gerry Harvey, recently called for a government inquiry into Shein and Temu.
“(Shein and Temu) are a … pariah, it’s a very difficult situation for Australian retailers to combat,” he told a national newspaper. “They never pay any tax here, they don’t employ anyone.
“There should be a government inquiry into it as to what ramifications are there and whether they should or shouldn’t do something about it. It’s a real worry, do you let it just go or not, I think it’s worth an investigation.”
Following an incident where an 8-year-old Queensland girl was burned after wearing a jumper sold by Temu that had no fire safety warning last year, Temu is now believed to be working with the Australian consumer watchdog, the Australian Competition and Consumer Commission (ACCC), to sign a voluntary product safety pledge.
