The U.S. safety regulator has called for an investigation into Temu and Shein over the sale of "deadly baby and toddler products."

The U.S. safety regulator has called for an investigation into Temu and Shein over the sale of "deadly baby and toddler products."
The U.S. safety regulator has called for an investigation into Temu and Shein over the sale of "deadly baby and toddler products."
  • The CPSC commissioners are calling for an investigation into the safety practices of Temu, Shein, and other discount e-commerce platforms.
  • Over the past year, Temu and Shein have gained popularity in the U.S. because of their affordable clothing, electronics, and household items.
  • The commissioners wrote that they aim to comprehend these companies better, specifically their emphasis on low-value direct-to-consumer sales.

The two U.S. Consumer Product Safety Commission members are calling for an investigation into the safety practices of foreign-owned e-commerce platforms, such as Shein and Temu, specifically with regards to the alleged sale of deadly baby and toddler products.

The CPSC Commissioners, Peter Feldman and Douglas Dziak, stated in a letter on Tuesday that the agency should investigate Temu and Shein's safety and compliance controls, their relationships with third-party sellers and consumers, and any representations they make when importing products.

The commissioners aim to gain a deeper comprehension of these companies, specifically their emphasis on low-value direct-to-consumer shipments, commonly referred to as de minimis, and the difficulties in enforcing regulations when firms with minimal U.S. presence distribute consumer products through these platforms.

While Shein sells children's hoodies with drawstrings that regulators have said are a safety hazard, last month, The Information reported that Temu was offering padded crib bumpers, which are outlawed in the U.S. due to suffocation hazards.

CNBC did not receive immediate responses from representatives of Temu and Shein when requested for comment.

In the US, Temu and Shein have gained immense popularity by aggressively marketing online and providing affordable products from China, such as a $3 pair of shoes or a $15 smartwatch.

In 2017, Shein launched in the U.S. and has recently advertised heavily on Google and Facebook to expand. The company is reportedly valued at $66 billion. On the other hand, Temu, owned by PDD Holdings, debuted in the U.S. in 2022 and has spent billions of dollars on marketing, including a "Shop Like a Billionaire" TV spot that ran during the Super Bowl. This has attracted the attention of major e-commerce players, including Amazon, which has sought to launch a competing discount storefront, as previously reported by CNBC.

The Information reports that CPSC officials are requesting additional funding to hire staff to monitor the safety practices of emerging e-commerce platforms like Temu and Shein.

The platforms are being scrutinized by lawmakers. In April, a congressional commission released a report detailing issues with Shein, Temu and other "Chinese 'fast fashion' platforms." The report alleged that these sites have numerous product safety hazards, are connected to the use of forced labor and are exploiting trade loopholes, among other concerns.

Temu faces a challenge in capturing market share from established e-commerce giants.

Temu still has 'a long way to go' in taking market share from larger incumbent e-commerce players
by Annie Palmer

Technology