Temu, a relatively new online marketplace, has more than 100 million active users in the U.S. But with IP infringement common on the platform, here’s what brands should know about safeguarding their reputations and products on Temu and other emerging marketplaces.
What is Temu?
An e-commerce site, Temu is a newer player in the world of marketplace platforms. Owned by Chinese commerce giant PDD Holdings, Temu offers users around the world access to inexpensive consumer goods, including household items, fashion, toys, and more.
The majority of Temu products are shipped directly from warehouses in China to consumers. Their American site went live in September 2022, and by February 2024, Temu reached the milestone of having 100 million active users in the U.S. [Source: Statista]
When compared to Amazon and eBay, products on Temu are often cheaper. Yet the company has a less-than-stellar “C+” rating from the Better Business Bureau. Numerous complaints about false advertising, suspicious listings, shoddy products, and poor customer service have sparked negative public attention.
The Benefits of Temu and Other Emerging Marketplaces
For many brands, listing their items on Temu and other new marketplaces comes with a host of rewards, including access to additional audiences. With Temu, businesses can reach previously untapped demographics and geographic areas.
The global nature of these sites means that brands can expand their consumer base across the world while leveraging online advertising to appeal to a larger audience than ever before.
Marketplace platforms like Temu streamline the online sales journey for brands, taking care of logistical and backend concerns. They also collect data on customer behavior, which brands can use to market more efficiently.
What are the Risks Associated with Temu and Newer Marketplaces?
While brands and wholesalers benefit tremendously from selling on Temu and other direct-to-consumer platforms, there are a number of serious pitfalls and challenges that come along with these sites.
1. In recent months, Temu has gained notoriety for allegedly collecting information on its consumers without their consent, which in some regions is a violation of local law. A lawsuit filed in Illinois charged that Temu is illegally storing sensitive information on its shoppers, and then selling that data to third parties.
2. As is the case with many online platforms, brand protection is a major challenge for Temu. IP (Intellectual Property) Infringement is rife on the site, with unauthorized sellers using images, logos, or even product names associated with specific brands to falsely purport that they are selling authentic goods.
Soccer icon David Beckham recently won a lawsuit against sellers on numerous online platforms that had committed IP infringement against his brand, DB Ventures. A judge ruled that these third-party sellers on various online marketplaces must remove their listings which falsely perpetuated that they were selling authentic David Beckham products, as well as pay him for damages to his brand reputation.
While Temu does have an IP policy that states it will remove unauthorized listings, many designers and brands have accused the site of intentionally ignoring blatant cases of infringement.
3. Grey Market activity is rampant in Temu and similar marketplaces. This means that sellers buy authentic products and resell them at a profit or discounted rates, without the permission of the brand. Shadow products, which see sellers listing items that they don’t actually carry, are also a major issue on Temu and other emerging e-commerce sites.
Additionally, fake marketplaces, which exist solely to fraudulently obtain unsuspecting consumers’ financial information, pose a threat to users.
Consumer protection, data security, and safeguarding your reputation as a reliable, trustworthy brand are all top-of-mind concerns for businesses operating on these platforms.
It’s clear that marketplace brand protection is critical for keeping your company’s image and consumers safe and protecting revenue streams. But with millions of listings across thousands of online marketplaces, you need a robust strategy to ensure you have the right brand protection for today’s digital landscape.
Brand protection technology, which keeps you up-to-date regarding all the uses of your business’ product names, logos, and associated images, can help you stay on top of potential IP infringement and other concerns.
How to Navigate Marketplace Risks
There are a number of steps businesses can take to secure their brand protection across online marketplaces.
Vigilant Monitoring
Regularly monitor the marketplace for unauthorized sellers and counterfeit products. Brands should invest in technology solutions that can scan these platforms for infringements and quickly identify potential threats to their intellectual property.
Robust IP Enforcement
It's essential to aggressively enforce your Intellectual Property rights. This includes registering trademarks, copyrights, and patents, and taking swift legal action against violations.
Partnering with Marketplaces
Work closely with the marketplace platforms to ensure that they understand your brand’s importance and cooperate in its protection. This partnership might include sharing data about known infringers, participating in pilot programs for brand protection, and advocating for stronger protection policies and tools.
BrandShield empowers brands with the ability to take down fraudulent listings across multiple marketplaces simultaneously. When time is of the essence, being able to remove problematic listings on multiple marketplaces, all at once, is crucial for minimizing the damage caused by IP infringement.
Leverage Human Expertise & Advanced Technology
BrandShield’s enforcement managers and threat hunters are IP professionals, with extensive, hands-on legal expertise and real-world knowledge of the most effective techniques for online marketplace protection. They regularly perform takedowns across all online marketplaces simultaneously, with a staggering 98% success rate.
For maximum protection from fraudulent listings, which can cause serious damage to your brand reputation and customers, you need to adopt an all-encompassing approach towards marketplace brand protection.
An independent and comprehensive brand protection solution helps cover all your bases, ensuring that you can safeguard your brand across multiple online marketplaces.
Talk to BrandShield to learn more about how we can empower you with the tools you need to ensure that your brand’s reputation and intellectual property are safeguarded from IP infringement and fraudulent listings.
