E-commerce platforms like Shein and Temu are gearing up for high logistics traffic volumes and have, therefore, secured large amounts of cargo space ahead of time.
Gu Zhenzhong, UPS China’s vice president of supply chain operations, revealed this on the sidelines of the China International Import Expo.
This has apparently now created a “scarcity” in the market, “driving up shipping costs.”
Earlier this week, Locate2u reported that Chinese e-commerce companies have been occupying prime warehouse real estate across the US lately to be closer to the American consumer.
Temu and Shein push logistics in a new direction
The demand e-commerce giants Temu and Shein are creating are reshaping what consumers are buying. However, this creates a real-time challenge for other business owners.
If the reports are anything to go by, reserving tons of cargo space leaves other business owners scrambling, driving up costs.
Businesses could consider logistics software that can help predict the best times and rates, making the unpredictable a bit more manageable.
Temu is facing legal woes
Last month, the EU officially launched a legal battle against Temu. It has been accused of selling illicit products to customers.
A formal investigation is now underway. According to The Guardian, numerous similar complaints had been lodged with the European Commission.
Earlier this year, Temu also faced serious claims of selling padded crib bumpers, which are illegal in the US. It failed to meet safety standards and posed a high risk of suffocation.
PDD holdings see great financial benefits
Despite the legal woes, PDD Holdings, which owns Temu, has experienced an 86% revenue rise and 156% profit increase for the last quarter.
According to Insider Monkey, overall, PDD ranks 8th on its list of the best low-volatility stocks to invest in.
NOW READ:Why Indonesia banned Temu (and why other countries won’t follow)
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
