Kik's Founder Slams Market Inequality in Shein and Temu Treatment
In a blunt speech at the Economic Journalistic Association meeting in Düsseldorf, Kik's CEO Patrick Zahn voiced his concerns over seemingly lenient regulation towards Asian e-commerce giants like Shein and Temu. Zahn claimed that "this is a glaring injustice," as these platforms operate with minimal compliance to established regulations.
The discrepancy in regulation, according to Zahn, grants Shein and Temu unfair advantages. One such advantage is the low customs duties that predominantly air-freighted merchandise from non-EU countries enjoys, with no customs charges on packages below 150 euros upon import.
Zahn argued that such lax customs regulations are unjustified, as Kik and other European retailers bear the burden of paying customs duties. This situation, he noted, further exacerbates unjust competition between local retailers and these Asian e-commerce giants.
Zahn accused the European market of applying double standards. In Liège, Belgium, where approximately 400,000 to 500,000 Temu and Shein deliveries are made daily, inspection of packages is practically non-existent. He stated, "It's strange the way we do things."
The Supply Chain Act, intended to impose stringent regulations on European companies, falls short in addressing the issue of online retailers like Shein and Temu, Zahn lamented. Despite the awareness of the situation among politicians, no appropriate action has been taken to address this issue.
Shein and Temu's popular success in the German market has placed significant pressure on domestic retailers. Numerous fashion items and shoes to the value of around one billion were purchased from these platforms last year. However, these online retail portals are embroiled in controversy, with challenges related to product quality, disputable complaint procedures, and manipulative tactics.
Zahn argued against the lack of regulation for these foreign retail giants, demanding fair competition in the market. He did not shy away from criticizing traditional retailers who, he believes, are disadvantaged by the laissez-faire regulation of Asian e-commerce platforms like Shein and Temu.
Additional Insights
- Shein and Temu are currently grappling with issues concerning European regulations, specifically customs duties and their impact on traditional retailers.
- The European Commission is contemplating the abolition of the de minimis tax exemption for goods worth below 150 euros from non-EU countries, with a view to overcoming the associated costs of customs inspections and maintaining safe and EU-compliant goods.
- The Commission is also conducting investigations into Shein and Temu's adherence to European consumer protection laws, with the concerns extending to unsafe products.
Further Reading
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- [German Car Manufacturers Struggle with Decreased Sales][3]
- [Working Hours Controversy: Recording or Flexibility?][4]
