Temu vs. Shein: What Online Shoppers Need to Know

If an item arrives that’s broken or doesn’t match its website description, both Temu and Shein have return processes and customer service departments. However, some customers decide that the products cost so little that returning them isn’t worth the expense or hassle, choosing instead to simply discard or donate them. That has led to a glut of products from Shein and Temu at thrift stores, McCarty says.

How do they keep price so low?

Shein maintains that its low prices also reflect its “on-demand” production model, in which it manufactures items in small batches of just a few hundred items at once. That means the company does not have to store or manage unsold inventory in the same way that many competitors do. Temu uses a similar business model.

But there are other factors as well that put a lid on costs. Shipping directly to consumers from the manufacturers means that the sites don’t have to pay for warehousing costs in the United States. They also benefit from a trade provision known as the de minimis exception. Under that exception, individual packages worth less than $800 do not have to go through normal customs processes for commercial goods or pay duty or import taxes on their products.

However, in addition to passing the tax savings along to consumers, skipping customs also means that the manufacturers don’t face the same regulatory scrutiny into the safety of their products or their manufacturing practices.

“There are a lot of questions around the labor that goes into the manufacturers that they select,” says Melissa Minkow, director of retail strategy at e-commerce technology vendor CI&T. “There’s definitely a lack of transparency around the vendors they have relationships with. They are certainly choosing vendors that may have questionable labor practices.”

In an emailed statement, a Temu spokesperson said that Temu is committed to ethical labor practices and requires all partners and suppliers to comply with local labor laws. In response to a request for comment, a Shein spokesperson shared a July statement from the company that said that it supported a reform of the de minimis policy.

Where did Shein and Temu originate?

In a word, China.

While Temu’s website says it was founded in Boston in 2022, its parent company Pinduoduo has operated in China since 2015. The company maintains a network of thousands of Chinese suppliers who ship items directly to U.S. consumers. The site’s inventory is largely unbranded and ranges from electronics and housewares to fashion items.

Shein, on the other hand, launched in China in 2008 before moving to Singapore in 2019. Unlike Temu, Shein focuses primarily on fashion merchandise. However, it is similar to its competitor in that it typically ships items directly to American consumers from its Chinese manufacturing facilities.

Both companies have exploded in the U.S. market over the past two years. A June 2023 report found that the companies combined sent nearly 600,000 packages per day to the United States, a figure that likely went up significantly in the past nine months.

Is it safe to shop at these companies?

Both sites claim to follow security best practices with customer information at checkout. But the U.S.-China Economic and Security Review Commission has raised concerns about data risks associated with the sites.

If you’re worried but still want to shop with them, one way to protect yourself is to opt not to save your financial information on the site and to use a disposable virtual credit card to pay for your purchase. Available through most credit card issuers, disposable virtual cards are single-use numbers that are different from the ones on your credit card.