Temu’s Sale Strategy is A Question Mark for American Patent Holders

Temu and PDD

Today, finding a product online often means wading through numerous ads from Temu and other e-commerce platforms, boasting seemingly unbeatable prices, before reaching offerings from competing retailers.

Those who watched this year’s Super Bowl likely encountered three Temu commercials, sparking curiosity about the company’s origins.

Initially an offshoot of the major Chinese e-commerce platform Pinduoduo, Temu began by selling heavily discounted goods directly from Chinese manufacturers.

However, the company has since evolved into an A.I.-driven e-commerce website, replicating the designs of numerous U.S.-based retailers, both large and small.

Recent class-action lawsuits allege that Temu failed to protect customers’ personal data and engaged in misleading practices.

Temu has denied these allegations and expressed its intent to contest the lawsuits, but these legal battles only scratch the surface of broader concerns for business owners.

Temu and PDD

As an inventor, entrepreneur, and small business owner holding multiple patents, I have firsthand experience with the economic challenges posed by Temu and similar foreign entities undercutting domestic businesses, largely due to lenient U.S. government policies.

As a creator on TikTok, I witness the behind-the-scenes corruption in e-commerce, often involving unethical practices and fraud. This includes fake reviews to manipulate product ratings, counterfeit products, and deceptive pricing strategies.

The U.S. government’s permissive policies have facilitated economic growth for foreign countries by allowing them to exploit intellectual property without repercussions.

These companies take advantage of legal disparities between countries, making it costly for small businesses to pursue legal action against them.

Additionally, foreign businesses benefit from significantly lower shipping costs, thanks to the terms of the Universal Postal Union (UPU) Treaty.

While international shippers, including those from China, pay minimal fees to ship to the U.S., domestic businesses face much higher shipping costs for domestic shipments, giving foreign businesses an unfair advantage in pricing and revenue.

Temu and PDD

While the U.S. government has implemented fair trade policies to protect domestic industries in sectors like steel and automobiles, online e-commerce presents a loophole for foreign companies to evade scrutiny and gain a competitive edge.

This increased competition can lead to wage stagnation and job losses among domestic firms struggling to compete on price.

The impact on American business owners has prompted me to engage with the United States Patent Office to address these issues. However, the response has been inadequate, with foreign operations continuing largely unchecked.

Urgent reforms are needed to address these vulnerabilities, including strengthening legal frameworks, enforcing online regulations, and increasing consumer awareness of counterfeit products.

By implementing these recommendations, policymakers can safeguard economic interests, protect intellectual property, and promote fair competition in the e-commerce marketplace.

Nate O'Hara
Nathan is a seasoned commerce writer with a passion for unraveling the intricacies of the business world and distilling them into engaging narratives. During his academic journey, he delved deep into subjects like economics, marketing, and entrepreneurship, honing his analytical skills and developing a keen understanding of market dynamics.