Test purchases from the Temu.com marketplace did not meet European requirements
Due to the administrative costs related to product safety and consumer protection, the purchase prices paid by Chinese sellers are 30–40 percent lower than those paid by Finnish stores for comparable products. However, it’s not always about comparable products, as items sold on marketplaces in third countries often do not meet European requirements in terms of labeling, traceability, or quality. This was clearly evident in test purchases made in May 2024 on the marketplace Temu.com.
The EU Product Safety Regulation requires that all products sold on the internal market are safe and comply with the legislation applicable to each product group. However, Finnish supervisory authorities, particularly the Customs and Finnish Safety and Chemicals Agency (Tukes), are often powerless in the face of online sales from outside the EU.
“While Finnish retailers pay administrative costs, such as for product monitoring and labelling, standards and testing, Chinese marketplaces bring goods to the market without the costs of obligations,” says Kari Luoto, Managing Director of the Finnish Commerce Federation, describing the unfair competitive position.
European stores have an unfair competitive position compared to operators outside the EU
The Finnish Commerce Federation has estimated that administrative costs related to product safety alone increase the purchase prices of Finnish commerce companies by several tens of per cent compared to Chinese competitors.
“For example, for a Chinese operator, the purchase price of a fully equivalent toy is only 61 per cent of the purchase price paid by Finnish commerce. The product may not even be exactly the same; instead, it may be made of cheaper and even hazardous materials,” says Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation.
Based on the test purchases made on the Temu.com marketplace in May 2024, the suspicion is justified. None of the 14 products ordered would have met the requirements for a European seller. The most common issues were related to packaging and product labelling, as well as inadequate care instructions and instructions for use.
The test results of six purchases exceeded the hazardous substance limits, and one product – a remote-controlled toy car – was already unusable. The clothing purchases, on the other hand, passed chemical tests, i.e. no prohibited dyes were found, for example. On the other hand, the clothes were poorly made; they did not match the image of the product on the marketplace, or the material was thin and transparent. The product labelling also did not meet the requirements.
Marketplaces must bear responsibility for the products they sell
The unfair competitive position would be levelled if market surveillance at EU level was more effective. Cross-border cooperation between market surveillance and customs authorities could be enhanced in order to improve the supervision of online marketplaces and online stores in third countries by, for example, removing legislative barriers to data transfer and by increasing resources.
“Marketplaces must be held responsible for the products sold on the platform. Then they would also have an incentive to monitor the conformity of products, which they do not currently have,” Luoto suggests.
“The new Commission should also have its own jurisdiction in the market surveillance of online stores located in third countries. The Finnish government should strongly promote these measures in the EU to improve the equal competitive conditions of companies,” Luoto continues.
For further information, please contact:
Kari Luoto, Managing Director, Finnish Commerce Federation, tel. +358 (0) 400 688 708, kari.luoto(at)kauppa.fi
Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation, tel. +358 (0)40 820 5378, jaana.kurjenoja(at)kauppa.fi
