March 13, 2024
Harvey Norman chair Gerry Harvey says Temu is unlikely to survive as quality over quantity will win out as consumers prefer to buy from trusted brands.
His comments came amid Temu’s growing popularity since launching in Australia one year ago, with the retailer becoming well-known for offering shockingly low prices across a variety of products.
But Mr Harvey said customers would always prefer to purchase big-ticket items from trusted brands.
“If you’re going to sell appliances, whether it’s a toaster or a power tool, you want to know what the brand is,” he told The Nightly.
“People buy (cheap goods) and then the next time they buy, they go back to a brand.
“I wouldn’t buy a product that didn’t have a brand . . . you could end up getting a dud nine times out of 10.”
Mr Harvey also questioned the Chinese e-commerce giant’s business model, which relied on keeping costs rock bottom by connecting consumers directly with suppliers.
“The only ones that in my opinion will ever survive long-term and do well are the ones that have got (brick-and-mortar stores) as well as online,” Mr Harvey said.
“And if they haven’t got the two together, I don’t see many of them ever surviving.”
Temu’s increasing popularity has raised concerns around cyber security and consumer data.
“We know that data stored in China is subject to the Chinese government’s national intelligence laws and can be accessed by the Chinese Government, which is why it is crucial that Temu is transparent with its users about the data it is collecting and where it is stored,” Shadow Home Affairs and Cyber Security Minister James Paterson told The Nightly this week.
“The Australian Government should also look closely at this application to see if it poses national security risks, and if so, they should consider banning it from Government devices as they did with TikTok last year.”
Cyber security expert professor Paul Haskell-Dowland said this week Australians needed to realise that every bit of their data was valuable, and “everywhere we put it” is one more opportunity to become a target.
The professor of cyber security practice at Edith Cowan University said one concerning factor about Temu was the China connection, which meant the company needed to answer to their government.
“We know that organisations with connections in China — particularly when they are Chinese companies — do have to answer to the Chinese Communist Party,” he said.
“It basically gives the government effectively free rein to access any data that they choose.”
Meanwhile, US lawmakers have warned of “extremely high risk” products sold on the website were made with forced labour.
Temu has denied the claims and said reports of alleged poor working conditions were “completely ungrounded”.
