Use it at your own risk, expert says

An expert is warning people to be aware of the marketing tactics used to spread the digital shopping app Temu.

The platform, which encourages users to share the app with friends, sells a wide range of low-price products – from clothing to home appliances.

Owned by Chinese e-commerce company Pinduoduo, it has been installed on nearly 50 million devices worldwide and was made available to Kiwis in March.

It is being advertised heavily across social media and even bought a coveted spot in this year’s Superbowl commercials.

Marketed as a platform to “connect its users to sellers worldwide”, the app also sends money to users’ Paypal accounts if they share a link or code with their peers.

While this may seem too good to be true, technology commentator Ian Howard says this method of advertising isn’t uncommon.

“It makes perfect sense because the big expense for these platforms to grow is to find new users, and it’s a hell of a lot cheaper than having to advertise,” he told 1News.

The use of so-called affiliate marketing is frequent among social media influencers. But with Temu, users do not need a large following – all they need is an email.

Howard said users should be wary of these marketing tactics.

“You're basically prioritising getting a bit of cash from Temu over the privacy of your friend because the minute you share that email address, you’re saying to Temu: ‘This is someone I know. This is someone you can now target’. ”

Jorgia Dicken downloaded the app after seeing it on video sharing platform TikTok and has since received $70 from the company.

“At first, you have to send the link to anybody, and it can even be yourself. But then after getting 80 points, you need to send it to new users to get them to sign up,” she said.

Dickens shared her referral link with nearly 30 people before she was sent money. But she’s still not completely sold on it, feeling uncomfortable about the business model.

But social media expert Jessica Maloney thinks it’s all just clever marketing.

“What we see with Temu is another example of a straight-to-consumer business model from Chinese manufacturers, which utilises word of mouth and addictive adrenaline-filled shopping,” she said.

Maloney said Temu’s referral marketing creates competition among users, which in turn, leads to increased engagement.

“It gives the consumer a social credit which we can be obsessed with, like when Uber ratings first came out.”

This isn’t the only feature hooking users in. Temu also uses spin wheels and games to reward consumers with discounts and store credit.

Howard called this the “gamification” of online shopping.

“Everyone probably gets the same discount, but the fact that you feel like a winner and it lands on a big number is going to mean you want to spin that wheel again.”

In April, a US government agency accused Temu of being tied to data risks, sourcing violations, and trade loopholes.

CNN last month also reported malware being found on Pinduoduo’s Android app, allowing the company to gain access to users’ private data and settings.

This came one month after US lawmakers also targeted China-based TikTok for alleged spying.

But with downloads only on the rise, users don’t seem to be concerned with these allegations.

Howard said this is something that needs to be acknowledged.

“I think people who do have the app on their phones right now need to be aware that it probably does mean you're being profiled, and you're going to be hit with a whole lot of stuff that you maybe don't want to be hit with.”

He explained while Temu’s affiliate marketing may not be illegal, user data collection needs to be transparent.

“If you know exactly what they’re taking and exactly what they’re going to do with that, and you still come to the conclusion that it’s OK, then all power to you. Use it at your own risk.”

Consumer NZ says they are looking into the site.

Temu has not responded to a request for comment from 1News.

– Additional reporting by Archie Milligan