The Most Evil Company That Took Over The USA

Summary

Teemu, a Chinese e-commerce company launched in 2022, has rapidly expanded globally, becoming the second most visited commerce website. Despite its low prices and high sales, concerns about transparency, product quality, and potential links to slave labor have raised questions about its sustainability and impact on the market.

Takeaways

• 🌐 Teemu is a rapidly growing Chinese e-commerce platform that launched in 2022 and has since expanded to over 50 countries, becoming the most downloaded app in the US in 2023 with over 50 million monthly users.
• 📈 Despite its recent inception, Teemu's sales in January 2024 were up over 800%, making it the second most visited commerce website globally.
• 💰 The company has spent billions on advertising across various platforms like Google, Facebook, Instagram, and TikTok, as well as during high-profile events like the Super Bowl.
• 🔥 Teemu is known for its extremely low prices, offering products like shoes for $20, an Apple Watch for $20, and other items at similarly discounted rates.
• 🛍️ Teemu is a spin-off of Pinduoduo (PDD), a Chinese e-commerce company that gained popularity during the COVID-19 lockdowns, especially in smaller Chinese cities.
• 🎰 Shopping on Teemu is likened to playing a slot machine, with roulette wheels for deals and timers that push customers to make quick decisions.
• 🏭 Teemu operates differently from traditional supply chains by cutting out middlemen and selling products directly from factories to consumers.
• 📊 The platform provides a solution for manufacturers by eliminating the need to predict market demand, allowing them to see which products sell better without the costs of storage and handling.
• 🚫 However, Teemu's products often suffer from issues of quality, with customers frequently dissatisfied and returning to established brands.
• 📉 The company's retention rate is estimated to be around 30%, significantly lower than Amazon Prime's 90%.
• 🛂 The growth of Teemu and similar platforms has raised concerns over import laws, specifically the de minimis thresholds, which may allow for the influx of cheap, potentially low-quality or unsafe products into the US market without proper regulation.

Q & A

What is Teemu and how has it gained popularity?

Teemu is a Chinese e-commerce company that launched in 2022 and quickly spread to over 50 countries. It gained popularity through aggressive advertising on platforms like Google, Facebook, Instagram, and TikTok, as well as through word of mouth due to its extremely low prices. It became the most downloaded app in the US in 2023 and the second most visited commerce website globally.

How is Teemu related to Pinduoduo?

Teemu is a child company of Pinduoduo, the original Chinese e-commerce company that specialized in bulk purchasing of agricultural goods. While Teemu does not use the bulk purchasing model like Pinduoduo, it shares the concept of shopping being akin to playing a game, with deals and timers pushing quick decisions.

What is the business model of Teemu?

Teemu operates by cutting out middlemen in the supply chain, selling products directly from factories to consumers. This allows them to offer a wide range of products at very low prices. They also handle all the marketing, leaving suppliers to focus on production.

Why do investors find Teemu's model appealing?

Investors are attracted to Teemu's model because it provides a solution to manufacturers' need to predict market demand. By listing products directly on the website, manufacturers can see which items sell better and adjust production accordingly, reducing storage and handling costs.

What are the challenges associated with Teemu's long delivery times?

Teemu's long delivery times, which can take up to 15 business days, are a challenge because they require products to be produced and delivered from scratch. This can frustrate customers who are used to faster delivery times from competitors like Amazon.

How does Teemu's model impact product quality?

The low prices and fast production cycles often result in low-quality products. Customers have reported issues with products not matching descriptions, being knockoffs, or being unsafe to use. This has led to a low retention rate compared to other e-commerce platforms.

What is the significance of the de minimis threshold in relation to Teemu?

The de minimis threshold allows packages below a certain value to enter a country without being taxed or regulated. In the US, this threshold is $800, which means most Teemu packages fall under this limit, allowing them to avoid taxes and regulations that other imports must face.

How does the de minimis threshold impact traditional retailers?

The de minimis threshold creates an imbalance of costs between direct-to-consumer Chinese suppliers like Teemu and larger firms that ship in the traditional way. Traditional retailers pay significant tariffs, while Teemu and similar companies avoid these costs, giving them a competitive advantage.

What are the potential negative effects of the de minimis threshold on the US economy?

The de minimis threshold can lead to an influx of cheap, potentially low-quality goods, which can impact domestic industries. It also makes it difficult to enforce rules and regulations on imports, potentially allowing unsafe products or those made with forced labor to enter the country.

What is the future outlook for Teemu and similar e-commerce platforms?

While Teemu and similar platforms are currently popular, there are concerns about their sustainability. Issues with product quality, delivery times, and potential ethical issues could lead to consumer and political backlash. However, the incentives for such platforms are strong, and if one fails, another might rise to take its place.

Outlines

00:00

🌐 Teemu's Rapid Global Expansion and Business Model

Teemu, a Chinese e-commerce company launched in 2022, has quickly expanded to over 50 countries and became the most downloaded app in the US in 2023. It's known for its extremely low prices on a wide range of products, from shoes to electronics. Teemu is a subsidiary of Pinduoduo, a company that initially focused on bulk purchasing of agricultural goods. Unlike its parent company, Teemu targets Western audiences and operates more like a slot machine, offering deals and incentives to encourage quick purchases. Despite its success, Teemu's parent company, PDD Holdings, is not very transparent, with limited employee numbers and opaque financials. Teemu's business model involves direct sales from factories to consumers, cutting out middlemen and offering a solution to manufacturers' need to predict market demand.

05:01

📦 The Impact of Teemu's Business Model on Delivery and Quality

Teemu's business model, which involves selling directly from manufacturers, results in longer delivery times, often taking up to 15 business days compared to Amazon's 2. This model allows manufacturers to test the market by listing all products and observing which ones sell better. However, the extended delivery time and the quality of the products can be a deterrent for customers. Teemu's strategy of listing a vast array of products and observing consumer behavior is similar to that of Shein, a fast fashion e-commerce site. Despite the appeal of low prices, the quality of Teemu's products often leads to customer dissatisfaction and a low retention rate, estimated at around 30% compared to Amazon Prime's 90%.

10:03

💰 The Role of Import Laws in Teemu's Growth

Teemu's rapid growth in the West is partly attributed to the De Minimis thresholds, import laws that allow parcels below a certain value to enter a country without being taxed or regulated. In the US, the threshold is $800, which is significantly higher than in other countries. This law benefits Teemu as most of their packages fall under this limit, allowing them to avoid taxes and regulations. The influx of cheap goods from China, facilitated by these laws, has raised concerns about the quality of products, counterfeits, and the potential for slave labor. The high volume of such imports has also impacted oil demand and chemical production, contributing to environmental and economic concerns.

15:06

🛑 Potential Challenges and Future of Teemu

Despite its initial success, Teemu faces potential challenges that could impact its future. American consumers are known to dislike long wait times for deliveries and are increasingly frustrated with the quality of Teemu's products. There is also a growing movement to reduce the De Minimis threshold, which could affect Teemu's business model. In 2023, a bill was introduced to the US Senate to lower the threshold for non-market economies, primarily targeting China. Additionally, concerns about slave labor in China and the impact on American companies have led to calls for investigations and potential bans. While Teemu may not necessarily be banned, it could face consumer and political pressures that could lead to its decline or the rise of another similar company.

Keywords

💡Teemu

Teemu is a Chinese e-commerce company that has rapidly expanded globally since its launch in 2022. It is known for its low prices and has become a major player in the online retail market, particularly in the US. The company's name is used in the script to illustrate the main subject of the video, which is the rise and impact of this e-commerce giant.

💡E-commerce

E-commerce refers to the buying and selling of goods or services using the internet, and it is the central theme of the video. The script discusses how Teemu has leveraged e-commerce to become a significant global player in a short time, emphasizing its business model and consumer appeal.

💡Bulk Purchasing

Bulk purchasing is a business strategy where goods are bought in large quantities to get a lower price per unit. In the context of the video, it is mentioned as a strategy used by Pinduoduo, Teemu's parent company, which specializes in this approach for agricultural goods, contributing to its success during the COVID-19 pandemic.

💡Supply Chain

A supply chain refers to the network of organizations, people, activities, information, and resources involved in manufacturing and delivering a product or service. The script discusses how Teemu's supply chain model differs from traditional ones by cutting out middlemen and selling products directly from factories to consumers.

💡Market Demand

Market demand is the total amount of a product or service that all consumers wish to buy at a given price. The video explains how Teemu's model allows manufacturers to gauge market demand more accurately by listing products and observing consumer behavior, rather than relying on predictive models.

💡Direct to Consumer (D2C)

Direct to Consumer (D2C) refers to a business model where products are sold directly to consumers, bypassing traditional retail channels. The script highlights Teemu's D2C approach as a way to offer lower prices and a wider variety of products to consumers.

💡De Minimis Thresholds

De Minimis Thresholds are values below which imported goods are not subject to duties or taxes. The script discusses how these thresholds, especially in the US, have allowed Teemu to ship products into the country without incurring additional costs, which contributes to its low prices.

💡Quality Control

Quality control is the process of ensuring that products meet certain standards of quality. The video mentions that Teemu's products are often of low quality, leading to customer dissatisfaction and a low retention rate, which is a significant issue for the company's long-term success.

💡Retention Rate

Retention rate refers to the percentage of customers who continue to use a service or product after an initial period. The script cites a low retention rate for Teemu, indicating that customers are not returning to make additional purchases, which is a critical metric for evaluating customer satisfaction and business sustainability.

💡Pinduduo (PDD)

Pinduduo is the parent company of Teemu and a major Chinese e-commerce platform known for its group buying model. The script uses Pinduoduo as a reference point to explain Teemu's business origins and its rapid growth in the e-commerce space.

💡Manufacturing Base

A manufacturing base refers to a location with a concentration of industrial facilities and capabilities for producing goods. The script mentions China's manufacturing base as the largest in the world, which enables Teemu to offer a vast array of products to consumers.

Highlights

Teemu, a new Chinese e-commerce company, rapidly spread to over 50 countries after launching in 2022.

It became the most downloaded app in the US in 2023, with over 50 million monthly users.

Teemu is the second most visited commerce website globally, with sales up over 800% in January 2024.

The company spent billions on ads across major platforms like Google, Facebook, Instagram, and TikTok.

Teemu's business model involves selling extremely low-priced items, such as shoes for $20 and an Apple Watch for $20.

It is a child company of Pinduoduo, known for bulk purchasing agricultural goods during the COVID-19 lockdowns.

Teemu's shopping experience is likened to playing a slot machine, with deals and timers pushing quick decisions.

The platform operates differently from Pinduoduo, not using the bulk purchasing model but copying its game-like shopping experience.

Teemu's sales in 2023 topped over 5 billion in America, with an 85% traffic increase on Black Friday.

PDD Holdings, Teemu's parent company, is not very transparent, with few employees and opaque financial statements.

Teemu cuts out middlemen, selling products directly from factories, which benefits both manufacturers and consumers.

The platform provides a solution to manufacturers' need to predict market demand, allowing them to produce based on actual sales data.

Teemu's long delivery times, up to 15 business days, are a trade-off for manufacturers to gauge market preferences.

The platform's low-quality products and slow delivery times lead to a customer retention rate of only around 30%.

Controversial growth of Teemu is partly attributed to import laws, specifically the De Minimis thresholds, which allow tax-free and unregulated imports under a certain value.

The US has a high De Minimis threshold of $800, which benefits direct-to-consumer Chinese suppliers like Teemu.

Teemu's business practices and the De Minimis law have raised concerns about counterfeits, unsafe products, and unfair competition.

There is a movement to reduce the De Minimis threshold in the US to address these concerns, with a bill introduced to the Senate in 2023.

The Chinese e-commerce space is resilient, and if Teemu fails, another company is likely to rise in its place.

Transcripts

if you've been on the internet recently

you've probably seen an ad like this or

this or this this is Teemu the new

Chinese e-commerce company that's taken

over the world despite just launching it

in 2022 Teemu has since spread to over

50 countries it was the most downloaded

app in the US in 2023 reaching over 50

million monthly users it is the second

most visited Commerce website on Earth

and in January 2024 sales were up over

800% you might have heard about it from

the literal billions they've spent on

ads across Google Facebook Instagram Tik

Tok or those famous ones from the Super

Bowl or you've heard of them through

word of mouth that's because everything

on Teemu is just so cheap I'm talking

about shoes for $20 an Apple Watch for

20 and a shyy for less than five what

timu is the child of pindu Duo the

original Chinese e-commerce company who

specialized in bulk purchasing

agricultural Goods with your friends and

strangers pin Doo Duo now PDD blew up

during the covid lockdowns mainly in

smaller Chinese cities hit hardest by

losing access to stable Supply chains

teaming up with strangers helped keep

them running smoothly and farmers in

business

teu though built for Western audiences

and regulations doesn't use the bulk

purchasing model like PDD does but they

do copy one thing shopping with Teemu is

like playing a slot machine one 2 3 4

roulette wheels are spun for deals on

your shopping carts timers tick down as

the site pushes you to make a quick

decision purchases can be split into

four separate ones down the line no

matter how cheap the item is and you

feed Virtual Fish to get credit for more

purchases using Teemu is like shopping

at a mix between the thrift store and a

casino and it works in 2023 sales topped

over5 billion in America traffic was up

almost 85% on Black Friday earnings

almost tripled in a year and PDD became

the largest Chinese Commerce Company by

market cap leting out longtime giant

Alibaba this is all a little odd PDD

Holdings is not a very transparent

company for a company of their value

they employ a remarkably little amount

of people around

13,000 they have little hard assets

little disclosure on their payouts and

quite opaque financial statements not to

mention the challenge of actually

distinguishing between teemu's and pindu

Duo's value in their little amount of

data that's

released so if you don't really know

where your money is going when it's

plopped into Teemu why are so many

Americans investing in

it it's because this website is not your

typical drop shipper or retailer of

course like the average one Teemu

handles all the marketing stuff on their

end suppliers are generally good at

making their products but less so at

getting them out into the world but

unlike a typical supply chain that might

go factory warehouse storefront purchase

Teemu Cuts these middle ones out and

sells them directly from the factory one

benefit of this is that with over

100,000 suppliers in the country with by

far the largest manufacturing base on

Earth Teemu can flood their website with

products ranging from cat toys to drill

bits to anything you can think of why

Teemu does this and what investors

really love about the service is is that

they provide a solution to the

manufacturer's puzzle the need to

constantly predict market demand a

manufacturer wants to make as many

little trinkets as people will buy no

more no less if they make too many

they'll need to store them for a hefty

cost and if they make too little they're

not making as much money as they could

be making which in the world of business

is the cardinal sin instead of

constantly trying to predict Demand with

with models and statistics wouldn't it

be so much easier if they could just

know how many products people will buy

Teemu think so too think about it from

the perspective of selling toys

Christmas season is coming up and the

toy manufacturer has eight designs you

can choose between a company like toys

are a company like Amazon has to predict

which ones are going to sell well and

roughly how many people are willing to

buy if they do this beforehand they can

minimize the amount of time the toys are

sitting on their shelves or in their

warehouses getting the toy to the buyer

as quickly as possible but teu flips

this on its head because they cut out

the middleman that toy manufacturer with

eight different products can put them

all up on the website and literally see

which ones sell better than others they

can cut out all those costs of storing

them handling them and the retailers is

marketing of them the catch is because

they're not buying them in advance it

takes a long time for a Teemu package to

arrive at your door because it takes

time to produce these toys and deliver

them from scratch Teemu takes as many as

15 business days to arrive at your door

compared to Amazon's 2 it takes longer

for the buyer but this way every product

is its own little market survey that's

why Teemu has so many weird products and

plastic dud ads the bizares is part of

their their strategy put everything up

on their website and then see which

little trinkets stick and which ones

they can scrap she in another Chinese

e-commerce site which specializes in

fast fashion uses a similar strategy I

did some shopping around here but this

website it wasn't for me I won't lie

though it has an appeal to it all these

clothes are just so cheap by working

with over 6,000 textile fact factories

across China and also employing a

similar stick everything on the app and

see what people buy model in 2021 Sheen

was able to add 20 times more new items

to their service than H&M and Zara

combined oh and it also outsold these

two as well Shen makes up only a fifth

of all e-commerce sales from China but

the versatility of Tex sters could be

why over half the total sales are

fashion related this model just works

best with easily variable items the

problem with this waiting game is that

the products are usually of such low

quality Teemu customers get frustrated

and shift back to the big players often

times products are not what's described

other times it's a cheap knockoff of an

established brand that would probably

lose you credibility if you wore them

outside or sometimes they're too unsafe

to use I personally wouldn't recommend

getting a toaster on there Goldman Sachs

has estimated that the retention of

Teemu the number of customers who will

come back to purchase another orange

package is only around

30% Amazon Prime has a retention rate

around

90% this Ultra cheap test and repeat

advertised everywhere model may work to

reel people into the service but it

doesn't seem to get them to stick around

Savvy business practices may not be the

only reason teu has performed so well

but before we talk about the other

theory of their growth I want to thank

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grammarly and now let's ask how did teu

grow so fast another more controversial

reason is is often blamed for this

explosion of cheap Chinese Goods into

the West import laws specifically the

Dom Minimus thresholds if a parcel

coming into the country is below this

certain value then you don't have to

declare it it doesn't have to be taxed

and it doesn't have to be regulated the

idea behind this is that it's not worth

a country's administrative capacity to

go through every tiny little package

when they could spend their time looking

for drugs and enforcing teror on the

larger easier to handle containers the

specific value this is varies by country

in Canada the threshold is $ 20 Canadian

dollar in the EU

€50 in the UK 135 quid in Japan it's

10,000 yen in China 50 Yuan many

countries have a threshold of zero and

in America the world's largest consumer

Market it's $800

that is very high globally and it was

actually increased from $200 in 2016 to

reduce costs to businesses and increase

trade the national foreign trade Council

a trade Association that includes

companies like Amazon eBay and FedEx was

certainly happy to increase the amount

of packages coming into the us but so

were their opponents if you look at

teemu's prices a package with them would

almost definitely fall under

$800 pretty much no matter what you buy

and because it's shipped directly from

the manufacturer not through a

wholesaler who tries to move things in

bulk Teemu orders almost always fall

under Dom Minimus in the US since the

online shopping boom of the pandemic and

the highest inflation in a generation

Dom Minimus Imports have boomed in

America to around 2 million a day

600,000 of these are estimated to be

from timu and shien alone 600,000 a day

assuming that's roughly 9,000 tons of

knicknacks that translates to around 90

Boeing 777s coming into the US full of

Teemu and Sheen orders daily these are

individual unlabeled packages coming in

making it very hard to enforce any sort

of rules regulations or keep data on

them contrary to the trend of slowing

Chinese exports growing only 0.6% in

2023 direct to Consumer e-commerce

exports grew by

69% 230 times the average and America

received over a third of these Ecommerce

exports besides a system where

counterfeits unsafe products and

chemicals used to make hard drugs can

slip into the US three Ripple effects of

this boom are one through the chemicals

needed to make these plastic Trinkets

and cheap clothes it's kept oil demand

higher than ever China has been

consolidating the factories to make

these so-called petrochemicals going

from a shortage to a huge surplus of

chemicals like polyester and

pelene China who already produces around

75% of the world's polyester has grown

output by enough in the past few years

to make an additional 100 billion

t-shirts annually in fact the

International Energy agency has

estimated that Global oil demand

excluding petrochemical demand would be

lower today than in

2019 moving chemical production from

Europe and Japan to China is keeping oil

fuming and its prices High the second

issue uh it perpetuates

slavery there are almost 2 million

Wagers in the shin inang region of China

who live in internment camps these are

prison camps for the Muslim population

to be re-educated into Chinese Society

prisoners suffer horrible abuses torture

and are put to work in the name of

curbing terrorism and religious

extremism many countries have officially

declared the system a genocide and the

United States has pass legislation to

block All Imports which use this weager

labor from entering the country

timu officially disagrees with these

allegations saying its low prices are

due to its streamlined supply chain but

an independent audit from Ultra

Information Solutions seems to have

found at least 10 products linked to

this slave labor if the Department of

Homeland Security cannot verify the

origin of the goods through the dominous

loophole then it would not stop products

that were made at the hands of slaves

from being bored entry into the us and

third it's not fair old Joe loves to

talk about Fair competition with China

but the Dom Minimus law creates an

inbalance of costs between direct to

Consumer Chinese suppliers and larger

firms who ship in the traditional way in

2022 Gap paid around $700 million in

tariffs H&M paid 200 million and across

the us over 111

billion was collected timu and Shen on

the other hand haven't paid a single

dime technically this is not illegal

Teemu is just playing by the US's own

rules but it puts American companies at

a huge disadvantage over cheap Chinese

sellers on their own home turf not fair

if you ask most and this is a reason why

there is a movement to get the Dom

Minimus threshold the minimize

back in 2023 a bill was introduced to

the US Senate to reduce the threshold

for non-market economies from

$800 all the way down to

$7 proponents argue these government

lead economies are the ones to unfairly

subsidize their exports bringing their

price down below the limit to sneak

products into the us but of course this

bill is mainly aimed at China and their

glut of small and medium-sized Manu

factories in the growing trade war

between the two superpowers in 2024 a

law was passed which required B dance to

either sell Tik Tok to an American owner

or have it banned from the country the

same bill allows the president to

determine any other foreign adversary

controlled application to have a similar

divest or ban ultimatum the American

government is in the mood to drisk their

economic ties with China that that means

doing more to protect American brands's

intellectual property or blocking the

import of drugs from China in June 2023

the select committee on the Chinese

Communist Party released a report on teu

saying it does next to nothing to keep

its Supply chains free from slave labor

with no internal audits on its suppliers

in April 2024 Senator Tom Cotton wrote a

letter to President Joe asking the

government to officially investigate

team

and ended off with a simple question if

you had the authority would you ban it

maybe Teemu does not need to be banned

it might die off on its own American

consumers a don't like to wait 3 weeks

for their deliveries to come and B are

getting fed up with teemu's quality eBay

probably the most similar American

equivalent to Teemu has claimed they

faced no additional pressure due to

their competitors rapid entry into their

space teu may just be blowing money

giving out free cash and deals to

Consumers who will only click on the

site once get their one package and

switch back to Amazon promptly after

investors may still love teu now but

look back and you'll see many once

Chinese Superstars have fizzled out over

time wish.com had a similar service to

Teemu in fact pretty much identical but

after being the butt of too many wish

version jokes the company lost over 99%

of its value from its peak in

2021 all these viral Teemu hall videos

are an echo of those same videos for

wish products consumers are curious

about the randomness of the purchases

but would never seriously substitute

their quality for that there will

probably come a time when teu succumbs

to either political or consumer pressure

but as for the Chinese e-commerce space

as a whole the incentives are too strong

to kill it outright If teu eventually

dies we will probably just see another

rise from its

ashes one of the only types of products

in the US exempt from the dominous

threshold are agricultural Goods if you

want to know why food seems to face far

more protection than any other industry

then why not check out this joint I made

on

thanks