Housewares suppliers have been voicing their unease about the impact online marketplaces such as Temu, Shein and Alibaba are having on the sector, as well as third party sellers on platforms like Amazon.
With low prices and free shipping, sites which deliver direct to consumers from China via UK sites, are presenting a range of issues, including counterfeit products, lack of import duty implications, safety compliance and more.
Some sites are reported to be offering copies of other brands’ products without restriction and therefore often without safety compliance checks.
Simon Maghnagi, commercial director at Forma House has found copies of a number of the DreamFarm innovations online. He explained: “Amazon has a lot of third party sellers who are selling knock-off goods. For instance, our Fluicer is now getting copied left, right and centre on Amazon. There’s three or four copies that come up when you type in Fluicer. Also when you type in Dreamfarm Fluicer into Google, it comes up with a Temu version.
“Many products on these sites in our industry don’t have food safety certificates. The consumers aren’t always aware of this, or assume the products have been tested as they are being sold by a UK site.
“These products are often using cheaper materials that haven’t got past the food safety tests. This will become a massive, massive problem if no one stubs it out.”
Ben Grunwerg, managing director of Grunwerg, added: “Chinese companies have little regard for intellectual property rights and are encouraged to copy Western designs and ideas. We have had a few issues, but usually contacting the offenders has resulted in the items being removed. The ability to copy Western designs and not to have to invest in R&D, is another cost saving for them.”
Bryony Dyer, managing director of Dexam, has seen a reduction in Amazon sales, but sees the copyright issue as a more longstanding situation. She said: “We have seen a noticeable reduction in our levels of business with Amazon. There are a multitude of reasons why this may be the case – general lower consumer spending due to cost-of-living crisis for example, but we have noticed a significant increase in the number of products that Amazon are sourcing themselves. They obviously have the capacity to manipulate their algorithm to push their own products and achieve the ‘buy box’.
“We have not really been affected by counterfeit products, but similar items to ours are available. This has always been the case and we back ourselves with a great sales team and marketing to encourage retailers and consumers to buy ours rather than those of our competitors – that’s how it works and has done for years.”
Housewares suppliers are also calling for fairer duties to be applied to imports to the UK. Last month, the EU began to explore scrapping its ‘de minimis’ package €150 threshold. In the UK, the threshold is £135, enabling the sites to ship small packages and avoid import duty
Ben commented: “There are multiple issues I have with Shein, Temu etc. Firstly, are the grossly unfair tax advantages these Chinese warehouses get over UK importers and retailers. Items from these companies are not subject to import duty, plastic packaging tax, or a host of other taxes that we as importers have to pay.
“These are Chinese companies based in China, albeit with a UK website. They don’t pay UK salaries, are not subject to the complete UK taxation system as retailers (bar VAT), including business rates.
“Large companies in the UK are also expected to have a Modern Slavery Statement. As these Chinese businesses are based abroad with less strict regulations, there are huge cost savings that can be passed onto the consumer, thereby giving them an unfair advantage.”
There are also issues being raised around customer data. Claire Budgen, commercial and marketing director, Lifetime Brands Europe, explained: “Temu’s marketing strategy to offer almost 100% discount to customers who encourage their network to download their app and become a Temu customer, has ensured it has become one of the fastest growing and prolific new marketplaces.
“That on top of exhaustive advertising focused on rock bottom prices has tempted a lot of customers to try it. And it is genuinely admirable marketing.
“But, there are reported concerns on the likes of Trustpilot, etc around lack of security around consumer data and also poor serviceability generally. Consumers need more transparency when it comes to what they are getting, to make informed decisions.
“With a myriad of marketplaces and online retailers vying for consumers’ attention, service propositions become very blurred for consumers and this traditionally is where our industry excels. Consumers need to be propelled to read reviews and ratings to make informed decisions.
“In addition, the media and consumer watchdogs need to ensure that consumers are fully aware of the short and longer term elements which may be in play and weigh that up when considering what to purchase and from whom. It may not be the cheapest but it could be the less costly route.”
Simon concluded: “I think these issues need to be bought to the forefront and perhaps we need to put pressure on Amazon a bit. Perhaps as an industry, we need to sign an open letter to bring this conversation to the fore.”
