TEMU, China and the New Sustainability Debate

Transcript

• [00:00] Ana: Okay, one, two, three. Hi and welcome to Emerging Markets Today. My name is Ana Paula Picasso, and this episode will be about China’s e-commerce giant Temu, how it conquered the West, what it means for sustainability, and more.
• [00:56] Ana: If you’re watching or listening, this episode is available on video on Spotify and in the Emerging Markets Today Substack newsletter. All the links are in the description, so you can subscribe there.
• [01:10] Ana: I’m here with a returning guest to the podcast: John Pabon. He’s an internationally recognized sustainability expert, author, and consultant with over 20 years of experience working globally. He’s best known as Australia’s leading voice on greenwashing, and the author of Sustainability for the Rest of Us and The Great Greenwashing. He also lived in China for 10 years. Hi John, welcome back.
• [01:32] John: Hi. Great to see you again.
• [01:48] Ana: Great to see you too. Last time you were here, you were about to launch your second book, The Great Greenwashing. We talked about China, sustainability, and some misconceptions about China.
• [02:14] Ana: For people who haven’t heard the first episode, can you share your experience in China? You lived there for 10 years. What were you doing, and how was it?
• [02:24] John: I moved from the United States, where I was born and raised, to China in 2009. I thought it would be a few years, but it became 10. It was an amazing experience. That’s when I really got into the corporate side of sustainability, which is what I still do.
• [02:45] John: I learned a lot and was immersed in the culture. I wouldn’t call myself a China expert. If someone calls themselves a China expert, they’re probably lying. I left China in 2019, right before COVID, and now I live in Melbourne, Australia.
• [03:10] Ana: Sunny Australia.
• [03:12] Ana: I invited you back because the holidays are around the corner and everyone is buying presents. I saw a map of Europe showing the most downloaded apps, and around 80% of it was Temu. Norway, Spain, Portugal, France, the UK, even Iceland: Temu was the most downloaded app in 2024. I couldn’t find 2025, but I assume it hasn’t changed much.
• [04:07] Ana: How do you think Temu managed to break out from China into Europe and the US? What’s your view, especially from a sustainability and logistics angle?
• [04:36] John: It’s a fascinating question. It would be interesting to see a map from 2022 or 2023. I’d guess it was Amazon before Temu. And it’s not only Temu. We’ve seen other large Chinese e-commerce companies break into markets too. I’d put Shein in that category. Alibaba is a bit different because it’s more C2C and B2B.
• [05:23] John: These are what I call “domestic multinational companies.” They’ve succeeded for a few reasons. First, sheer scale. Shein works with something like 82,000 suppliers. That level of scale is hard to match.
• [05:50] John: Second, logistics. China has spent decades honing logistics. Temu, Shein, and others benefit from China’s experience as the “world’s factory.” That’s outdated now, but the capability is there.
• [06:16] John: Third, social media. Influencers helped propel these brands. Temu and Shein are big examples of influencer content driving name recognition.
• [06:40] Ana: And even in Brazil, I see Temu hauls on TikTok with affiliate links. The products are cheap, and with today’s cost-of-living pressure, people will choose the lower-cost option.
• [07:22] Ana: On sustainability: I always assumed China had weaker regulations. In Brazil, unions have traditionally been strong in manufacturing. I thought China was the opposite. Talk me through what you saw working there.
• [08:13] John: Sustainability isn’t only environmental. It also includes social issues: workers’ rights, labor rights, human rights. And governance: how you make sure you’re transparent and accountable.
• [08:48] John: I was in China at a critical point. In the 80s and 90s it was more “grow at any cost,” and regulation wasn’t strict. Around 2010 or 2011, the government realized that approach wasn’t sustainable long term. Pollution, corruption, and labor abuses were serious issues.
• [09:16] John: China can move fast when it decides to. It’s taken time, and there’s still work to do, but over the last decade they’ve tightened regulation significantly, including around labor and worker rights.
• [10:17] Ana: Foxconn is a good example.
• [10:20] John: Yes. Foxconn was a turning point. Workers were dying by suicide due to overwork and stress. The government understood it was bad for PR and bad for people. That pushed stricter regulation.
• [11:19] John: China is shifting from being “the world’s factory” toward more of a white-collar workforce, with some manufacturing moving to other parts of Asia. Broad strokes, but that’s the direction.
• [11:45] Ana: I heard a line recently: China was built by engineers, the US by lawyers. It tracks with how you’re describing growth and execution.
• [12:14] Ana: Should I feel bad buying something from Temu? Quick disclosure: I’ve bought some things from Temu, mainly cat beds and cat stuff. It’s very cheap.
• [12:54] John: I’m not going to guilt anyone. Nobody has to be perfect. I don’t shop at Temu, but I shop at Uniqlo. The point is balance.
• [13:23] John: If you shop at Temu or Shein because it’s what you can afford, that’s fine. If you want to offset it, do something positive elsewhere, but don’t aim for perfection.
• [14:00] John: If you can, think in terms of cost per use. Something cheap might fall apart quickly. Something a bit better made can last longer and be better for your budget.
• [14:22] Ana: That’s a good segue to greenwashing. Temu isn’t pretending it’s something it’s not. People know what they’re buying.
• [15:31] John: Greenwashing is when companies pretend to be sustainable or socially good when they’re not. No company is perfect, but greenwashing is about misleading claims.
• [15:52] John: Fossil fuel companies are obvious examples. Another is when companies push a tiny initiative as proof that the whole business is “green.”
• [16:21] Ana: I think H&M is a big example in Sweden. They claim to be green and promote recycling, but it’s a small part of the business.
• [17:10] John: Exactly. Temu may not be great for the planet, but they’re not positioning themselves as green. That’s not greenwashing.
• [17:37] John: Shein is different. They greenwash heavily. Italy fined Shein (around €1 million) for greenwashing. France also fined them heavily. There have also been serious controversies around what was sold on their platform and broader ethics issues.
• [18:50] John: With tens of thousands of suppliers, it’s hard to credibly claim you have full control over the supply chain.
• [19:25] John: Greenwashing isn’t only Chinese companies. Many industries do it. Fast fashion is especially bad. Highly regulated sectors do it less, but it still happens.
• [19:54] Ana: And that’s why you wrote The Great Greenwashing.
• [20:23] John: Exactly. It’s frustrating because consumers are not stupid. Companies shouldn’t treat people like they are.
• [20:56] John: I started the book thinking I’d focus on corporations. Then I realized governments do it too. Here in Australia, there’s state-sponsored greenwashing. The country looks clean and green, but the economy is heavily tied to fossil fuels and mining.
• [21:12] John: International organizations do it. NGOs can do it. Celebrities do it. And sometimes we greenwash ourselves without realizing it.
• [21:42] John: I actually pulled out one part and turned it into another book coming out next year: Eat the Rich, about greenwashing among the ultra-wealthy.
• [22:10] Ana: You’ll have to come back when it’s out.
• [22:38] Ana: Thanks, John. All links are in the description for The Great Greenwashing and Sustainability for the Rest of Us. And don’t forget to subscribe to the Substack newsletter. See you next time. Bye.