The share of consignments from China and e-commerce volumes are growing rapidly. One of the most aggressive online shops is Temu, which uses psychology to influence consumers.
Experts recommend that consumers consciously consider the impact of their purchases and, where possible, prefer local producers.
Omniva Estonia’s head of sorting, Eduard Resetov, said that goods of Chinese origin made up about 30% of Omniva’s volumes. At the same time, e-commerce has grown so rapidly since the Covid pandemic that ordering online from outside the EU has also become much easier.
The arrival of China-based e-commerce retail giant Temu has been making so many waves that it has even necessitated altering the working practices of the Estonian Tax and Customs Board (MTA). Kaari Lainevool, service manager at the MTA’s customs arrangements department, noted how from May air deliveries started arriving directly from China to Estonia, leading to a sharp increase in shipment volumes. Whereas earlier the average volume of consignments was 50,000 per month, as of October it had risen to 420,000. This is more than an eight-fold rise.
Tanel Mehine, junior lecturer at the University of Tartu Faculty of Economics and specialist at the neuro-marketing lab (Neuroturunduslabor), said Temu’s success had been assured by its smart shopping-psychology techniques. Temu’s marketing strategy demonstrated all the main techniques, which can influence consumer behavior. One example of this is “gamification,” transforming the platform into a form of entertainment. Another is exploiting fear of missing out, or FOMO as it is known.
“Human fear of missing out is also exploited with advertising slogans like “Thousands of people have already bought this” or “Don’t miss out”. On top of all that come very low prices and a web environment built on social media principles. There is no Estonia-style modesty there,” Mehine outlined.
Yet cheap prices and discounts do not come without their consequences, experts say. Environmental scientist Tarmo Pilving noted the ecological footprint of retail giants like Temu was massive.
“We do not see these rainbow-colored rivers or industrial cities where there is basically no clean air at all and where the average age of residents is very low, compared with ours,” he said.
With every item bought from Temu, buyers amplify that environmental damage too. Temu’s ever-growing popularity can also drive local online shops and small businesses to extinction.
“In the end, this will have a direct impact on all our families if jobs disappear, and it will have a direct impact on our future,” was Pilving’s message.
According to Lainevool, consignments often reach Estonia via other EU member states, including the Netherlands, Belgium and Hungary, which means that the Estonian customs may not see the original Temu parcels at all. Only those consignments that are declared there are dealt with there in Estonia.
MTA current practice is to not separately distinguish goods from different platforms. All consignments arriving from “third countries” are those which get checked.
“Goods sent directly to consumers often lack a person responsible for product safety,” Lainevool pointed out, as an additional but important problem.
At the same time, Temu’s dominance is not unchallenged.
An EU-level customs reform is already at planning stage. Among other things, this will aim to abolish the customs duty exemption for consignments under EUR 150, and will introduce a handling fee for parcels sent directly to consumers. These measures would likely serve to equalize prices between the Chinese giant’s goods and those of EU companies.
The shopping-psychology techniques Temu utilizes are nothing new, according to Mehine. What distinguishes the company from its competitors, however, is that it blitzes the public with all of them at once. Temu is a true textbook example in terms of shopping psychology, he says. Similar platforms are being created elsewhere too, but since consumer protection regulations in China are more lenient, Temu has more latitude in which to act. Getting at least mildly addicted to Temu shopping is very possible, he notes, thanks to the system rewarding continuous additional purchases and impulse buys.
“Estonians buy their products from Temu, as the prices are low while the environmental footprint seems distant and abstract. It is easy to convince yourself that the impact of one purchase is a small one,” Mehine explained.
Since Estonia’s living environment is cleaner than in Western Europe, he says, environmental concerns for buyers there are less of an issue.
In any case, in his view, the small-parcel fee planned under the EU customs reform will not significantly hit people’s consumption, as the price differential with Estonian shops remains very large.
“E-commerce is growing rapidly and platforms like Temu are unlikely to go anywhere; on the contrary, shopping from them will only go up,” Mehine added.
Pilving’s comparison was with “Smaug,” the evil gold-hoarding dragon from “The Hobbit”. Working conditions in China’s mass-production factories are poor, he says, while pollution is often so great that masks must be worn when out and about on the streets. Pilving stressed that with every purchase, people were feeding “Smaug.” While climate change still seems like a remote theme to many Estonians for the time being, because the homeland remains pristine and clean, global changes will eventually also start to percolate through to Estonia too. Pilving warned that these changes could in fact happen quickly, as could be observed already in the tourism sector, where, due to global warming, southern Europeans had over the past couple of years been traveling more and more to the cooler Nordic region, to escape the unbearable summer heat at home.
“It is worth considering whether we really want to shore up Chinese mass production,” Pilving added.
Many materials of Asian origin cannot be recycled, he says, and have to be disposed of and end up in landfills. As a result, Estonia’s environment and soil suffer.
If shopping on Temu and other similar platforms were to slow up among Estonian people, Estonia’s economy and local producers could benefit too, according to Pilving. Unfortunately, the fact of the matter is that both the EU’s and Estonia’s dependence on China is much wider than just consumer goods, he noted. For instance, some rare earth metals needed in electronics production can be found only in China. (ERR)