Temu returns to Super Bowl ad slate as lawmaker ire swells

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Temu, the controversial Chinese e-commerce giant looking to take on Amazon, is returning to the big game on Sunday with a Super Bowl ad that lawmakers are calling on Paramount Global and CBS not to run.

The company, owned by PDD Holdings, skyrocketed to prominence last year after it ran an ad during the big game just a few months after it was founded.

Last year's advertisement touted Temu's low prices and invited consumers to shop “like a billionaire.” The multi-million dollar investment put Temu on the map and by the end of 2023, it was the No. 1 most-downloaded app in the U.S. with monthly active users topping 51 million this January, up nearly 300% year over year, according to data from Sensor Tower.

The specifics of this year's ad haven't been revealed, but already it's marred in controversy.

The company is looking to win over U.S. shoppers by being the next best “everything store” with lower prices than competitors, but lawmakers say it uses slave labor in its supply chain and spies on its customers.

On Wednesday, 11 Republican lawmakers sent a letter to the CEOs of CBS, which is airing the Super Bowl, and parent company Paramount urging them not to run the advertisement.

“Since last year's Super Bowl, Congress, through the House Select Committee on the Chinese Community Party, has uncovered alarming findings that indicate Temu has a pattern of noncompliance towards illicit products entering the United States market,” the missive read.

“Specifically, Temu 'does not have any system to ensure compliance with the Uyghur Forced Labor Prevention Act (UFLPA). This all but guarantees that shipments from Temu containing products made with forced labor are entering the United States on a regular basis, in violation of the UFLPA,'” it says, citing the House committee report.

Allowing Temu's commercial to air “would be a touchdown for the Chinese Communist Party against the home team,” the letter stated.

The letter was sent by Rep. Carol Miller, R-W.V., and signed by Reps. Byron Donalds, R-Fla., Jim Banks, R-Ind., Nicole Malliotakis, R-N.Y., Christopher Smith, R-N.J., Pete Stauber, R-Minn., Ronny Jackson, R-Tex., Michelle Steel, R-Calif., Beth Van Duyne, R-Tex., James Baird, R-Ind. and Mike Carey, R-Ohio.

Paramount and CBS declined to comment.

Labor allegations

Temu, along with Shein and other apparel retailers with a manufacturing presence in China, has been under congressional investigation from the House Select Committee on the Chinese Communist Party since May.

While cotton and other raw materials that can be traced to forced labor is a problem across the entire fashion industry, Shein regularly provides data on how often banned cotton is found in its clothes and publishes the results of the audits it conducts on its manufacturers. Other retailers also publish audit results.

Temu has yet to provide such data publicly.

“Company officials lazily point to boilerplate terms and conditions asking suppliers not to use forced labor, but Temu does not conduct audits and has no compliance system to prevent supporting atrocities,” committee member, Congressman Blaine Luetkemeyer, R-Mo., said in a Friday bulletin. “The company even admitted it 'does not expressly prohibit third-party sellers from selling products based on their origin in the Xinjiang Autonomous Region' and completely disregards the Uyghur Forced Labor Prevention Act.”

In a statement to CNBC, Luetkemeyer called Temu's ad “sickening.”

“Some people watch the Super Bowl for the commercials as much as the game. It's sickening to think a company built on slave labor with close ties to the Chinese Communist Party is going to make a direct appeal to millions of Americans all at once,” said Luetkemeyer. “I hope it only draws attention to the sinister background of both Temu and Pinduoduo if and when people see it. A flashy advertisement for the site's cheap products is lipstick on the ugliest pig around.”

In response, a Temu spokesperson told CNBC its standards and practices surrounding the use of forced labor are “no different” from major e-commerce players like “Amazon, eBay and Etsy” and the allegations “are completely ungrounded.”

“Before setting up their stores and listing products on Temu, every seller has to sign an agreement. This document stands as a pledge to maintain lawful and compliant business operations, and adhere strictly to the legal standards and regulations of their specific markets,” the spokesperson said.

“The use of forced, penal, or child labor is strictly prohibited. Employment by all our merchants and suppliers must be strictly voluntary. They shall respect the freedom of association and workers' rights to collectively bargain. Temu's merchants, suppliers, and other third parties must pay their employees and contractors on time and must comply with all applicable local wage and hours laws.”