DANIEL VAUGHAN: TEMU - The Latest Chinese Spyware App

 September 8, 2023

If you've ventured onto the internet, and if you're reading this, odds are you're on the internet right now, you've no doubt seen the posts from influencers, paid ads on news sites, and more for the shopping site called TEMU. It's the latest shopping "fad" that promises good products at direct cheap discounts. But as the old saying goes, if it looks too good to be true, it probably is.

In the case of TEMU, new information from market research company Grizzly Research shows that TEMU has software capabilities to take user data off their phones. That includes taking banking data, credit card information, and other sensitive data and sending it back to TEMU's parent company, PinDuoDuo, a Chinese company close to the Chinese Communist Party. And if you think TikTok is nasty Chinese spyware, TEMU makes TikTok look like an innocent angel in comparison.

TEMU: China's latest spyware for Americans

Interestingly, China banned its government employees from using Apple iPhones the day before the TEMU report went live. At a very minimum, China is pretending to mimic similar bans in the United States, where numerous reports show the Chinese use TikTok and other apps to spy on America.

In an interview on CNBC's Last Call, Grizzly Research's CEO Siegfried Eggert said that TEMU is "collecting user data including text messages and bank info." Eggert's report at Grizzly Research said that TEMU "has hidden functions that allow for extensive data exfiltration unbeknown to users, potentially giving bad actors full access to almost all data on customers' mobile devices."

Additionally, "great efforts were taken to intentionally hide the malicious intent and intrusiveness of the software." Grizzly Research also "strongly suspect that TEMU is already, or intends to, illegally sell stolen data from Western country customers to sustain a business model that is otherwise doomed for failure."

TEMU sells your information. You're the product.

TEMU's parent company, Pinduoduo, had an app removed from the Google Play store for similar malicious practices. And when you study the business model of both TEMU and Pinduoduo, they have no focus on building a consumer base to make purchases. It's about the person using the app and their info, not the purchases being made.

It's estimated that TEMU loses $30 per every order, potentially more. Grizzly Research found "rampant user manipulation, chain-letter-like affinity scams to drive signups, and overall, the most aggressive and questionable techniques to manipulate large numbers of people to install the app." TEMU's overall drive is to get people to download the app onto their phones. The shopping is all a ploy to get that one act.

And TEMU has been wildly successful in this strategy. The app has seen "over 100 million app downloads in the last 9 months, all in U.S. and Europe." However, it's worth noting: TEMU is not offered in China.

China wants Americans and Europeans to download this app. But they don't need anyone in China to download it.

The history of TEMU goes back to its parent company.

TEMU is only the latest of multiple rounds of Chinese apps with connections to the Chinese Communist Party. In Congress, the House set up the Select Committee on the Chinese Communist Party, led by Republican Representative Mike Gallagher. They've investigated numerous ways in which China has used apps like TikTok and others to spy on Americans and steal sensitive U.S. secrets.

TEMU is a different level, however. Pinduoduo has aggressively marketed the app to U.S. audiences, even going so far as to purchase a Super Bowl commercial. And they've paid off a litany of influencers across all social networking sites, who then encourage their followers to download the app. I follow a meteorologist on Facebook, and a couple of weeks ago, he randomly started pitching TEMU hard to his followers despite never hawking a single product in the past.

Time to delete TEMU.

One of the things everyone knows on the internet is that if you're using a website and can't figure out what product or service a company is offering to make money, then you're probably the thing being sold. Google, Facebook, and other similar sites have done this for years with targeted ads and more. China has taken that playbook and put it on steroids for companies that target a Western audience.

TEMU's marketing budget in this process for 2023 has been over $7 billion. For reference, Walmart spent $3.9 billion on advertising. China is aggressively trying to get as many Americans and Europeans as possible to sign up for TEMU and other similar apps, and the goal isn't to make money. It's to steal as much information as possible, with the option of returning it to mainland China.

If it seems too good to be true, it probably is. In the case of TEMU, this is a situation where the Chinese Communist Party is selling products at a loss to get everyone to download their programs on smartphones worldwide. That should make TEMU an easy decision to either delete or not download.

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