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February 27, 2024 44 mins

Mia and Gare discuss the harrowing and deadly labor exploitation that brought Temu to America.

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Speaker 1 (00:01):
Alson Media.

Speaker 2 (00:06):
Welcome Jacob app and here a podcast featuring a sound
activated strobe light that you can't see, because.

Speaker 3 (00:11):
This is not a visual podcast unless you have like
setastesia and you could like start hearing seeing the strobe
through our voices, in which case is good for you.

Speaker 4 (00:24):
Wish that was me?

Speaker 2 (00:26):
Yeah, So that that's Garrison. I'm the We're back again.
We're back again for a dissented to hell. Yeah. So,
last episode we talked about Colin Wang and the rise
of PDD, which is China's second largest shopping app and
the Chinese version of the app, Temu. So we're now
in the post Colin Wang era, an era I think

(00:47):
actually might be worse than the original era, which is
kind of stunning. But you know, here we are, Here
we are, and this era actually starts really well for PDD.
This is like twenty twenty one. China's lockdowns are actually
incredible for PDD because, as we talked about last episode,
pdd's strategy is group shopping, right. It's about getting a

(01:09):
bunch of people to buy things together to make it cheaper,
this thus pulling in more in our customers. Now, China
had real lockdowns and in a real lockdown. This is
increasingly how people got food. You know, the strictness of
the lockdowns very across, like depending on what province you're in, right,
But so like my family was an inner Mongolia and
an inner Mongolia in like the first lockdowns, you could

(01:31):
send you could only send one member of your family
outside per week to like, you know, to go get groceries.
Otherwise everyone else fed all times has to stay indoors.
And this meant that people started pulling together to like
all buy groceries and then sending one person out to
like go pick up the delivery. And this this ingrained

(01:51):
PDDs like fundamental strategy of like buying into the into
the consciousness of the Chinese public because they've just been
doing it for like a year, right, and as twenty
twenty for a word on PDD like skyrockets, this this
is this the period from like twenty twenty to like
twenty twenty four has been the period where pdd's grown
them most. I mean it was already pretty big before then,

(02:13):
but now you know, it's it's now like the main
competitor of Alibaba. It was like the previously unassailable like
online shopping giant the company grew so much that it
forced the other like shopping companies to get into the
fruit market because it was like clobbering them there so badly.
So yeah, it was wild. But then a bunch of

(02:35):
absolutely terrible stories broke about PDD in both the Chinese
and American press. So we're gonna start with the stuff
that's I guess less bad, and then it's gonna get worse.
So question number one is the PDD at malware. All right,

(02:56):
we're just really jumping right in here. Oh, this is
this is the mild it, this is the Are we
allout to say this legally? Yeah? It's well, here's the thing.
So Google play removed the app from its playstore. Oh okay,
so all right, so so okay, we we need to
be very specific about we're talking it's too bad for Google,
that it's probably too bad for you. Yeah, so very specifically,

(03:16):
this is we're the thing we're talking about right now
is not Temu. We're talking specifically about the Chinese version
of the app PDD. And this was released on the
Google Play Store in like the mid twenty the mid
early like like I think it's like twenty twenty one
or something and okay, so this again and to be
clear again this is not Temu. This is specifically the

(03:38):
Android version of PDD. And this is interesting too because
so most people in China like don't use Android for
you or sorry, they don't. They don't. They don't use
Google Play, right, like they don't that that's not like
the App store where they get their apps from. So
when PDD released, like their app on the app store,

(03:58):
this is this is them specifically going to the Western market.

Speaker 3 (04:02):
And did they have infrastructure set up in the States
to support this type of like drop shipping or like
how do this?

Speaker 2 (04:08):
Yeah, we'll get into it.

Speaker 3 (04:11):
It was like kind of later a little bit like
gig economy stuff in China. But how how are they
going to move that FedEx? Okay, yeah, right, well we'll
get into that more later. We're talking about Timbo.

Speaker 2 (04:24):
This first one didn't like it didn't have that many
users because it was just like the Chinese app. But
like here, okay, so okay, there's something we also we
need to get out of the way first, which is
that there's like a massive panic in the US about
Chinese apps being like Chinese government trojan horses, like especially TikTok.
So unfortunately, before we start this, we have to sort

(04:45):
out kind of well, like you have to make a
judgment about what level of app surveillance is, like the
level of apps surveillance you get in the US, because
all of your apps are spying on you, and then
what is like above and beyond the like quote unquote
normal level spying and like TikTok is TikTok is unbelievably invasive, right,
Like it is true, it's a privacy nightmare, but like

(05:06):
so are most apps, Like TikTok's worse than normal, but
it's not.

Speaker 3 (05:09):
That TikTok is by the Chinese communists.

Speaker 2 (05:12):
So this is something we're gonna get into. And this
is this is true with pdu too. The US actually
gets like the stripped down, cucked not as bad version
of Chinese apps, like TikTok does not have a bunch
of the like integration stuff that that Doyen, the Chinese
like version of it has. We're like Douyen has this
thing where like I guess Google's kind of doing it now,
but like you can directly, like like an influencer can

(05:35):
hold up a product and you could tap the product
and go buy it. Google is trying to do that now. Yeahah,
but China had that, like like Douyan's had that for
like ages. Right, It's like so like the versions of
the apps that we get here are actually less bad
than the Chinese ones, which makes the whole panic so
funny to me. It's like no, no, no, like they're
sending you like a better version of the app, Like, well.

Speaker 3 (05:57):
That's because what Uncle Sam calls in our version, we
have to take out all of the maoist influences, I
don't know whatever whatever.

Speaker 2 (06:08):
All right, all right, so you know, look like so
we have to we have to sort out of the
difference between stuff that's just like the weird moral panic
and what what's actually malware. So CNN did an investigation
of this app. So originally there was a Chinese company
that a Chinese security company was looked at this app
and was like they're using a bunch of Android exploits,

(06:29):
like they're like they're using like they're there, they're effectively
hacking your phone, right, They're they're they're they're deploying a
bunch of exploits of things that are like broken in
in like in Android and allowing you like this, like
lesson do stuff and I was supposed to be able
to do And so CNN brought in a bunch of
different security like analysts and like they brought in security

(06:49):
companies like look at it, and here's what they found.

Speaker 3 (06:51):
Well, I don't know if you'd trust this. C it
ed they're literally called the Communist News Network.

Speaker 4 (06:58):
Quote.

Speaker 2 (06:59):
The app was able to continue running in the background
and prevent itself from being uninstalled, which allowed it to
boost its monthly active rate. Hype on it. I don't
know how pronounce this guy's name. I'm so sorry this guy.
This guy's this guy's name has an umlot over the oh.
I'm an expert at pronouncing foreign names. Give it to me.
It's h y pp umlot o n e n good luck.

(07:22):
You know what.

Speaker 3 (07:22):
I'm just gonna take a I'm gonna sabbatico.

Speaker 2 (07:25):
He put in I'm so sorry to this guy, who
I think is fine. This guy's security analyst said it
also had the ability to spy on competitors by tracking
activity on other shopping apps and getting information from them.
He added toshin, which is like another guy found PDD
two have exploited about fifty Android system vulnerabilities. Most of
these exploits were tailor made for customized parts known as

(07:49):
original Equipment manufacturer code, which tends to be audited less
than ASoP, which is like another kind of code and
therefore prone to more more vulnerabilities. He said PDD had
also exploited a number of AOSP vulnerabilities, including one that
was flagged by Totioniin to Google in February twenty twenty two.

(08:09):
Google fixed this bug in March. He said, I've never
seen anything like it. It's like super expansive. Cergy Totionin,
android security expert, he's the guy I said that. Sorry,
I've never seen and Android Tracin said, I've never seen
anything like this. It's like super expansive. According to Tosin,
the exploits allowed PDD to access users location contacts, calendars, notification,

(08:32):
and photo albums with ot their consents. They were also
able to change system settings and access users social media
accounts and chats. He said, now that is pretty bad.
Will I will mention that like a lot of your
normal apps can also do shit like that. Yeah, like
that's stuff that you can get out of, like Google,
but some it's not good. The other thing that they

(08:53):
were doing is they're doing these things called privileged escalation
attacks where they're trying to get like a higher level
of privileged on the system so they can run code
and not supposed to be able to. So you know
how like sometimes when you're running something at a computer,
you have to run it as admin so the thing
actually works. Yeah, like Discord, Yeah, I actually Discord. I've

(09:13):
been trying to stream Alan Wake two to my friends
and oh my god, it has been such a nightmare.
I'm gonna personally write the CEO of Discord a letter.
And yeah, but like so like so there they're they're
like the way the system security works is there's certain
levels of users that are allowed to do certain things
and certain people who aren't, and this is supposed to

(09:34):
stop people from running malicious code. And so they're doing
these privileged escalation attacks where they're trying to be able
to like do stuff that only admins can do. And
so I showed this to so I was trying to
get a gauge on how much of this is real
and how much of this is insane, And so I
showed I showed it to my friend who's a software engineer,
and he was like, what the fuck? So this is

(09:55):
this is very tytyfically the privileged escalation attacks on the
and the attack on the like the original Equipment manufacturer
code like the OEM stuff. That's just not normal, Like
that is that is actual malware. That is like not
that is not normal app bullshit that like this thing
is trying to hack your phone. So in twenty twenty three,
the like Google pulled the app from the store because
everyone was like, what the fuck. Wait, this is just
literally malware. I'm gonna so so what were they trying

(10:18):
to do? Here's CNN again. It was in twenty twenty,
according to a current PDD employee, that the company set
up a team of about one hundred engineers and product
managers to dig for vulnerabilities and Android phones, develop ways
to exploit them, and turn that into profit. According to
the source, who requested anonymity for feear of for fear
of reprisals, the company only targeted users in rural areas

(10:42):
and smaller towns initially, while of winning users in megacities
such as Beijing and Shanghai. The goal was to reduce
the risk of being exposed, they said, by collecting expansive
data on user activities, the company was able to create
a comprehensive portrait of the users habits, interests, and preferences.
According to the source, this also allowed it to improve
its machine learning model to offer more personalized push notifications

(11:04):
and ads attracting users to open the app and place orders.
They said, so this all makes perfect sense with like,
how we know that PDD operates right, Like, you know,
they're trying to build detailed profiles or rural customers they
can serve the more efficient ads, and they're doing it
by apparently just straight up running an in house hacking team.
I got pretty large one. Oh so they supposedly that

(11:29):
team got like acted and they don't do it anymore.
But who knows. So, Okay, this is not even close
to the most batshit thing that PDD gets up to. Okay,
we're going to escalate up the how weird this stuff is.
So one of the things that that PDD has a
six tonech reporting is that they have these really strict

(11:49):
non compete clauses that prevent people from like, so if
you take a job here and you get fired or
eat like you leave, you can't take another job at
a tech company for like years this is like fucking
like any tech company, like fucking like I don't know,
they're they're really expensive, like fucking like setting up your
grandma's website like might get you trouble. It's like it's
it's a real disaster. We have these in the US too,

(12:11):
and they absolutely suck. So I think there was a
ruling about them FTC ruling to ban them recently. Maybe
Oh no, they're proposed, it hasn't gone through yet, trying
to get rid of them. But yeah, they're they're in
the US two. But these ones are really strict and
apparently they're like PDD is really aggresive about it to
the point where like people people will take other jobs

(12:33):
under fake identities and like pdd's HR will like track
them down. Oh wow, yeah, Like they're they're like headhunting
these people, well like like inverse head hunt, Like they're
they're like they're they're literally just hunting down people trying
who are trying to get like jobs, right, And this
apparently led people to adopt secret identities to like hide, right,
And so this GIDS is something I I did not

(12:54):
believe the first time I read it, which is that
apparently and I regentally read this in n K, who
is usually reliable. But I read this and I was like,
no way.

Speaker 4 (13:03):
Uh.

Speaker 2 (13:03):
The thing that they said was that employees at work,
like who work for PDD apparently use pseudonyms and like
never tell each like almost never tell each other they're
actual names. That's I mean, that makes sense. Uh. And
apparently also they're banned from like like the information level
of information control is so strict that like you can't
you're not allowed to know what like the structure of

(13:26):
another work group is. And like I read this, I
was like, I don't believe this right, And then I
started running it into like other outlets like Financial Times,
was like yeah, no, no, apparently they they talked to
they talk to people who work for the company. They're like, yeah,
everyone uses pseudonyms. I didn't fucking know anyone's real name
or like there was like one person who's real name
that I know wild. I don't know why they do.
I've never seen I've literally never seen this before with

(13:46):
any company. It's it's fucking nuts. I got nothing. Yeah,
I do you know who? No one had this company
knows my real name. So that's true. I do actually
operate by a pseudonym. Yeah, that's pretty funny.

Speaker 3 (14:00):
That is not like a sizable portion of the cool
Zone media team.

Speaker 2 (14:03):
But all of us are fake names. Robert Evans, that's
not Robert Evans, real Robert Evans was the producer of
that movie. Yeah yeah, yeah, yeah yeah.

Speaker 3 (14:16):
Anyway, do you know who also has trustworthy names that
you can trust these products?

Speaker 4 (14:25):
Woo so true?

Speaker 3 (14:38):
Jeff, Wow, that was a really funny joke.

Speaker 2 (14:41):
Bill. Oh, we're back. Sorry.

Speaker 3 (14:43):
I was just talking to the two fake fake name
people who are listening on our call right now.

Speaker 2 (14:48):
Me I continue. So this is where we get to
the truly bleak stuff. So all right, In twenty twenty one,
one of pdd's employees in shing John just worked worked
a shift, came home, and the dis straight up fucking
died in her bed from overwork. This this was a

(15:10):
you know, this very quickly turns into a giant media
thing because this woman like she's in she's in really
good health and she just fucking is worked so hard
that she lays down in her bed dies. Then a
worker who posted a video of an ambulance outside of
pdd's headquarters with the caption another brave warrior of PDD
has fallen, which great caption, terrible situation, great caption. He

(15:34):
gets fired for it, and then very quickly like after that,
so they have like a the company has like a
Q and a thing like if effectively, what happens is
someone responds to like one of their social media accounts
with and asks them what do you think of the
PDD worker who died after working overtime? Should PDD bear responsibility?

(15:58):
Their corporate responded and I quote, look at those in
the underclass who isn't exchanging life for money. I never
thought that this is a problem of capital, but as
a problem of this society. We live in an era
where we spend our whole lives working hard. You can
choose a comfortable life if you accept the consequences of

(16:18):
comfortable living. People control how much effort they make. Everyone does.

Speaker 3 (16:24):
I can't believe there's people who genuinely like advocate that
China is a like communist country. So strange, that's insane.
They're only talking like God, this is.

Speaker 2 (16:37):
This is like this, and this is like and this
is like this is one of the things that like
I just like, I don't know, like I just can't
fucking get over this. Ship because like, I have a
bunch of fucking family in China, and you know, do
they fucking quote Karl Marx, No, they quote Steve Jobs
because they're all these like fucking insane entrepreneur bullshit, like

(16:58):
like fucking literally like Ryan Set like straps, Yeah, it's insane.
It's like, no, it's just your fault that you work
too hard. This is actually labor's fault and not capital.
Like this, this fucking blew up in the Chinese media
and people got like people got really fucking pissed, and
p d D at first was like, no, this is

(17:18):
a fake post. We never did it. And the people
were like, no, no, it's not this is we found
the post. Right, they take they take it down, people
like had saved screenshots and eventually the company was forced
to admit that it was actually their account, but then
they said that it was a social media contractor who
put it on the corporate account. Quote by mistake.

Speaker 3 (17:35):
Oh sure, sure, yeah, that's like that. That's like me
when I searched my twin peaks not safe for work,
uh fan art on the coolest media account. It was
a mistake, guys, didn't mean didn't didn't mean to post
it there. I don't know how that happened, it got
it got past the VODs. I don't know how.

Speaker 2 (17:55):
Yeah, and you know, people, people understandably are not happy
like and that. And eleven days later, a PDD employee
jumps off a fucking building again, also because they've been
worked so hard. And this is where we need to
talk about pdd's labor conditions, because they are fucking appalling.

(18:18):
Here's sixth Tone. A former PDD employee who left the
company a year ago told sixth Tone under conditions of anonymity,
that excessive work hours are common practice. Around eight months
after he joined PDD in early twenty nineteen. He said
employees were told they need to work at least three
hundred hours per month, amounting to nearly twelve hours per day,

(18:39):
six days a week. We're going to get more into that.
That's a schedule called nine niney six, where you work
from nine am to nine pm, six days a week.
This is incredibly common and try This is actually a
good schedule. In a lot of Chinese work environments, it
can get way worse than that. Here's another quote from
that six Tone article. The company cares a lot about

(19:01):
our work hours. It has become company culture. Even if
staff is finished working, if they'll just stay in the office.
I was one of the lucky ones. I only had
to work from eleven am to ten pm, and my
manager was nice to me. This person added that employees
arriving after eleven am would have their daily wages docked
by three hours. It's fucking insane. It's it's nightmarish. That

(19:27):
same worker talked about how she would like and this
is this is the thing that's like you see you
see this a lot of different accounts, is that people
would just literally break down crying at their desks because
they had so they were so overworked. Are these like
office jobs? These are workers, These are tech workers. These
are fucking tech workers. Like right, these are the fucking

(19:48):
bougie tech jobs.

Speaker 3 (19:49):
They're not like because they're getting over like a factory
or like an Ama warehouse tech workers.

Speaker 2 (19:55):
And this this is the thing about this, right, is
that like we we only we don't like there hasn't
been okay. So the Chinese media, this actually like becomes
a huge thing in the Chinese media is that these
people are dying. There was another There's also around the
same time, a delivery driver lit himself on fire like
as a protest for like the amount of shit that
he had to deal with. And this was a big,
like a huge thing in the Chinese media, but almost

(20:16):
all of the reporting and the coverage and stuff like
that was about the tech workers. But like, fucking so
many people work schedules that are worse than nine ninety six, right,
Like that is a that is a that is a
tech workers schedule, right, there are a lot of places
where people were fucking way worse shit. The sort of
countervailing force to it is people who, like you know,

(20:36):
we talked about this kind of in the Lying Flat episodes.
It's people working for like one day and then eating
just like plain rice with some like whatever, fucking the
cheapest thing they can finally they can fucking get out
of it, and not working for two more days and
working another day. But like it's it's so bad, like
the little labor conditions are just appalling, and you know,

(21:00):
like a bunch of stories sort of started coming out
about how bad PDDs like conditions are. There was one
on we chat that broke that I saw via six
tone about the toilet situation in pdd's largest office building.
So this building has one thousand people per floor. It
has eight total bathrooms per floor one thousand people. They

(21:26):
don't even have one bathroom for every hundred people.

Speaker 3 (21:31):
How does this even function? I mean, like I suppose
it just doesn't. People are like pea like people.

Speaker 2 (21:36):
People fucking like you don't eat in the morning, or
you try to hold out to lunch when you can
run to a different building and try to use the
bathrooms there, but like you know, you're trying to hold
it all day, or you just yeah, where you fucking
do that? You go, you use your lunch time instead
of eating to fucking go somewhere else. You starve yourself.

(21:59):
There are like there's a bunch of reports of guys
just like shitting in urinals because there just literally wasn't
time for them to fucking actually like use a stall.
So they're just like they're they're just like they're they're
pooping in urinals. Maybe the worst picture I've ever seen
in my entire life is this is going to be
the episode our PDD started installing timers over the toilets

(22:22):
to show how long how long people had been there,
So there's just like a like a a fucking clock
over you that starts when you when you fucking close
the door to try to get people to go to
the bathroom faster. It is just appalling the conditions. And again,
these are the conditions of like the office workers. It's
apocalyptically bad. So I realized when I was researching this

(22:46):
story that I actually ran into PDD earlier, because I
I so like, way before I did this story, I
hadn't looked into TAMU at all, and I realized that
I had. I had ran into PDD earlier when I
was tracking the story about UH tech workers banding together
to like basically like on GitHub, these these office workers,
like tech workers, like made a giant spreadsheet where everyone

(23:06):
would document their hours and like their pay scales and stuff.
And it was like, you know, it was this sort
of like you know, it was it was this thing
to like demand better labor conditions. Actually I'm pretty I'm
pretty sure they were actually demanding like the workplace democracy too.
It was pretty wild. But the thing that you get
out of that is that PDD has the worst the
worst hours of any tech company. They are. PDD is

(23:29):
so bad. The other Chinese tech companies got worse in
order to compete with them.

Speaker 4 (23:35):
Yeah.

Speaker 3 (23:36):
That is the the whole hard thing about setting the
bar so low is that it allows other people to
lower their own bars. Yeah yeah, and it makes just
every everybody worse.

Speaker 2 (23:48):
Yeah, And again, like I can't emphasize enough the extent
to which these are the office workers, right, Like, these
are the people who are making the best money out
of this, who are treated better than like the funking
factory workers and the fucking like people in the rural
areas like fucking doing farming.

Speaker 1 (24:04):
Right.

Speaker 2 (24:06):
But again we don't we don't know a huge amount
about what those workers' lives are like because they're not
urban tech workers. And urban tech workers can get their
stories into the press, but like you know, migrant migrant
factory workers, rural workers, there's you know, there's just not
the kind of attention that you can get out of
a big story about like an urban office building. And

(24:28):
you know, I mean, these labor conditions are so bad
that people are just straight up fucking dying. And the
Chinese government eventually gets involved, like they're there, they're their
version of the Streame Court eventually rules that like working
people twelve hours a day, six days a week, is illegal,
but it doesn't really matter, like a lot of those
people still have those same schedules. Yeah, and you know

(24:51):
and like this this is not a this is not
a problem that can be solved just by like court rulings. Right,
So yeah, it's it's really fucking bad. We're gonna we're
gonna take an ad break. I don't I don't have
a good transition out of that ship. And we're back.

(25:18):
So all of this brings us to Temu And it's
slogan shop like a billionaire.

Speaker 3 (25:23):
So, oh god, this the slogan. It's so it's like
it evokes like a like a nauseous reaction in me.
It's so it epitomizes everything that is wrong about our
current way of living and the way we idealize the
rich and put them on this like pedestal for how

(25:46):
you should live your life, but also knowing that you
will never actually be there. Yeah, this is this is
this is as close as you're going to get.

Speaker 2 (25:54):
And it's it's it's also a thing where like it's
it's a completely unreal lit like it's if that's this
is a billionaire shop like billionaires. So it's not like
you think those people fucking shop like no, No, they don't.

Speaker 3 (26:04):
They have they have over over like saving three dollars
on on like a mango.

Speaker 2 (26:09):
You're like, no, yeah, like what the fuck are you
talking about? Yeah? So yeah, like I I hate it.
I hate it so fucking much.

Speaker 4 (26:18):
You know.

Speaker 2 (26:19):
So, as we said, like this is the time. It
is the American version of PDD. If you're in the US,
you've probably seen tim owas. Apparently they're not that many
of them in like other countries, Like I have British
friends who are just like, what the fuck are you
talking about me? And I've never heard of TIMMU.

Speaker 3 (26:31):
Before the super Bowl, for whatever it's worth.

Speaker 2 (26:34):
The big place where they were advertising was YouTube. But
if you're watching YouTube without an app blocker, don't I can.
I don't know if I can legally recommend you probably
probably that phone I can get it. It's an app.
I don't do it. I don't know if it may
be legal, it may not be. I can't say I
will never advocate breaking the law.

Speaker 3 (26:55):
No, definitely buy utube. Yeah yeah, yeah, that's definitely the
way to go. Absolutely, But you know, like they okay,
like most famously yeah, yea, as you're saying, like, so
they spent twenty seven million dollars buying three Super Bowl ads.
It's all the same ad and it sucked. But you know, okay,
this is only a fraction.

Speaker 2 (27:15):
Of their fucking budget.

Speaker 3 (27:16):
Right.

Speaker 2 (27:17):
Here's from the Wall Street Journal quote. Ten MoU's marketing
budget reached one point seven billion dollars in twenty twenty three,
and that figure will grow to nearly three billion in
twenty twenty four. JP Morgan's analyst estimate. Last year, ten
MoU's marketing spending contributed to an average loss of seven
dollars per quarter, according to Goldman Sax estimates. They are

(27:37):
buying so many ads they are literally driving other companies
out of the ad market. LIKETCCO has been talking about
how they can't afford to run ads because ads are
getting too expensive, because they're buying so many fucking ads.
Here's Reuter's quote. US companies dependent on commercial spending or
spending on commercials, not.

Speaker 3 (27:58):
Yeah, commercial spending. They are buying commercials yeah yeah.

Speaker 2 (28:02):
Like Facebook, they say Meta, I refuse to fucking call
that company Beta, like fuck that shit. Their Facebook are
being saved by Chinese retailers like Temu and Sheian. They
represent ten per those two companies, just Temu and she
In represent ten percent of Meta's revenue last year. The
Facebook owners said, so Temu is hemorrhaging money right now

(28:24):
in order to do this right, JP Morgan thinks they're
losing three billion a year. But they also project and
to be fair, these projections, these projections are wrong so
many of the time, of so much of the time,
but they're projecting the ten will be making three point
five billion a year in twenty twenty seven. And all
of this raises the question why, and to answer that,

(28:44):
we need to get into Chinese development economics. So the
Chinese economy has a problem, and this is a problem
that the CCP is known about for a long time.
It's the problem of turning a sort of like a
low on the value chain like manufacturing economy, to a
consumption driven economy. Now, the problem with transitioning into a
consumption driven economy is that people don't have enough money

(29:07):
to boost consumer demand. The Marxist way of saying this
is that under capitalism, both output and consumption are double
determined by your wage. Right, your wage determines both firm
output and also how much you can consume. Right in
non Marxist terms. Oh no, no one has enough money
to buy things. They did you consumer economy by brother

(29:28):
in Christ. You set the wages. Okay, where are the fuck? Yes,
where the fuck are these people supposed to be getting
money from to buy your shit if you won't give
them more money? Like wait, wait, wait, So you know
you can't do this by just making them like work
more hours. You know, you can work people for like
twelve fifteen, like twenty hours a day, but there's only

(29:51):
twenty four hours a day. Like, there's an actual definite
there's an actual definite limit to the amount of exploitation
you can do via increasing labor hours. This is this
has always been capitalism's problem, right, Like the sort of
rapacity of capitalism has hit the secular limit of time itself.
So the solution to this is to expand into new
markets where consumers have more money, which is to say

(30:13):
the US. So PDD initially targeted like poor rural Chinese workers, right,
and this is kind of the same group that Temu
was targeting in the now. In the US, their initial
base is people who like buy from dollar stores, but
they've been spreading rapidly. Temu has outpaced she in to
become the second largest shopping app in the US. But
the important thing really, yeah, yeah there's second behind an Amazon. Yeah,

(30:37):
they're they're destroying she in Like, wow, yeah, I did
not know they were that popular. Yeah, I mean like
estimates are like, well, I've seen simens to say they
have one hundred million years. I don't buy that. I've
seen the estimates that I think I'm more reliable are
like fifty four million years in the US, although.

Speaker 3 (30:52):
Well, the thing is, we don't we don't have post
super Bowl numbers between fifty and well.

Speaker 2 (30:56):
I think I think it's like fifty. I wouldn't I
wouldn't expt on hundred million ones. I think that's bullshit.
We don't have good post super Bowl data yet. Kind
of the issue. But yeah, they're they're they're clobbering people.
But the important thing about specifically the American market for
TEMU is that, like the kind the equivalent person who

(31:18):
shops at a dollar store in the US still has
unfathomably more money than that same person in China because
partially this is because the strength of the American dollar.
Partially this is because American wages are just like unfathomably
higher than Chinese wages, and that's that's that's true, even
if you're like even when you account for like the

(31:38):
relative strength and dollars to the yawn. So you know,
the other kind of important thing about temis strategy is
that they've been using this kind of like loophole that
will set up a US customs law to allow people
to like bring presents home from countries. So like, if
you go to another country and you bring a present home,
it's worth less than two hundred dollars, you go through
like an expedited customs thing, you know, have to pay

(32:00):
tariffs on it. Yeah, so I Temu and like a
whole bunch of these companies just ship every single one
of their packages in quantities where it's like seven hundred
and ninety nine dollars, not eight hundred dollars ye legal, yeah,
yeah yeah. And it's really funny. It's set off this

(32:20):
like it's massive intra capitalist war because like a bunch
of like like American right wingers, like American manufacturers, like
the Republican Party are like, we need to close this gap,
But then all of the fucking shipping companies are like, no,
this is a vital part of the American consumer economy,
and there's this like giant war going on like both
in Congress and like the like in the press over
whether they should when they should close as loophole now,

(32:46):
you know. On the other hand, like there are real
challenges to Timu being the first like company to break
into the they're like Chinese companies like really truly break
into the American market, like she and has done well,
but they haven't like they have they have, They're not
like a rival front to Amazon, right, Like they're not
big enough to like knock off one of the sort
of like American tech giants. And Temu's problem is that. Okay,

(33:10):
so if you compare Temu to to PDD, right, the
Chinese version, PDD is supposed to be about spreading through
word of mouth, right, It's it spreads by like someone
in your you know you as as of someone buying
something from PDD taps your entire friend group and your
family to get them to buy something for cheaper. Right.
But the problem is that.

Speaker 3 (33:29):
Like fucking night, I forgot how marish this whole structure is.

Speaker 2 (33:33):
It's so bad. But the thing is, like Americans don't
really do that, like there have been attempts to do
like group on things, they never worked and Americans also
don't group shop right because we're I don't know more Weird's.

Speaker 3 (33:46):
Just a fucking I mean, this is not a full
full of a lot, more like individualistic impulse science that
is that is kind of a large part of what
the American shopping classes me is is built off of.

Speaker 2 (33:59):
And and this isn't This is an issue for Temu
because like they don't have the word of mouth thing
that drove them in China, so they're relying on just
top down like like massive ad buys and stuff, and
there's kind of a limit, and it's something that Temu understands, right,
Like this is you know, the whole there's a whole
thing in the Chinese tech industry about the power of

(34:21):
being able to leverage people's like private networks, right, Temo understands,
But they don't have a way to break into the
American market because it just doesn't work like the Chinese market.
So instead they're like buying three Super Bowl ads right now.
There's another issue, which is that the goods that they
sell suck ass and they break instantly. You know, that's

(34:41):
an issue, But I don't know it's the US. Lots
of things suck and break instantly, but like it is
only that's been driving sort of negative sentiment from people
who've used it, is they're like, they buy something and
it's just like sucks, and they're, you know, they're unhappy
about it. The thing I think is maybe the biggest
problem is that their delivery times are really long by
Americans den because they're shipping overseas, Temu had to build

(35:03):
an actual logistics infrastructure where PDD like didn't, right because
PDD is just using like Chinese versions of FedEx or whatever, right,
and Temu is kind of doing that but in you know,
in order to make it convenient for Chinese sellers. The
way that they the way that they've sort of like
set this up is they have a warehouse in Guandong
and every seller like ships it to this warehouse and

(35:26):
then Temu deals with getting it shipped overseas. The problem
is that this is really slow, right. It takes like
two weeks for things to show up, and that's not
that slow by like normal standards, but this is the.

Speaker 3 (35:38):
US American standards. That is like a tortoise nightmareishly slow
because we have gotten used to a level I'd say gratification,
but like yeah, like this is a level of power
that was previously reserved for like Chinese emperors, and we
fucking use it every day to order fucking nailers from Amazon,

(36:01):
right or in my case, so a whole bunch of
materials to build a black logic which I will then
return as soon as my party is over.

Speaker 2 (36:08):
Incredible, you know, And this is this is a This
is also something that's kind of new for Temu because
PDD was built on being able to doing sales or
a fast enough they can sell fruit to people. Right,
do you know how hard it is to sell fucking
fresh fruit to people? That's like it's legitimately really difficult. Well, yeah,
you can't. You can't ship. You can't have a two

(36:29):
week ship for can But why it is? I mean
you have to do a bunch of b you have
you have to have an actual logistics infratructure set up
for it, right. You can't just ship it in like
an Amazon boll.

Speaker 3 (36:41):
They have to be they have to be like specifically
ripening along the bill.

Speaker 2 (36:44):
Yeah yeah, yeah, and and and and Tim is also
up to do that, right, And this is and this
is an issue with all of their stuff because you
know they're they're trying to do direct to consumer sales.
But the thing is in China it's really fast, and
here it's slow. And the upside for Temu is that
their stuff is really cheap, right, It's unbelievably cheap. And
you know, obviously they're losing money on the sales, and

(37:05):
most of the money they're losing on the sales is
from their ad spending, not from the actual sales. And
this is this is where you get into again the
really bleak part about this, where Okay, so are these
why are these prices so low? And part of its
tech money subsidy, but a lot of it is just labor,

(37:26):
just pure, pure, unrivaled labor exploitation. You know, when with
with the Chinese workers movement, like as like a a
sort of like collective mass movement just completely broken by Tianamen.
And then again dream like the crackdowns through the twenty
tens that wiped out whatever sort of like classical workers

(37:46):
movement style thing was may have popped up from the
strikes in twenty eleven, like there's there's no there's no
mass countervailing force in Chinese politics to try to raise wages,
like independent union organizing is illegal. You will get arrested.
The actual unions that exist, like they all trying of
union federation doesn't do shit. We don't really have that

(38:07):
kind of like fake union thing here. It's like it's
like a different but you know, like they're they're I
don't know, this is this is this is maybe not
the time for me to try to explain China union system.
Like the unions are fucking bullshit. They don't do anything.
Like if you go to them and be like my
wages are too low, they'll try to get you to
like negotiate with the company directly, right like like as
an individual, and like it's they're nonsense. They're completely useless.

(38:30):
And you know the results of this and the results
of just like the incredible poverty of the Chinese working
class and the fact that you know a lot of
Chinese migrant workers who are people who are actually making these goods.
So a lot of some of it's real workers, some
of its migrant workers, but a lot of these people's
wages are lower than they otherwise would because they're drawing
revenue off of like they're off of off of like

(38:52):
the plots of land that their family has like back
in the countryside when they like when they they like
migrate to another city to to find a job. Yeah, so,
like all of these factors are just institutionally like smashing
the price of like like smashing like wages, and there's
no there's no fucking there's not there's nothing really there
to resist them and and act like, you know, it's

(39:13):
not like the Chinese working class like completely takes it
lying down, right, but it's like the resistance strategies are
trying to work as little as possible, but that doesn't
that's you know, and that's something that can be very
effective in the sense of like you're working a lot less,
but it's not something that drives up like wages. And
so when when you're looking at Temu and you're seeing

(39:35):
a pair of Jeanes for two dollars, like what you
are seeing is the raw exploitation of the Chinese working class.
And this is also true of like the rest of
the fucking shit you buy from China, right, like almost
all of the price of like a shirt that you're buying,
I mean, Chinese textile manufacturing is kind of like not
what it used to be right, but like you know,

(39:56):
but like you're buying like fucking some bol shit from China.
Like if you're buying from like another drop shipping company, right,
like the thing you're actually paying for, you're paying the
drop shipping company. You're not fucking paying the workers. They're
not they're fucking not making shit all like all of
the stuff that's like, I mean, it's not like one
hundred percent, like a huge portion of of the fact

(40:17):
that the price is higher on non Temu sites is
just like it's just markups because this is this is
just what the Chinese economy is. It's just sort of
like it's you know, it's it's it's it's unbelievable exploitation.
And this brings us to the thing we're going to
end today on, which is does Temo use slave labor?

(40:40):
Oh oh okay, And the answer is probably, but it's
hard to tell. So this has been a big thing
because Ten is one of the companies that the State
Department brought up when they were doing their investigations into
like like Sheian was the other one into like are
these companies using shing John slave labor? And you know

(41:03):
this is labor from people put in in the fucking camps.
I think the answer is probably because I mean, so
the thing is, the State Department doesn't have any actual evidence, right,
Like they're all and they're they're doing this incredibly what
We'll get into this in a second, Like, you know,
obviously they're doing this because this is like this is
an intra like capitalist feud thing, right. The State Department's

(41:24):
talking about this because they're pissed at China.

Speaker 3 (41:26):
Yeah, this is like a nationalistic project for the United States.

Speaker 2 (41:29):
Yeah, but Comma, it's also probably true because these like
and and this this is like the thing specifically with
with PDD that we've been talking about is that they
don't intimus Like, they don't vet the sellers of stuff, right,
Like we talked about last episode that like people were
selling sleeping pills as date rate drugs, right, they don't
fucking vet it at all. So yeah, probably, like quite possibly. Yeah,

(41:53):
the stuff the stuff that they're selling from shing Jun,
and they have a pretty large presence there, like was
using sort of like prison slave labor from the camps there. However, Comma,
we can't talk about prison slave labor without talking about
the fact that fucking every goddamn US firm also uses
prison slave labor. Everyone from fucking McDonald's, the Starbucks to
Walgreens to JC Penny, like fucking every every company, every

(42:16):
American company you can fucking think of, uses slave labor
or their slave labor in their in their supply chain.
And they're using slave labor because in the US, under
the Thirteenth Amendment, slavery is legal as long as the
person as long as the person being enslaved is incarcerated.
So you know, like it doesn't fucking matter, like this
is this is this is the problem. It doesn't matter

(42:37):
whether you buy from the US or China. Right like
you're you're getting fucking slave labor. So if you if
you want to not do that, you're you're your only option.
If if you do not want to, if you do
not want everything you consume, like the food that you eat,
if you don't want, like everything that you use in
your daily life to be the product of unfathomed human exploitation,

(43:01):
your only option is to destroy the monstrous economic system
that reduces humans to commodities and tear up the fucking
roots of every single one of these companies from San
Francisco to Shanghai and burn it to the grounds. That's that.
Those are your options, like, it's not your individual consumer choice,
not gonna make it any better. That's what I got.

(43:22):
I okay, all right? Well oh god, like was it
the Super Bowl great this year? Yeah? What a game?

Speaker 4 (43:31):
What a game?

Speaker 3 (43:31):
Almost almost double overtime?

Speaker 2 (43:34):
That was crazy. I I don't know that was that
was the worst Chiefs team of all time and they
nobody could fucking beat them. We're so duped. We're gonna
get Patrick Mahobe is gonna win like a fucking twelve peet.
It's so over for every other sports team. Better things
aren't possible unless you make them possible.

Speaker 1 (44:00):
What Could Happen Here is a production of cool Zone Media.
For more podcasts from cool Zone Media, visit our website
coolzonemedia dot com, or check us out on the iHeartRadio app,
Apple Podcasts, or wherever you listen to podcasts. You can
find sources for It Could Happen Here, updated monthly at
coolzonemedia dot com, slash sources. Thanks for listening.

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