Temu Caught Deceiving Shoppers, Fined $3.7M in Hungary
The cross-border e-commerce platform, Temu, has been fined 13.3 billion forints (approximately $3.7 million) by the Hungarian Competition Authority due to improper business practices. Temu acknowledged the violations and waived its right to appeal to avoid harsher penalties.
Investigation and Penalties
On April 28, the Hungarian Competition Authority concluded its investigation into Temu's European operator, Whaleco Technology Limited, imposing a “fine + compensation” package totaling 13.3 billion forints. The investigation, which began in March 2024, identified several consumer misguidance violations by Temu, including:
- Creating false discount impressions with strikethrough prices
- Unverifiable claims of “up to 95% discounts”
- Labeling non-discounted items as promotional
- Using psychological pressure tactics like “only 4 left” or “purchased 1 minute ago”
Temu's cooperation during the investigation and its decision to forego an appeal helped it avoid more severe penalties. Additionally, a significant consumer compensation plan was included in the penalty, offering a 2000 forint (approximately $5.5) voucher or cash compensation to users who ordered from Temu's Hungarian site between November 2023 and September 2024.
Related reading: Temu and Shein Face Regulatory Headwinds as UK Consumers Call for Fairer E-Commerce Rules
Impact on the Eastern European Market
This hefty fine signifies a shift in the Eastern European market from “wild growth” to “compliance regulation.” Regulatory bodies are now targeting false discounts, and future marketing strategies will need to be more restrained, avoiding the misuse of urgency cues.
With the EU customs reform targeting low-value parcels, establishing local warehouses or partnering with local suppliers in Hungary will be crucial strategies for mitigating compliance risks and enhancing efficiency.
Temu's Continued Growth in Hungary
Despite regulatory pressures, Temu's business in Hungary continues to expand, particularly through its Local Seller Program. From 2026, sellers with local warehousing in Hungary and neighboring countries like Romania and Poland can serve local markets and leverage Temu's logistics network to reach all of Europe, including the UK and Switzerland.
Temu's rapid growth in Hungary is evident, with 2024 seeing over 9 million orders and approximately 110 billion forints (around $3.1 billion) in revenue. The growth rate for 2025 is expected to remain between 70% and 75%. By the end of 2025, Temu's monthly active users (MAU) in Hungary stabilized at around 1.8 million, representing nearly 50% of Hungary's online shoppers.
Related reading: Temu’s Explosive Growth: From Zero to 24% Global Dominance
Marketing and Expansion Strategies
Temu's marketing efforts include leveraging platforms like TikTok, Facebook, Google, and Twitter to capture global traffic with minimal barriers. Their strategy focuses on rapid account setup, optimized traffic flow, risk assurance, and performance tracking to double brand sales growth.
Meanwhile, other e-commerce giants like Amazon are also expanding their operations, with plans to invest significantly in logistics and infrastructure in Europe, further intensifying the competitive landscape.
Final Thoughts
The fine imposed on Temu by the Hungarian authorities underscores the increasing importance of compliance in the rapidly evolving e-commerce landscape. As the market shifts towards stricter regulations, platforms and sellers must adapt their strategies to ensure compliance while continuing to grow and serve their customers effectively.
Temu's case serves as a reminder of the potential consequences of non-compliance and the need for transparency and ethical practices in marketing and consumer interactions. As the industry moves forward, maintaining a balance between growth and regulation will be key to sustainable success.
