Chinese ecommerce giant Temu has more than doubled its EU pre-tax profits to nearly $120 million (£90m) in 2024, despite employing just eight staff at its Ireland-based headquarters, the latest accounts show. The company’s rapid growth – fuelled by ultra-low prices, gamified sales tactics and aggressive social media marketing – has raised eyebrows across Europe, especially as it paid just $18 million in corporation tax, including a mandatory $3 million top-up under the EU’s global minimum tax rules.
Temu’s EU parent, Whaleco Technology, reported revenues of $1.7 billion, up from $758 million the previous year. However, critics – including Paul Monaghan, the chief executive of the Fair Tax Foundation – argue this figure only reflects commission and fees, not the full consumer sales volume, which is estimated to be closer to $10 billion.
Skeleton staff, massive scale
How does Temu scale so fast with so few employees? The answer lies in its asset-light model. Temu operates as a marketplace, connecting manufacturers directly with consumers. Most goods are shipped from China, bypassing traditional retail infrastructure. This model allows Temu to avoid the overheads of warehousing, staffing, and local logistics – at least for now.
But this approach is under increasing scrutiny. The EU is preparing to abolish the €150 de minimis exemption (already abolished in the US), which currently allows low-value parcels to enter the domain duty-free. A €2 per parcel tax is also being proposed to curb the flood of cheap imports. The European Conservative reports that last year 4.6 billion small packages entered the EU – 91% of which came from China.
UK moves to level the playing field
In the UK, Chancellor Rachel Reeves has announced a review of the £135 de minimis threshold, which similarly allows duty-free imports. British retailers argue this gives China-founded platforms like Temu and Shein an unfair advantage, allowing them to undercut domestic sellers who must pay VAT and customs duties, and meet employment regulations. Currently, items valued at £39 or less also do not attract import VAT.
Reeves’ review aims to level the playing field, especially as Temu’s UK operations continue to grow. The platform now boasts over 12 million UK users, and is actively recruiting British sellers to diversify its product range and reduce reliance on Chinese imports.
Temu’s push to onboard UK sellers – particularly for bulky items like furniture and appliances – suggests a strategic pivot. With tax reforms looming, the company may be preparing for a future where local fulfilment becomes essential to maintain competitiveness.
A spokesperson for Temu stated that the company “categorically rejects any suggestion that our structure or operations are designed to avoid taxes or minimise our economic footprint in Europe.”
“Billions of euros in taxes”
The spokesperson continued: “Despite being a young and fast-growing company still in the investment phase, we have already paid billions of euros in taxes across European jurisdictions, and that figure will continue to rise as our operations mature. The tax figure cited refers only to the tax paid by a single legal entity and does not include customs duties, VAT, and other taxes. Taken together, we believe our total tax contributions already exceed those of many more established peers in the industry.
“Our entities in Ireland are real operating companies employing real people and supporting our wider European operations. Our platform has also helped create thousands of indirect jobs across logistics, warehousing, and related industries. As a global company active in more than 90 markets, Temu employs staff around the world, including across Europe. The number of employees in any single corporate entity does not reflect the full scale of our operational presence, investment, or economic impact in the region. Moreover, the figure cited is outdated and does not accurately represent our current staffing levels.
“Temu entered the European market just two years ago and has invested heavily in building its platform to connect sellers and consumers more efficiently, passing those efficiencies back to consumers in the form of lower prices on quality goods. At the same time, we have been creating new growth opportunities for local sellers across Europe – including in the UK, Ireland, France, Germany, Belgium, Italy, Spain, and other markets – by helping them reach more customers both within their countries and abroad.
“Our focus is on the long term: building a sustainable, compliant, and trusted platform that helps consumers access quality products at affordable prices while enabling local sellers across Europe to grow their businesses and reach new markets.”
As Temu’s footprint expands across Europe and the UK, its disruptive model is forcing regulators and retailers to reassess the rules of engagement in cross-border ecommerce. Whether the company can sustain its rapid growth while adapting to a more regulated landscape remains to be seen — but its rise is already prompting a broader rethink of how global ecommerce platforms operate in Europe.
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