The European Commission has opened an investigation into Temu for failing to cooperate adequately during a surprise inspection carried out in December at its Dublin headquarters. The EU body believes the company breached its obligation to provide key information and documentation, which could result in a fine of up to 1% of its global revenue, approximately €530 million. Meanwhile, since July 1st, parcels under €150 originating from outside the European Union have been subject to a €3 tariff per category, and an additional €2 tariff is expected this fall. This directly impacts the direct-shipping model from China that has fueled Temu's growth in Europe.
This double regulatory front is forcing the platform to rethink its logistics strategy on the continent . Temu has signed an agreement with DHL to ensure that by 2027, 80% of its products will be distributed from local warehouses, a shift towards the local-to-local model also being pursued by Shein. Tariff pressure and the EU investigation into Temu are accelerating a transition that, if consolidated, will completely change how Asian e-commerce giants operate in the European market.
The Brussels investigation and the possible fine
The European Commission has sent Temu a statement of objections detailing alleged irregularities during an inspection carried out between December 2 and 5 at the offices of its Irish subsidiary, WhaleCo Technology Limited. According to Brussels, the company failed to respond to several requests for basic information, including details about its organization in the EU, the IT systems it uses, and certain accounting records. If the infringement is confirmed, the fine could reach $617 million (approximately €530 million), based on the 2025 financial statements of its parent company, PDD Holdings.
Temu, for its part, categorically rejects the accusations and maintains that it fully cooperated during the inspection. In a statement, the company affirmed that it will respond to the charges and is confident that Brussels will reconsider its preliminary findings. Furthermore, it denies having received foreign subsidies that distort competition in the internal market and argues that it finances its European operations with cash flows generated by its own business. "We do not need to resort to foreign subsidies to finance any competitive activity," the company stated.
The impact of the new tariffs on the business model
The implementation of tariffs on low-value packages has forced Temu to accelerate its local warehousing plan . The agreement with DHL stipulates that within two years, 80% of products sold in Europe will be distributed from warehouses located within the European Union—a radical shift from Temu's previous international shipping model . Shein is following a similar path, seeking alternative suppliers within the continent to reduce its exposure to import tariffs.
For the European logistics sector, this shift presents an opportunity, as demand for warehouses and logistics space grows as these platforms seek to shorten distances to the end consumer. The paradox is that Asian giants are now adopting, forced by regulatory pressure, the same proximity model that European operators have been advocating for years as a competitive advantage. When taxation ceases to reward direct shipments from outside the EU, proximity logistics once again becomes the most profitable option, even for those who built their businesses on the opposite model.
The combination of regulatory pressure and tariff changes is forcing Temu to transform its logistics model in Europe, shifting from direct shipments from China to a local warehousing system. While the European Commission continues its investigation, the company defends its cooperation and denies any improper subsidies. The outcome of this process will define the future of Asian platforms in the EU market.
