Shares in Temu owner PDD Holdings (PDD) had a welcome surprise today despite being forced to work more closely with the greeting card industry to remove rip-off designs from its site.
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Lost Sales
According to an article from the BBC, the online shopping giant has faced complaints from independent card creators that hundreds of their copyrighted images have been used without permission, costing them thousands of pounds in lost sales.
Designers told the BBC that even when they have tried to get the plagiarized greeting card images off the Temu site, they have re-appeared within days. They describe the process as like the fairground game “whack-a-mole.”
Temu defended its actions declaring that protecting intellectual property was a “top priority” and that it was encouraging sellers to join the trial of a new ‘takedown’ process specifically created for the greeting card industry.
This move came after pressure from the Greeting Card Association, which will mean that stolen designs are removed more quickly and won’t be able to be re-uploaded.
The process will use AI to log the designer’s original creation as a protected image. It then blocks any products using that design before they go on sale.
System Working
One card publisher, who helped develop the new system, told the BBC that they saw 68 listings removed automatically. This would previously have meant 68 separate forms or emails having to be sent to Temu.
One designer said her designs had “been lifted and were being advertised by other sellers on cards and other products like t-shirts.”
“It’s not a nice feeling to see something you’ve poured all your love and hours into taken within minutes,” she told the BBC. “I was in shock, and I actually thought to myself ‘what is the point of me still designing, I might as well just stop now’.”
Amanda Fergusson, the chief executive of the GCA, said: “We know our members feel very strongly about copycat sellers, and what’s more we also know customers are often disappointed by cheap copies. Our dialogue with Temu and the actions they’re taking, is a welcome first-step to address those issues,” she added.
This is why legal and regulatory issues are such a key risk for e-commerce operators like Temu. It is something investors need to consider when investing in a stock.
Is PDD a Good Stock to Buy Now?
On TipRanks, PDD has a Moderate Buy consensus based on 8 Buy and 5 Hold ratings. Its highest price target is $168. PDD stock’s consensus price target is $144.56, implying a 9.46% upside.
