The US government is increasingly scrutinizing fashion companies’ operations in China, prompting some of them to move their operations to the safe haven of the UK. Those companies include Temu, the Chinese e-commerce giant that’s garnered a lot of attention from Gen Z and is hot on the heels of digital fast-fashion competitor Shein.
Temu’s parent company, PDD Holdings, recently relocated its headquarters from Shanghai to Dublin. Last week, PDD filed the move with the US Securities and Exchange Commission, stating that its headquarters are now in Dublin, Ireland.
Temu has expanded rapidly in Europe and now has operations in the UK, France, Germany, Italy, the Netherlands and Spain, as well as the US, Canada, New Zealand and Australia. Despite this global presence, news platform Nikkei Asia reports that Temu “has few employees overseas.” Most employees work in Guangzhou and Shanghai.
Dublin is a popular location for technology companies due to its favorable corporate tax regime and has already attracted the likes of Apple, Meta and Google. It appears that Temu’s parent company has also been drawn to this location, possibly in search of a more favorable tax environment.
Dublin is a tax haven for tech companies
The move to Dublin could also be seen as a strategic response to growing criticism of fashion companies’ activities in China. The US government has pressured companies to sever ties with Chinese suppliers amid allegations of forced labor and human rights abuses in Xinjiang province. By relocating its headquarters to the UK, Temu’s parent company may be trying to distance itself from these concerns and support its expansion in a more stable environment, despite having its supply chain anchored in China.
This translated post previously appeared on FashionUnited.com.