The curious case of Temu’s U.S. ‘headquarters’

Happy Friday, everyone. This is Jason Del Rey.

Today, I write to you about one of my journalistic obsessions: Temu, the discount shopping app that has become a favorite of millions of U.S. consumers basically overnight.

A subsidiary of Chinese e-commerce giant PDD (market cap of $167 billion), Temu only launched in the U.S. in the fall of 2022 but is already the most popular shopping app in the U.S. on both Android and Apple devices. Yes, more popular than Amazon.

Its appeal is straightforward: It sells a wide range of items with free shipping at what should be too-good-to-be-true prices—from $1.61 USB cables, to 88-cent eyeliner sets, to $38 memory foam mattresses. It keeps customers coming back by gamifying the shopping experience and offering a seemingly endless array of coupons.

Its prices are possible through some combination of tight control over Chinese suppliers, direct-from-manufacturer shipping, an advantageous century-old trade rule known as “de minimis,” and almost certainly selling some merchandise at a loss. Proponents say its model is a long-term threat to giant U.S. retailers, including dollar store chains and maybe even Walmart and Amazon eventually. Critics contend its astronomical advertising spending and questionable product quality will eventually relegate it to a similar position as Wish.com, a discount shopping app with similar prices and customer acquisition tactics, and that was once worth more than $18 billion but recently agreed to sell for just $173 million.

In the meantime, there’s another part of the Temu phenomenon that recently caught my attention: the claim that it was “founded” in Boston and that its corporate headquarters is located there, rather than in, say, Shanghai, the city that its wildly successful and secretive parent company calls home.

So I did a little digging.

Temu, whose official company name is WhaleCo, does in fact have office space in Boston’s Back Bay neighborhood. It leases space in the same building as a bunch of foreign consulates, including those of France, Spain, Portugal, Turkey, and Colombia.

But while its Boston office is real, its Boston staff is tiny, I’ve learned.

Multiple sources familiar with the company’s operations told me that Temu employs fewer than 20 people out of its Boston office. Most of the staff there works in legal or tax roles, these people said. On LinkedIn, a smattering of profiles claiming Temu as an employer list other work locations such as New York, Los Angeles, and Seattle, but the company is not believed to have any other U.S. offices, and sources say Temu leaders typically frown on remote work. Sources told Fortune that Temu has a much larger staff in China, including practically all of its product and technical staff, but the exact size could not be learned. PDD, owner of both Temu and China’s Pinduoduo, said in its recent annual report that the combined company employs more than 17,000 people.

As a quick aside, I’m also told that the company chose an East Coast headquarters for Temu over a West Coast one (like rival discount-shopping company Shein) because the 12-hour time difference with Shanghai allows for a few overlapping work hours for staff members that need to collaborate, while a 15-hour difference—as is the case in California, for example—would make communications more difficult. Employees at Temu work long hours in the vein of the 996 work week popular among China-based internet companies–that’s work hours of 9 am to 9 pm, 6 days a week. (I’m also told that the company chose Boston over New York City because office leases are less expensive there.)

Who actually runs Temu as the top decision-maker is another open question. Sun Qin, known as Dada, is the president of WhaleCo, and involved in big decisions, according to sources. His LinkedIn profile calls him a cofounder of Temu. But sources say that Pinduoduo executive Gu Pingping, who also goes by Dora, is also a top decision-maker.

As for why the company chose a U.S. headquarters in the first place if it was going to hire so few staff here, that’s unclear to even my sources. It’s possible it will pick up hiring here, or also that it had a change of heart. But one educated guess, according to one source familiar with the company, is that the Boston HQ was about creating a perception of a strong U.S. presence since Temu’s current largest customer base is in fact in the U.S. And certainly being linked to China isn’t necessarily a positive at the moment, as TikTok leaders well know.

“Temu still has a big pride point that they don’t want people to know how small the actual Boston office is,” this source told Fortune. “I think they are worried that if that was public, the perception of the company being a Chinese company could hurt them.”

I reached out to Temu to hopefully get some answers, but I never heard back.

So if you’re reading this and have information or ideas to share, please contact me. I’d love to learn more.

Jason Del Rey

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The rest of today’s Data Sheet was written by David Meyer.

This story was originally featured on Fortune.com