Uncover the invisible business model behind the deals on Shein, Temu, and Alibaba. They don’t just sell products; their primary asset is your information. Learn how they share and monetize your data and what this means for you as a consumer.
The True Cost of an Irresistible Offer
In a saturated digital marketplace, platforms like Shein, Temu, and Alibaba have captured the attention of millions with a simple formula: extraordinarily low prices and a virtually infinite product catalog. However, when a product seems too cheap to be profitable, it’s crucial to ask: what’s the real business model?
The answer lies in an asset far more valuable than the clothes or gadgets they sell: your personal and financial data. These companies have perfected a model where the product sale is just the first step. The true revenue engine is the collection, analysis, and monetization of the information you generate with every click.
The Key Distinction: «Sharing» Is Not «Selling»
When reviewing their privacy policies, you’ll find precise and deliberately ambiguous legal language. The platforms state they do not «sell» your personal information in the traditional sense. Instead, they «share» it with an extensive network of partners.
They do not trade your direct identity—meaning, they don’t sell a list with your name and address. What they monetize is access to your anonymous consumer profile: your shopping habits, interests, location, and purchasing power. This model is so lucrative that the global programmatic advertising market surpassed $678 billion in 2023 (Source: Grand View Research).
To dispel the notion that some platforms are safer than others in this regard, here are direct excerpts from their privacy policies:
Shein (Privacy Policy, 2024): «We do not sell your personal information. However, we may share your information with third-party service providers, business partners, and affiliates…»
Temu (Privacy Policy, 2024): «We may share your personal information with our affiliates, service providers, and business partners… for purposes such as marketing, advertising, and analytics.»
Alibaba (Privacy Policy, 2024): «We may share Personal Data with third-party service providers… marketing and advertising platforms… and other third parties… If you are a Buyer, we will share details of the last viewed products on the Platform to enable Sellers, their respective affiliates and/or their third-party services provider to contact you.
Table: How Shein, Temu, and Alibaba Monetize Your Data
| Step | What They Say | What They Really Do | Key Figures/Impact |
|---|---|---|---|
| 1. Sharing Data with Third Parties | «We don’t sell your data» | Share with partners: advertisers, logistics, affiliates | Programmatic advertising market: $150+ billion (2023), +20% annual growth |
| 2. Using Aggregated Data | «We use anonymous data» | Analyze millions of purchases to predict trends | Inventory loss reduction: 30-40% (McKinsey 2022) |
| 3. Massive Data Collection | «We only collect necessary data» | Collect location, browsing, clicks, IP to build detailed profiles | 70% of buying decisions influenced by digital profiles (Gartner 2023) |
2. The Power of «Aggregated» Data: Beyond the Shopping Cart
These platforms collect a volume of information that extends far beyond what is necessary for a transaction. Although presented as «anonymous» or «aggregated» data, its value for market intelligence is immense. The information collected includes:
- Browse Data: Search history, viewed products, and clicks.
- Technical Information: IP address, device type, and operating system.
- Location Data: Precise GPS location (if app permissions are granted).
- Interaction Data: How you respond to emails and advertisements.
With this intelligence, platforms can predict trends, optimize their supply chains—AI-driven inventory management can reduce stock levels by up to 35% (Source: McKinsey, 2023)—and sell market analysis to other manufacturers.
3. The Financial Link: The Most Critical Point
Although they usually do not directly “sell” your card number or bank details, their privacy policies allow them to collect and share:
- Purchase history and payment methods used (credit card, debit card, PayPal, etc.).
- Information about the frequency and amount of your payments.
- Data that can be used to create credit risk profiles or financial behavior patterns.
This data is shared with third parties such as payment processors, banks, credit agencies, and financial analytics companies.
Real cases of data breaches and misuse
Shein data breach in 2018:
Shein suffered a massive hack that exposed personal and financial data of over 6 million users. Although not all financial details were stolen, the breach put payment-related information at risk.
Source: TechCrunch, 2018.
Temu and privacy concerns (2023):
Independent studies found that Temu’s app collects more data than strictly necessary, including permissions to access files and location, increasing the risk of exposing sensitive data.
Source: Privacy International, 2023.
Alibaba and use of data for credit scoring:
Alibaba uses users’ purchase and payment data for its “Sesame Credit” system, which influences creditworthiness and access to financial services. This shows how financial information is used for decisions that affect consumers beyond just buying products.
Source: Harvard Business Review, 2021.
3. Associated risks
- Exposure to fraud and identity theft:
When financial data is leaked or misused, it can facilitate fraud or identity theft. - Loss of control over your financial information:
Sharing data with multiple third parties means consumers lose control over who accesses their information and for what purposes. - Impact on credit scoring and access:
Automated systems may use data to deny credit or increase rates without the user understanding the process.
4. Key data and figures
- According to an IBM Security study (2023), the average cost of a data breach involving financial exposure is $4.45 million USD.
- A report by Experian (2022) indicates that 65% of consumers in the U.S. worry about how companies use their financial data.
- Statista reports that 58% of global users have limited their online purchases due to concerns about privacy and financial security.
4. The Real Revenue Model
The profit margin on a direct sale of a low-cost product is minimal. However, revenue generated from digital advertising and data exploitation can account for an additional 30-40%.
A simplified example:
- An item sells for $5.00 (Direct profit: ~$0.35).
- Value generated from the user’s data profile for ads and analytics: $1.50 – $2.00.
| Concept | Approximate profit (%) | Source/Reference |
|---|---|---|
| Net margin per sale | 3% – 8% | Shein, Temu financial reports |
| Data and advertising revenue | 30% – 40% additional | Market studies and analyst reports |
| Estimated total profit | 33% – 48% | Approximate sum of sales + monetization |
The real profit derived from the transaction can be up to 6 times greater than that from the product itself. Alibaba, for instance, generates over half of its operating income from advertising and data-based services, not from item sale. In summary: you are the raw material that generates the real profits.
These companies do not promise to sell your data because laws prohibit or regulate it, but they do use ambiguous language to “share” and “analyze” your information.
Conclusion: Shopping Consciously in the Digital Age
The low prices offered by these mass-market platforms are, to a large extent, subsidized by the commercial value of your privacy. As a consumer, you are not just a customer; you are a data source—the most profitable asset in the digital economy.
Understanding this model doesn’t mean you have to stop shopping, but rather that you should do so with awareness. By managing your permissions, using secure payment methods, and demanding transparency, you shift from being the raw material to being a conscious consumer who knows the true value of their information.