Students’ financial literacy skills crunched by SHEIN and Temu marketing tactics

So says the Financial Basics Foundation, which has warned ultra-cheap retailers like SHEIN and Temu are targeting young people in a number of insidious ways, with click-worthy gamification tactics, hyper-personalised shopping experiences and social media influencers prompting reckless and repeated ’add to cart’ behaviours.

Katrina Samios, CEO of the not-for-profit, says it’s now critical that students are armed with the knowledge to both identify and disengage from these strategies.

“All of these tactics encourage young people to spend, often leading to higher levels of debt.

“And what we’re saying is that financial literacy and financial capability is more than just [learning about] budgeting and interest rates and the topics that are [foundational] … it’s about having the confidence, and the behaviours and attitude, to be able to resist some of these tactics.”

Recent Roy Morgan research has revealed most SHEIN and Temu users are repeat customers, with more than 40 per cent having purchased four or more times from their online stores within 12 months.

The retailers are targeting young people specifically, Samios suggests, and potentially ushering them down an unfavourable financial path.  

“A large percentage are Gen Z consumers, (aged) 14 to 24, and they’re obviously vulnerable because of their digital engagement and reliance on social media recommendations.

“The consequences are that they are often over-spending, and it leads to debt, and there’s often regrets.

“We also know that there are obviously environmental consequences in the waste as a result of all these types of purchases,” she warns.

Addictive, game-based mechanisms like pop-up prize wheels, freebie offers, progress markers, countdown timers and flash sales are used to conjure a sense of urgency, incentivising students to spend without really thinking, Samios adds.

Then there’s the influencer sphere to contend with. From cheap clothing ‘hauls’ on TikTok, to aesthetic ‘get ready with me’ reels on Instagram, Samios says young people are heavily influenced by social media figures that are promoting excessive consumption.

“Also, the algorithms collect user data to create highly targeted shopping experiences, and they reinforce repeat purchases and emotional spending habits,” she adds.

”Sometimes I think we’re kind of aware that they happen, but they’re persistent and they’re constant, and it’s really difficult to resist those,” Samios says.

In the past year, more than two million Australians shopped across Temu and SHEIN platforms every month, generating more than $8 billion in combined annual sales, she flags. 

Too many young people are leaving school without having learnt any personal finance or money management skills, Samios, pictured above, says.

This April is Financial Literacy Month, and Samios is using the occasion to call for strengthened ‘financial wellbeing’ offerings in Australian schools to counter the online marketing scene.

Generally, elements of financial literacy are covered off in economics, business subjects or mathematics, but this kind of issue sits in a different realm, she says.

“This is a really deep life skills conversation. This should sit in those life skills lessons.

“These are conversations that we think should sit in that pastoral care, personal development, wellbeing, life skills [slots] in the timetable, not in maths and economics and business, which are also electives, which means lots of young people don’t choose them.”

Too many young people are leaving school without having learnt any personal finance or money management skills, Samios says.

“Although it’s in the Australian curriculum, it’s not consistent, it’s not mandatory and it’s not delivered in a way that covers the breadth of topics that includes things like understanding these marketing tactics, and having the skills to be able to budget effectively, and understand the concept of active saving and restrained spending – which helps you avoid just falling victim to this type of behaviour.”

Knowledge has to precede financial capability, which is a learned ‘behaviour and an attitude’, Samios says.

“There is no doubt about that, that the knowledge component is actually only one small aspect of that, but it’s the springboard from where you develop the (right) behaviours and attitudes.”

And while education might not be the sole antidote needed to combat clever, data-driven marketing attempts online, it’s one of the most powerful we’ve got, Saimos says.

“We’d love schools and curriculum advisors to think about developing financial wellbeing courses in their life skill areas. That’s our big audacious goal.”

Financial Basics Foundation offers a range of free financial resources for teachers and students, and urges young consumers to follow a few basic financial ‘rules of thumb’:

Recognise marketing tactics: Understand how personalisation, influencer endorsements and gamification are designed to influence purchasing decisions.

Practice conscious spending: Before making a purchase, consider its necessity and impact on your budget.

Seek financial education: Engage with resources that enhance financial literacy, enabling more informed and sustainable spending habits.

“Our resources are independent, they’re written by Australian educators and they’re freely available to any Australian secondary school, teachers, parents, young people, or community organisations,” Samios adds.