My country made it illegal to sell at a loss (for that exact reason) and IIRC wish and/or temu got in some kind of legal trouble for it. So did IKEA when they tried to use their restaurant as a loss leader - illegal here!
Then there’s the matter of shipping subsidies from the PRC, ain’t no way cross-continent shipping is 0.02 € on a 5 € item for which the last mile is handled by the national postal service which I know for a fact charges anyone more than one euro for delivering a damn envelope.