Due to Temu’s broader product selection and efforts to alter its shipping method, the Trump administration’s decision to prohibit low-cost imports entering the US tariff-free is more likely to have a greater impact on Temu than on fast fashion retailer Shein.
The so-called de minimis rule, which eliminated import customs on shipments valued less than $800, contributed to the meteoric rise of both sites in the United States in the past several years. More than 30 percent of all shipments to the United States each day were attributed to Chinese shops, according to a report from June 2023.
Both companies started making plans to rely less on the rule during the Biden administration when it came under investigation. However, according to analysts and sellers who spoke to Reuters, Temu was quicker in making modifications to its strategy. A new tab will open in a new window for Temu, which is owned by PDD Holdings. In the first half of the year, Shein plans to list in London.
According to tech expert Rui Ma, Temu has been growing its semi-managed model, which is similar to Amazon’s strategy of shipping goods in bulk to international warehouses rather than directly to consumers, very quickly at the beginning.
According to estimates from e-commerce market research firm Marketplace Pulse, over 20% of Temu’s US sales were shipped from local vendors instead of straight from China within a few months of first bidding to attract suppliers maintaining inventory in US warehouses last March.
Two Chinese Temu vendors told Reuters that by year’s end, half of their US sales went to Chinese warehouses.
Also, Temu has been sending a growing amount of its goods via sea. Ceva Logistics Greater China’s operations director Basile Ricard claimed that during the “second half” of last year, there was a noticeable increase in Temu ocean-freighting more commodities in bulk, including larger-sized and more valued items like furniture, which led to a decrease in imports below the de minimis criterion.
Despite opening centers in places like California and Illinois and a supply chain hub in Seattle, Shein is still more dependent on air freight to directly send the hundreds of kinds of ultra-fast fashion goods it produces every week, according to Ricard.
“I think it’s important to separate Shein from the rest of the e-commerce players because their business is based on speed of supplying new styles and they have to remain very reactive to trends, so speed is a bigger part of their business,” he stated.
Although most of Shein’s products are still manufactured in China, the company has begun to diversify its supply chain by incorporating vendors in countries like Brazil and Turkey. This process could be hastened in response to new restrictions and tariffs.
The USPS reversed its decision to stop accepting packages from China and Hong Kong 12 hours after announcing it would do so, further confusing the express shipping business and adding fuel to the fire caused by Trump’s executive order this week.
American consumers ordering from Shein, Temu, and Amazon Haul are confronted with increasing prices, leading Nomura analysts to predict a 60% drop in the amount of de minimis shipments to the US.
The number of shipments that entered the United States through the de minimis provision increased by 36% from 2023 to 2024, reaching almost 1.36 billion, according to data from CBP.
Nevertheless, Ma stated that she anticipated Shein and Temu’s ability to adjust swiftly, considering the nimbleness of China’s e-commerce companies and their supply chains.
“I think there will be real impact, especially in the short term, but it is not catastrophic,” Ma remarked. “China has the most competitive e-commerce operators and the most advanced supply chain. Short of a total ban or something crazy like that, I think they will be able to figure it out.”
Luis Gochoco is a seasoned managing editor and writer with over a decade of experience covering politics, technology, gaming, and entertainment news. With a keen eye for breaking stories and in-depth analysis, he has established himself as a trusted voice in digital journalism. Luis is one of the key forces behind the success of GameNGuide, contributing to 12 million views through engaging and high-traffic content. He also played a pivotal role in generating 8 million views on International Business Times, shaping the platform’s technology and gaming coverage.
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