Chinese online retail giants Shein and Temu have issued a warning to their US customers, indicating that prices for their popular products will rise starting next week. This change follows the imposition of significant tariffs on goods imported from China by President Donald Trump. In nearly identical statements, both companies highlighted that their operating expenses have surged due to recent adjustments in global trade regulations and tariffs, and they will implement price adjustments effective from April 25.
Shein and Temu have become immensely popular in the United States, attracting tens of millions of customers with their ultra-low prices. This rapid growth has placed significant pressure on established e-commerce leader Amazon, which responded by launching a new platform named Haul last November, offering products priced under $20 (£15.10). Since his return to the White House in January, Trump has instituted tariffs as high as 145% on various Chinese imports. Recent announcements indicate that when these new tariffs are combined with existing ones, the total levies on certain Chinese goods could soar to an astonishing 245%.
Additionally, President Trump has eliminated a duty-free exemption for goods valued under $800, a provision that previously allowed Shein and Temu to gain rapid access to the US market. This decision has raised concerns among US lawmakers on both sides of the aisle, who argue that these companies have exploited the exemption. According to US customs authorities, approximately 1.4 billion packages entered the US under this arrangement last year, a dramatic increase from just 140 million in 2013.
Since the implementation of these tariffs, both Shein and Temu have experienced a substantial decline in their app rankings. Currently, Temu has fallen to the 75th most downloaded free app on the US Apple Store, after consistently holding a position in the top five for the past two years. Similarly, Shein has dropped to 58th, down from 15th just a month ago. In contrast, other Chinese retail applications continue to perform well in the US, with DHgate holding the second position and Alibaba's Taobao ranked seventh.
In response to the changing market dynamics, both Shein and Temu have significantly reduced their advertising expenditures in the US. Temu has ceased all Google Shopping ads in the US as of April 9, as reported by Mike Ryan, the head of e-commerce insights at online advertising agency Smarter Ecommerce. Furthermore, Temu's average daily advertising spend on social media platforms, including Facebook, Instagram, and YouTube, decreased by 31% in the two weeks leading up to April 13, compared to the previous month. Shein's average daily ad spending also saw a 19% decline during the same timeframe, according to data from market intelligence firm Sensor Tower.
In their official statements, both Shein and Temu encouraged customers to make purchases before the anticipated price hikes take effect. “We stand ready to make sure your orders arrive smoothly during this time. We're doing everything we can to keep prices low and minimize the impact on you. Our team is working hard to improve your shopping experience,” the companies asserted. Despite these reassurances, both Shein and Temu have not responded to requests for further comments from the BBC.
