U.S. demand for products from Shein and Temu decreases as a way to acquire low-cost merchandise narrows
The popular low-cost e-commerce platforms Temu and Shein have experienced a significant drop in usage in the key U.S. market, a trend that's been attributed to President Trump's tariffs on Chinese imports and the closure of the de minimis loophole.
According to market intelligence firm Sensor Tower, Temu's daily active users (DAUs) dropped by a staggering 52% in May, compared to March, whereas Shein's DAUs decreased by 25%. The same trend was observed in monthly active users (MAUs), with a 30% drop for Temu and a 12% drop for Shein.
The declines in user engagement were also mirrored in both platforms' Apple App Store rankings. In May 2025, Temu ranked an average of 132, down from a top 3 ranking a year prior, while Shein averaged a rank of 60 last month, compared to a top 10 ranking the year before.
These drops come as both Temu and Shein have cut back on their U.S. advertising spend in recent months, following Trump's tariff announcements. In May alone, Temu's U.S. ad spend plummeted 95% year-on-year, with Shein seeing a 70% decrease.
Trump announced sweeping tariffs on Chinese imports in April, including the end of the "de minimis" tariff exemption on May 2, which had previously allowed companies to import low-cost goods below $800 duty-free.
Eyes Turning Towards Other Markets
Despite the slump in the U.S., Temu's popularity has picked up outside the U.S., with non-U.S. users accounting for 90% of the platform's 405 million global MAUs in the second quarter. This growth has reportedly been supported by gains in Europe, Latin America, and South America.
As the U.S. market becomes more challenging, both platforms are likely to focus more on these international markets.
Implications for Chinese Platforms
These changes are likely to impact Chinese platforms' growth prospects in the U.S., increasing costs and creating regulatory hurdles. Rui Ma, founder and analyst at Tech Buzz China, suggests that these challenges could force platforms to redirect their efforts towards other markets like Europe.
Tech Buzz China research demonstrates that a 50% tariff would be the point at which Temu would lose most of its price advantages and struggle to operate. However, the current tariff on former de minimis imports stands at 54%, having been lowered from 120% as part of a 90-day tariff truce between the U.S. and China.
With higher costs and potential changes to product offerings, Chinese platforms may find it more challenging to compete with U.S.-based e-commerce platforms that source domestically or from non-Chinese suppliers.
As the situation unfolds, these trends could reshape the competitive dynamics in the cross-border e-commerce sector.
- The slump in the US market for Temu and Shein, due to President Trump's tariffs and the closure of the de minimis loophole, has led these platforms to focus more on international markets, such as Europe, Latin America, and South America.
- The higher costs and regulatory hurdles resulting from these tariffs may force Chinese platforms to reconsider their growth prospects in the US and redirect their efforts towards other markets like Europe.
- According to Tech Buzz China research, a 50% tariff could be the point at which Temu loses most of its price advantages, making it difficult for the platform to operate. However, the current tariff on former de minimis imports stands at 54%, having been lowered from 120% as part of a tariff truce between the US and China. This indicates a challenging environment for Chinese platforms competing with US-based e-commerce platforms that source domestically or from non-Chinese suppliers.
