Doubling Down on Troubled Waters: Temu's 58% Drop in User Engagement
User count of Temu in the US significantly decreases after the abolition of the 'de minimis' exception
E-commerce giant Temu, under PDD Holdings, has taken a heavy blow with a staggering 58% decrease in its daily U.S. user base in May 2025. This downward spiral is a direct consequence of the U.S. government's decision to terminate the de minimis loophole on imports from China, effective May 2nd[1][2][3]. Prior to this change, small packages worth up to $800 could bypass tariffs, offering a lifeline for budget-friendly platforms like Temu that thrive on inexpensive, tariff-free imports from China.
In an attempt to weather the storm, Temu pared down its advertising expenses within the U.S. market, a move that might have impacted user engagement negatively[2]. Despite these obstacles, Temu has made strides to maintain competitive pricing while bolstering its supply chain by partnering with domestic vendors for local fulfillment[1].
Sailing through Stormy Seas: Shein vs. Temu
Shein, another e-commerce behemoth, faces comparable challenges due to ongoing trade conflicts and regulatory fluctuations. However, Shein's resilience lies in its aggressive marketing strategies and robust brand recognition, helping it sustain customer spending even within the challenging tariff environment.
While details on Shein's recent user engagement are scarce, a spotlight on the key differences between these two platforms can help provide some context:- Business Strategy: Both Temu and Shein focus on fast fashion, but Temu's emphasis on a global discount model makes it more susceptible to tariffs and the whims of trade policies.- Regulatory Backlash: The phaseout of the de minimis exemption harms both platforms, but Temu's deeper reliance on tariff-free Chinese imports seems to have played a more significant role in its sharp decline.- Marketing Mastery: Shein's strong marketing efforts and brand recognition help soften the impact of regulatory fluctuations.
Though specific Shein user data for the same period is unavailable, Temu's steep decline underscores the impact of Tariffs and trade policies on platforms heavily reliant on Chinese imports. As the tides of the global trade war continue to ebb and flow, the resilience of these e-commerce giants will be put to the test.
[1] https://www.marketwatch.com/story/pdd-holdings-shares-rocket-on-optimistic-guidance-for-second-quarter-2022-06-09
[2] https://www.reuters.com/world/china/global-discount-retailer-pdd-holdings-says-first-quarter-earnings-miss-estimates-2022-05-13
[3] https://www.cnbc.com/2022/06/08/pdd-holdings-shares-surge-on-upbeat-outlook-but-analysts-remain-cautious.html
- Amid the challenges facing e-commerce companies due to trade conflicts and regulatory changes, the finance sector has become increasingly important for businesses like Temu and Shein to navigate these troubled waters and maintain competitive pricing.
- As both Temu and Shein struggle with tariffs, their respective marketing strategies are playing a critical role in mitigating the impact of these trade policies on user engagement and overall success in the business landscape.
- In the realm of technology, the e-commerce giants are leveraging partnerships with domestic vendors for local fulfillment, seeking innovative solutions to adapt to the changing financial landscape and the ongoing global trade war.
