U.S. Demand Declines for Temu and Shein Following Trade Policy Shifts
Low-cost e-commerce platforms Temu and Shein have experienced a notable slowdown in user engagement within the United States. This shift coincides with newly implemented tariffs on Chinese imports and the closure of the "de minimis" trade loophole, which previously allowed low-value shipments to enter the U.S. tariff-free.
Sharp Decrease in User Activity
Data from market intelligence indicates that Temu’s U.S. daily active users (DAUs) fell by 52% in May compared to March 2025, while Shein’s DAUs dropped by 25% over the same period. Similarly, monthly active users (MAUs) declined by 30% for Temu and 12% for Shein between March and May.
These declines reflect in app store performance as well, with Temu’s Apple App Store ranking falling from a consistent top 3 position a year ago to an average rank of 132 in May 2025. Shein’s ranking also dropped from a top 10 position previously to an average rank of 60 last month.
Reduced Advertising and Adjusted Logistics
Both companies have notably decreased their advertising expenditure in the U.S. market amid these challenges. Temu’s U.S. advertising spend plunged by 95% year-over-year in May, while Shein’s declined by 70%. In April, these reductions were also significant, with Temu cutting ad spend by 40% and Shein by 65% compared to the previous year.
In response to new tariffs, both platforms have revised their logistics strategies, moving away from direct drop-shipping from Chinese suppliers. Temu, for example, has invested in expanding its network of U.S.-based warehouses to mitigate tariff impacts and regulatory barriers, a change likely influencing their marketing and growth strategies.
Impact of Tariffs and Trade Regulations
The introduction of tariffs that eliminated the "de minimis" exemption for shipments valued below $800 has increased operational costs for these companies. The tariff rate for former de minimis imports is currently at 54%, scaled down from 120% following a temporary tariff truce. Analysts note that tariffs around 50% significantly undermine Temu’s pricing advantages, making U.S. operations more challenging.
International Growth Gains Momentum
Despite setbacks in the U.S., Temu’s global user base continues to grow robustly. Non-U.S. users accounted for approximately 90% of the platform’s 405 million monthly active users in the second quarter of 2025. Growth is particularly strong in regions such as Europe, Latin America, and South America, especially in less affluent markets.
These developments suggest that Chinese e-commerce platforms are strategically shifting focus towards international markets outside the U.S. to sustain growth amid rising trade barriers.
