American buyers give up Temu and Shein, after Trump has eliminated a tax gate that favored Chinese retailers / they move to Europe
Temu and Shein, targeted by the measures taken by the Trump administration. Photo: Porzycki / Nurphoto / Shutterstock Editorial / Profimedia
The online retailers and Shein have registered a decrease in the number of users in the US, after President Donald Trump has imposed high customs taxes on Chinese products and eliminated a fiscal portion that offered them an advantage in front of the competition, writes Financial Times.
The number of Active Users of the month AU TEMU, an indicator of the degree of involvement in the Chinese retailer application, decreased by 51% to 40.2 million in the US between March and June, according to data provided by Sensor Tower market analysis, quoted by the Financial Times.
The number of American buyers using the Shein app has also decreased in the same period, although not as drastically. The retailer registered a 12% decrease in the number of monthly active users, reaching 41.4 million, according to Sensor Tower.
Shein and Temu have been pioneers in a new electronic trade model that has revolutionized the retail industry in the Western world over the past five years.
Both avoided import fees by sending products manufactured in China directly to consumers' home, in the form of individual packages.
Cheap prices and intense advertising campaign on social networks allowed Shein and feared to accumulate a vast base of customers in just a few months.
The measure taken by Trump
On May 2, Trump eliminated the exemption from taxes that benefited from the low value entered in the US, known as “de Minimis”, for the packages from China and Hong Kong, qualifying it as “a great deception”.
The president replaced the exemption, which allowed packages with a value of less than $ 800 to enter the US without customs duties, with a 90%customs duty. It was later reduced to only 30% as part of a detection of commercial relations with China.
Following politics, TEMU has revised its business model. Instead of sending products from China factories, it has begun to send orders from sellers based in the US.
The decrease in the number of users of the TEMU and Shein can also be related to a decrease in the advertising expenses of each company.
In the last three months, the advertising expenses of TEMU in the US have decreased by 87%, and those of SHEIN 69% compared to the same period last year, according to Sensor Tower.
Last year, they ranked 10th and 11 in the top of the largest US digital advertising agents, and are now outside the top 60.
As the US environment became more hostile, Temu and Shein moved their attention to Europe.
The number of people who used the TEMU application in June increased by 76% in France, 71% in Spain and 64% in Germany, compared to the same period last year, according to Sensor Tower. At the same time, the number of SHEIN's active monthly users increased by 13-20% in the UK, Germany and France.
But growth in Europe could also be in danger, as the EU intends to perceive a 2 euro fee for small packages entering the community block, and the British government also considers the elimination of this tax exemption.
