In the last months, Temu, the popular Chinese e-commerce platform, has been involved in a scenario of profound transformation, especially after the imposition of new tariff barriers in the United StatesThis situation has forced the company to redefine its expansion plans and adjust its advertising and sales strategy in several key markets.
The abrupt drop in sales observed between mid-May and early June - with declines of up to 25% compared to last year - marks a turning point in the trajectory of Temu, which had burst onto the US scene with force thanks to its policy of low prices and massive advertising campaignsHowever, the sustained growth the platform had been experiencing has come to a screeching halt following the latest protectionist moves by the US government.
Until recently, Temu, like other Chinese companies in the sector such as Shein, benefited in the United States from a tariff exemption for small shipmentsThis legal loophole allowed products to be introduced at very competitive prices and facilitated the explosion of the so-called "everything for a hundred" digital market, with a endless supply of cheap items and fast deliveries. The recent elimination of this exemption and the implementation of tariffs of up to 145% have radically changed the competitive landscape.
From that moment on, Temu has had to pass on a large part of the new taxes to its American clients., in many cases doubling the final price of the products and losing one of their main distinguishing features: low cost. The effect on sales has not been long in coming. According to various reports, between May 11 and June 8, The company has seen its weekly revenue in the US reduced by more than a quarter., while competitors such as Shein, Walmart and Amazon have managed to maintain or improve their figures.
The advertising cut and the change in international focus
One of the clearest signs of this change of cycle has been the drastic reduction in advertising investment Temu's in the United States. The brand went from releasing thousands of ads a day to just a few, or sometimes none at all. Temu's initial success was closely linked to his massive media presence., so this strategic shift points directly to a forced readjustment in the face of the new tariff reality.
As the platform reduces its exposure in North America, Much of its resources are being redirected towards Europe, where the regulatory and logistical outlook is, for now, more favorable. This commitment to the European continent could determine Temu's future growth after the US slowdown..
In parallel, the company has also shown signs of wanting to adapt its business model to regulatory changes, announcing the transition to sales through local merchants in the United States, with distribution from domestic warehouses instead of direct imports from China. Although this strategy may help dodge new taxes, supply will likely be reduced and prices will no longer be as aggressive as before.
Fierce competition and adaptation in other markets
The case of Shein, another Chinese giant with a similar model, is revealing: after the initial blow, it has managed to resume growth in the US thanks to a more stable advertising policy and a diversification of its logistics chain. Temu, on the other hand, has opted to retreat and seek new opportunities outside the US market, especially in Europe and Latin America.
This reconfiguration of the sector coincides with an increase in regulatory pressure not only in the US, but also in other emerging countries such as Ecuador, where A fixed tariff has recently been imposed on small shipmentsTemu has responded by showing interest in investing in local logistics infrastructure and collaborating with authorities to strengthen traceability and combat illegal trade. Furthermore, the company has expressed its intention to integrate local producers into its operations, which could open up new avenues for economic development in the region.
Meanwhile Direct competition and regulatory challenges do not disappearPlatforms like Amazon and Walmart remain strong in the US, and new players like TikTokShop are beginning to gain ground, making the e-commerce sector increasingly dynamic and complex.
The e-commerce sector continues to face regulatory and market challenges that require platforms to constantly adapt. The need for diversification, both geographically and operationally, has become a priority to remain competitive in a rapidly evolving environment.