Report: Temu Loses 58% of US Daily Users Due to Tariffs
Temu reportedly lost 58% of its eCommerce platform’s daily U.S. users in May after the U.S. ended the de minimis exemption on imported goods from China on May 2.
Reuters reported the drop Monday (June 2), citing data from market intelligence firm Sensor Tower.
Bain & Company also found that Temu’s rates of sales growth and customer growth dropped sharply after the announcement of new tariffs, according to the Reuters report.
Temu did not immediately reply to PYMNTS’ request for comment.
The de minimis exemption allowed packages worth less than $800 to enter the U.S. without paying a tariff.
The rule was commonly used by Chinese eCommerce retailers like Temu to sell goods at lower prices by shipping them directly to consumers in the U.S.
President Donald Trump announced his plans for the imposition of additional tariffs on imports from China on Feb. 1, saying he aims to halt the importation of illegal drugs.
It was reported Feb. 11 that Temu was overhauling its Chinese supply chain in response to the new U.S. tariffs, asking factories to ship their own goods in bulk to U.S. warehouses, employing what it refers to as a “half-custody” policy, in which it only manages its online marketplace. The change was expected to lead to higher prices.
After the company made this change, more than one-third of the products Temu sells to consumers in the U.S. are fulfilled with inventory maintained in the U.S. Temu has also responded to the uncertainty around tariffs by raising prices and by boosting its efforts to sell in countries other than the U.S.
On April 18, it was reported that Temu also significantly scaled back on paid advertising in the U.S., leading to an 80% downturn in paid search traffic. This cutback on ads was expected to push away customers and further destabilize the company’s price models.
Temu’s parent company, PDD Holdings, said in a Tuesday (May 27) earnings report that it saw a 38% year-over-year decline in profits in the first quarter due to tariffs and other factors.
PDD Holdings Chairman and Co-CEO Lei Chen said tariffs “created significant pressure for our merchants, who often lack the capability to adapt quickly and effectively.”
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