The Fast Fashion Shift: Shein and Temu Navigate Tariff Turbulence
May 6, 2025, 9:37 am
Location: Singapore
Employees: 10001+
Founded date: 2012
The landscape of fast fashion is shifting. Shein and Temu, two titans of the e-commerce world, are facing a storm. Tariffs imposed by the U.S. government have forced these companies to rethink their strategies. Once thriving on the de minimis rule, which allowed low-value shipments to enter the U.S. duty-free, they now find themselves in a tight spot. The end of this loophole has sent ripples through their business models, prompting a pivot towards Europe and local markets.
In April 2025, Shein and Temu ramped up their advertising efforts in the U.K. and France. The data from Sensor Tower reveals a significant increase in digital ad spending. Shein's investment surged by 35% in France and the U.K., while Temu's spending rose by 40% and 20%, respectively. This shift is a direct response to the U.S. tariffs that have made their once-popular low-cost offerings less appealing.
The de minimis rule, which allowed packages valued under $800 to enter the U.S. without tariffs, was a lifeline for these companies. It enabled them to sell items like $12 dresses and $5 accessories at prices that undercut traditional retailers. However, the recent ban on this exemption has forced them to raise prices and cut back on advertising in the U.S. market. The days of easy access to American consumers are over.
Shein and Temu are not just sitting back and watching their profits dwindle. They are adapting. The increase in advertising in Europe is part of a broader strategy to capture new markets. The U.K. and France are seen as fertile ground for growth. The rise in app downloads indicates that their efforts are paying off. Shein's downloads increased by 25% month-over-month, while Temu's more than doubled. Yet, despite these gains, the increase in daily active users has been modest. Shein's U.K. daily active users rose by only 5%, and Temu's by 10%. The challenge remains: how to convert downloads into loyal customers.
The shift to Europe is not the only change. Both companies are also looking to Brazil. Shein, which manufactures goods locally for Latin American markets, increased its digital ad spending there by a staggering 140% in April. Temu, too, is ramping up its presence in Brazil, with ad spending 800 times larger than the previous year. This aggressive strategy mirrors their earlier tactics when entering the U.S. market.
The end of the de minimis rule has forced Temu to halt direct shipments from China to U.S. customers. Products that once filled their site are now labeled as out of stock. Instead, they are pivoting to local sellers and U.S.-based warehouses. This shift is designed to mitigate the impact of tariffs. The new model promises "no import charges" and "no extra charges upon delivery," making it more appealing to American shoppers.
However, the price hikes are unavoidable. Temu has increased prices and added import charges ranging from 130% to 150% on products shipped directly from China. This has made many items prohibitively expensive, often costing more than the products themselves. Shein has also raised prices, incorporating tariffs into the final cost to avoid shocking customers at checkout.
The landscape is changing rapidly. The Trump administration's new tariffs are reshaping the fast-fashion industry. Critics argue that these tariffs protect American businesses, but they also threaten the low-cost model that Shein and Temu have built their brands on. The fallout from these policies is evident. The once-booming sales are now under pressure, and both companies must find a way to navigate this new reality.
As they adapt, the focus is on retaining existing customers while attracting new ones. Marketing experts suggest that Shein and Temu may struggle to gain new customers in the U.S. market. Their strategies now revolve around keeping the American shoppers they already have. The competition is fierce, with traditional retailers like Gap and Zara also vying for consumer attention.
The future remains uncertain. The fast-fashion giants are in a race against time. They must innovate and evolve to survive. The shift to Europe and local markets is a step in the right direction, but it may not be enough. The impact of tariffs is profound, and the landscape of e-commerce is changing.
In conclusion, Shein and Temu are at a crossroads. The end of the de minimis rule has forced them to rethink their strategies. They are shifting their focus to Europe and local markets, but the challenges are significant. Price hikes and competition from traditional retailers loom large. The fast-fashion industry is in flux, and only time will tell how these companies will adapt to the new normal. The journey ahead is fraught with obstacles, but with resilience and innovation, they may yet find a way to thrive in this turbulent environment.
In April 2025, Shein and Temu ramped up their advertising efforts in the U.K. and France. The data from Sensor Tower reveals a significant increase in digital ad spending. Shein's investment surged by 35% in France and the U.K., while Temu's spending rose by 40% and 20%, respectively. This shift is a direct response to the U.S. tariffs that have made their once-popular low-cost offerings less appealing.
The de minimis rule, which allowed packages valued under $800 to enter the U.S. without tariffs, was a lifeline for these companies. It enabled them to sell items like $12 dresses and $5 accessories at prices that undercut traditional retailers. However, the recent ban on this exemption has forced them to raise prices and cut back on advertising in the U.S. market. The days of easy access to American consumers are over.
Shein and Temu are not just sitting back and watching their profits dwindle. They are adapting. The increase in advertising in Europe is part of a broader strategy to capture new markets. The U.K. and France are seen as fertile ground for growth. The rise in app downloads indicates that their efforts are paying off. Shein's downloads increased by 25% month-over-month, while Temu's more than doubled. Yet, despite these gains, the increase in daily active users has been modest. Shein's U.K. daily active users rose by only 5%, and Temu's by 10%. The challenge remains: how to convert downloads into loyal customers.
The shift to Europe is not the only change. Both companies are also looking to Brazil. Shein, which manufactures goods locally for Latin American markets, increased its digital ad spending there by a staggering 140% in April. Temu, too, is ramping up its presence in Brazil, with ad spending 800 times larger than the previous year. This aggressive strategy mirrors their earlier tactics when entering the U.S. market.
The end of the de minimis rule has forced Temu to halt direct shipments from China to U.S. customers. Products that once filled their site are now labeled as out of stock. Instead, they are pivoting to local sellers and U.S.-based warehouses. This shift is designed to mitigate the impact of tariffs. The new model promises "no import charges" and "no extra charges upon delivery," making it more appealing to American shoppers.
However, the price hikes are unavoidable. Temu has increased prices and added import charges ranging from 130% to 150% on products shipped directly from China. This has made many items prohibitively expensive, often costing more than the products themselves. Shein has also raised prices, incorporating tariffs into the final cost to avoid shocking customers at checkout.
The landscape is changing rapidly. The Trump administration's new tariffs are reshaping the fast-fashion industry. Critics argue that these tariffs protect American businesses, but they also threaten the low-cost model that Shein and Temu have built their brands on. The fallout from these policies is evident. The once-booming sales are now under pressure, and both companies must find a way to navigate this new reality.
As they adapt, the focus is on retaining existing customers while attracting new ones. Marketing experts suggest that Shein and Temu may struggle to gain new customers in the U.S. market. Their strategies now revolve around keeping the American shoppers they already have. The competition is fierce, with traditional retailers like Gap and Zara also vying for consumer attention.
The future remains uncertain. The fast-fashion giants are in a race against time. They must innovate and evolve to survive. The shift to Europe and local markets is a step in the right direction, but it may not be enough. The impact of tariffs is profound, and the landscape of e-commerce is changing.
In conclusion, Shein and Temu are at a crossroads. The end of the de minimis rule has forced them to rethink their strategies. They are shifting their focus to Europe and local markets, but the challenges are significant. Price hikes and competition from traditional retailers loom large. The fast-fashion industry is in flux, and only time will tell how these companies will adapt to the new normal. The journey ahead is fraught with obstacles, but with resilience and innovation, they may yet find a way to thrive in this turbulent environment.