Temu vs. Shein: The Price War for the US Market After Tariffs Trade

Temu has significantly lowered prices on its best-selling items in the U.S. in an attempt to regain market share. A recent report by Bloomberg indicates that the average price of over 20 popular products on the e-commerce platform dropped by roughly 18% in early September compared to late April. This is when the "de minimis" rule, which previously allowed goods valued under $800 to be imported duty-free from China, was still in effect. Certain products experienced even steeper discounts, with prices dropping as much as 60%.

The company had temporarily withdrawn from the U.S. market after the duty-free policy was eliminated, which led to a substantial drop in sales. According to data from Bloomberg Second Measure, Temu's U.S. sales plummeted by over 30% in some weeks in June and continued to fall by more than 10% in both July and August.

To attract customers back, Temu has not only lowered prices but also stopped charging import fees that had previously inflated costs. The company is also encouraging sellers to lower their prices in exchange for increased visibility on the app and is urging them to import more products for the upcoming holiday shopping season.

Furthermore, Temu has ramped up its advertising efforts after a significant reduction in the second quarter, although its current ad volume is still below its peak. Despite these initiatives, the company's growth remains fragile, with some Chinese retailers reporting continued sales declines. For many sellers who operate on multiple platforms, Temu is currently their lowest-performing channel.

In a move to strengthen its infrastructure, Temu is partnering with third-party logistics companies to build a comprehensive network that includes shipping from China, warehousing, and last-mile delivery. This is seen as a way to support merchants who lack their own logistics solutions. These efforts come as Temu's primary competitor, Shein, has seen its sales rebound in the U.S. despite raising its prices, increasing the pressure on Temu to re-establish itself in the American market.