Temu cuts US prices by up to 60% in battle with Shein

Temu has lowered prices on many of its best-selling products in the US as it seeks to regain market share from rival Shein after recent tariff changes.

Temu is an ecommerce platform owned by China’s PDD Holdings.

Bloomberg data shows that prices for at least 25 tracked items dropped by an average of 18% in early September compared to late April, with some discounts reaching up to 60%.

The company had previously pulled back from the US market following the removal of the “de minimis” tariff exemption, which had allowed duty-free imports of small parcels.

Temu’s US sales fell by more than 30% during some weeks in June, and continued to drop by over 10% in July and August, according to Bloomberg Second Measure.

The platform has also stopped charging import fees to US buyers and increased ad activity, though marketing activity remains below the levels seen before the tariff changes.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Tariff policy changes forced fundamental business model restructuring for Chinese e-commerce platforms

Temu’s dramatic sales decline, dropping more than 30% during some weeks in June and continuing to fall over 10% in July and August, demonstrates how the removal of the de minimis tariff exemption disrupted the core economics of Chinese e-commerce platforms 1.
The platform’s business model relied heavily on the ability to ship goods under $800 duty-free to the US, with manufacturers competing in reverse auctions to offer the lowest prices while operating on a consignment model that minimized Temu’s financial risk 2.
Temu’s response of cutting prices by an average of 18% across best-selling items and eliminating import fees shows the company is absorbing significant costs to maintain market position 1.
This pattern mirrors broader industry disruption, as both Temu and Shein saw declines of over 20% and 10% respectively following tariff announcements, while Amazon’s women’s clothing category grew over 26% as consumers shifted to domestic alternatives 3.

Trade disputes create cascading operational challenges beyond direct tariff costs

Temu’s pivot to building comprehensive logistics networks—from cross-border shipments to warehouse storage and last-mile delivery—reveals how tariff changes force complete supply chain restructuring rather than simple price adjustments 1.
The broader impact includes reduced shipping volumes that increase transportation costs for all companies, while US importing firms face significantly higher customs bond requirements, compounding the financial pressure beyond just tariff rates 4.
These second-order effects explain why Temu initially retreated from the US market entirely, pivoting to Europe and other regions where their original business model remained viable 1.
The company’s shift from asking merchants to handle their own US warehousing to providing integrated logistics services demonstrates how trade policy forces platforms to vertically integrate operations they previously outsourced 1.