Temu has reported a more than 25% drop in US sales between May 11 and June 8 compared to the same period last year.

This decline aligns with a major cut in the company’s US advertising.

Temu, once known for its aggressive ad spending including Super Bowl commercials, has now reduced its daily ad creation to single digits in June.

Some days saw no new ads at all, according to AppGrowing Global.

Industry analysts believe the reduced advertising has hurt Temu’s sales growth.

Wu Yanwei from YouCloud noted that Temu’s sales were closely linked to its aggressive ad strategy.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Cross-border e-commerce faces unprecedented policy headwinds

Temu’s 25% sales decline represents a dramatic market recalibration triggered by fundamental policy changes affecting the entire industry.

The elimination of the de minimis exemption, which previously allowed small parcels from China to enter the US duty-free, has fundamentally altered the economics for platforms relying on direct-from-China shipping models 1.

This policy shift coincides with broader tariff increases, forcing e-commerce players to adapt rapidly 2.

The impact extends beyond just Temu, with industry forecasts showing overall e-commerce growth projections dropping from 7.9% to as low as 1.8% in heavy-tariff scenarios 2.

Consumer behavior is shifting in response, with 63% of shoppers becoming more cautious about spending due to tariff-driven price increases, creating an especially challenging environment for platforms built entirely on price appeal 2.

2️⃣ Marketing investment directly correlates with market performance for value retailers

Temu’s drastic reduction in advertising—from thousands of new ads daily to single digits—highlights the direct relationship between marketing investment and sales for discount e-commerce platforms.

Recent Temu developments