Temu’s US daily users drop 58% after China import policy shift

Temu, a global discount ecommerce platform owned by PDD Holdings, saw a 58% drop in daily United States users in May, according to market intelligence firm Sensor Tower.

This decline follows the US government’s policy change that eliminated tariff exemptions for low-value packages shipped from China.

The US ended the “de minimis” rule on May 2, 2025 which previously allowed Chinese companies to ship goods tariff-free.

Temu and competitor Shein had depended on this provision to provide low-cost products to American consumers.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ E-commerce platforms show varying resilience to tariff pressures

Temu and Shein demonstrate how business models significantly impact a company’s ability to weather trade barriers, despite similar market positioning.

While both companies faced sales growth declines after tariff implementation, Shein managed to increase per-customer spending compared to a year ago, while Temu saw deeper user and engagement drops 1.

The 58% drop in Temu’s daily U.S. users in May represents one of the most dramatic examples of how tariffs can rapidly reshape competitive dynamics in cost-sensitive retail segments.

Morgan Stanley’s analysis suggests Temu’s competitive threat will continue to weaken if current tariff conditions persist, showing how trade policies can rapidly alter e-commerce competitive landscapes 2.

2️⃣ Chinese e-commerce giants pivot to emerging markets as U.S. barriers rise

Temu’s strategy shift reveals how Chinese platforms are rapidly adapting their global expansion plans in response to trade barriers.

Non-U.S. users now comprise 90% of Temu’s 405 million global monthly active users, with HSBC noting that “new user uptick grew swiftest in less affluent markets” 3.

This geographic diversification strategy shows Temu’s attempt to maintain growth momentum despite significant U.S. headwinds, following a pattern seen during previous trade tensions when Chinese tech companies redirected resources to alternative markets.

PDD’s earnings call remarks about “working with merchants across regions” confirms this deliberate strategic shift away from U.S. market dependence toward a more distributed global presence 4.