Shein, Temu to increase US prices next week after Trump’s tariffs, de minimis shift
In nearly identical statements, Shein and Temu said prices would increase following US policy changes expected to impact how they operate
Chinese-backed online retailers Shein and Temu have notified US consumers that they would raise prices starting April 25 “due to recent changes in global trade rules and tariffs”, as Chinese imports face significant tariff increases and the expiration of key exemptions.
The two platforms, known for offering budget-friendly goods sourced primarily from China, issued nearly identical statements on their US websites. Shein, founded by low-profile entrepreneur Sky Xu, and Temu, owned by PDD Holdings, founded by billionaire Colin Huang Zheng, both attributed the price hikes to rising operating costs.
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With the exception of a few words, the notices are nearly identical down to their structure and punctuation.
In its opening paragraph, Shein said, “Since we began serving US shoppers, our goal has been simple: to offer great fashion at affordable prices while creating a positive impact in the communities we serve.” Temu opened with the same paragraph, but replaced the word “fashion” with “product”.
The platforms are facing a shift in the US trade policy that could have significant implications for their businesses. The de minimis exemption, which has allowed packages valued at under US$800 to enter the US duty-free, will no longer apply to Chinese goods starting on May 2. This change, coupled with new tariffs of 145 per cent, is expected to impact the platforms’ cost structures. The White House has said taxes on certain goods could reach as high as 245 per cent.
Both companies are known for shipping small parcels directly from China to keep costs down.
Shein, founded in the eastern Chinese city of Nanjing, is now registered in Singapore and remains unlisted. Temu has claimed Boston as its global headquarters. It is operated by its Shanghai-based parent PDD Holdings, which in 2023 changed its “principal executive offices” address to a building in Dublin amid rising scrutiny of Chinese apps.
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While the two firms have sought to appear more international and diversify supply chains, the majority of their assets remain in China – the key to their cost advantage but also a vulnerability with exposure to US tariffs.
Temu has already drastically reduced online advertising in the US. Since April 12, the daily number of advertisements placed on Google by Temu’s main entity, WhaleCo, has plummeted to just 14, a sharp decline from between 30,000 and 60,000 from April 6 to 9, according to the Google Ads Transparency Centre. On sites operated by Meta Platforms – including Facebook, Instagram and WhatsApp – Temu ads had dwindled to four by Wednesday.
Despite this, both platforms have seen a surge in sales recently, likely driven by consumers looking to buy goods before the new tariffs take effect.
Shein recorded 29 per cent year-on-year revenue growth in March, which accelerated further to 38 per cent during the first 11 days of April, according to Bloomberg Second Measure, which analyses credit and debit card data. Temu’s sales grew 46 per cent and 60 per cent over the same periods.
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Suppliers are also grappling with new challenges from the tariffs. An apparel factory owner surnamed Xie, who sells to the US via Temu, said he was considering relocating his factory from Guangzhou, a first-tier city in China known as a manufacturing base, to a smaller city in the same province to cut costs.
While Xie’s business is struggling in the US, he said he was not ready to give up the market.
Read on original source: SCMP
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