The administration of US President Donald Trump’s move to stop low-cost imports entering the US tariff-free is likely to hit fast fashion retailer Shein harder than online dollar-store Temu, thanks to Temu’s wider product range and moves to change its shipping strategy.
Both sites grew exponentially in the US in recent years helped by the so-called de minimis rule, a measure that exempted shipments worth less than US$800 from import duties. A June 2023 report estimated the Chinese retailers accounted for more than 30 percent of all packages shipped to US each day under the rule.
The rule began to come under scrutiny during the administration of former US president Joe Biden prompting both firms to start making preparations to rely less on it, but Temu made changes to its model faster, analysts and sellers said. Temu is owned by PDD Holdings while Shein is aiming to list in London in the first half of the year.
Tech analyst Rui Ma (馬睿) said Temu “rapidly expanded its semi-managed model” as part of its groundwork, an Amazon-like strategy that sees goods shipped in bulk to overseas warehouses instead of directly to customers.
Within months of first bidding to attract sellers keeping inventory in US warehouses in March last year, about 20 percent of Temu’s US sales were shipped from local sellers rather than directly from China, according to estimates from e-commerce market research firm Marketplace Pulse.
Two China-based Temu sellers said that by the end of last year, half the products they sold to the US were sent to warehouses there first.
Temu has also been increasing the proportion of goods it sends by sea. Basile Ricard, operations director at Ceva Logistics Greater China, said an increase in Temu ocean-freighting more goods in bulk — and larger, more valuable goods, such as furniture — was apparent in the “second half” of last year, reducing importing under the de minimis threshold.
In contrast, Shein remains more reliant on air freight to directly ship the thousands of styles of ultra-fast fashion items it pumps out each week, Ricard said, although it has opened centers in states including Illinois and California, as well as a supply chain hub in Seattle.
“I think it’s important to separate Shein from the rest of the e-commerce players because their business is based on speed of supplying new styles and they have to remain very reactive to trends, so speed is a bigger part of their business,” he said.
The vast majority of Shein’s products are still made in China, but it has also started to diversify its supply chain. For example, adding suppliers in Brazil and Turkey, a move that might also accelerate in the wake of new tariffs and regulations.
Temu and Shein did not respond to requests for comment.
Trump’s executive order this week plunged the express shipping industry into confusion with the US Postal Service on Wednesday reversing a decision not to accept parcels from China and Hong Kong it had announced just 12 hours before.
Nomura analysts estimate that the volume of de minimis shipments to the US could plummet by 60 percent, as US shoppers ordering from Shein, Temu and Amazon Haul face higher prices.
About 1.36 billion shipments entered the US using the de minimis provision last year, 36 percent more than in 2023, US Customs and Border Protection data showed.
However, Ma said that she expected Shein and Temu to be able to adapt quickly, given the agility of China’s e-commerce firms and their supply chains.
“I think there will be real impact, especially in the short term, but it is not catastrophic,” Ma said.
“China has the most competitive e-commerce operators and the most advanced supply chain. Short of a total ban or something crazy like that, I think they will be able to figure it out,” she added.
As strategic tensions escalate across the vast Indo-Pacific region, Taiwan has emerged as more than a potential flashpoint. It is the fulcrum upon which the credibility of the evolving American-led strategy of integrated deterrence now rests. How the US and regional powers like Japan respond to Taiwan’s defense, and how credible the deterrent against Chinese aggression proves to be, will profoundly shape the Indo-Pacific security architecture for years to come. A successful defense of Taiwan through strengthened deterrence in the Indo-Pacific would enhance the credibility of the US-led alliance system and underpin America’s global preeminence, while a failure of integrated deterrence would
It is being said every second day: The ongoing recall campaign in Taiwan — where citizens are trying to collect enough signatures to trigger re-elections for a number of Chinese Nationalist Party (KMT) legislators — is orchestrated by the Democratic Progressive Party (DPP), or even President William Lai (賴清德) himself. The KMT makes the claim, and foreign media and analysts repeat it. However, they never show any proof — because there is not any. It is alarming how easily academics, journalists and experts toss around claims that amount to accusing a democratic government of conspiracy — without a shred of evidence. These
The Executive Yuan recently revised a page of its Web site on ethnic groups in Taiwan, replacing the term “Han” (漢族) with “the rest of the population.” The page, which was updated on March 24, describes the composition of Taiwan’s registered households as indigenous (2.5 percent), foreign origin (1.2 percent) and the rest of the population (96.2 percent). The change was picked up by a social media user and amplified by local media, sparking heated discussion over the weekend. The pan-blue and pro-China camp called it a politically motivated desinicization attempt to obscure the Han Chinese ethnicity of most Taiwanese.
On Wednesday last week, the Rossiyskaya Gazeta published an article by Chinese President Xi Jinping (習近平) asserting the People’s Republic of China’s (PRC) territorial claim over Taiwan effective 1945, predicated upon instruments such as the 1943 Cairo Declaration and the 1945 Potsdam Proclamation. The article further contended that this de jure and de facto status was subsequently reaffirmed by UN General Assembly Resolution 2758 of 1971. The Ministry of Foreign Affairs promptly issued a statement categorically repudiating these assertions. In addition to the reasons put forward by the ministry, I believe that China’s assertions are open to questions in international
RSS