- Temu slashes US ad spend by 31% and Shein by 19% as new tariffs loom.
- De minimis loophole ends 2 May, threatening ultra-low-cost shipping from China.
What happened: E-commerce platforms react to US crackdown on duty-free imports with major ad pullback
Temu and Shein, two of the biggest Chinese fast-fashion and discount e-commerce platforms, have sharply reduced their digital advertising in the United States in response to imminent changes to US trade policy. According to data from Sensor Tower, Temu cut its average daily ad spend by 31% from 31 March to 13 April, while Shein reduced its spending by 19% over the same period. Temu’s cuts were most visible on platforms such as Google Shopping and Facebook, while Shein scaled back on Facebook, Instagram and TikTok.
The move comes just weeks before the US ends the “de minimis” tariff exemption for shipments valued under $800 from China and Hong Kong. Set to take effect on 2 May, the policy shift will expose millions of low-value shipments to import duties for the first time. Temu, owned by PDD Holdings, and Shein, backed by several global investors, have warned of upcoming price hikes.
Also read: Tariff pause for allies, China faces sharp hike
Also read: Stocks plummet as markets react to Trump’s escalating tariff crisis
Why it is important
This marks a critical moment for Chinese e-commerce players reliant on aggressive US expansion. By slashing digital ad spend, Temu and Shein are reacting to rising operational costs and signalling a potential shift in growth strategy. These companies have relied heavily on low-cost cross-border logistics and viral digital marketing to acquire US customers. Without the de minimis exemption, their key competitive advantage—ultra-cheap, direct-to-consumer shipping—is eroding.
The advertising pullback also poses a risk to platforms like Meta, Snap, and Google, which have benefited from Temu and Shein’s massive ad budgets. As Bloomberg reported, Temu alone spent more than $2 billion on US ads in 2023, with Meta and Alphabet among the biggest beneficiaries.
The change could boost domestic US retailers and manufacturers in the long term by levelling the playing field. However, the move may increase prices for consumers accustomed to cut-price online fashion and gadgets. This could reshape retail and test brand loyalty in a post-de minimis world.
