Temu, the discount e-commerce platform owned by PDD Holdings, has experienced a significant decline in its US user base following the termination of the “de minimis” rule on May 2, 2025.
This rule previously allowed Chinese companies to ship low-value goods to the US without incurring tariffs.
According to data from Sensor Tower, Temu’s daily US users dropped by 58% in May, highlighting the impact of the policy change.
In response to the new tariffs, Temu has reduced its US advertising expenditure and overhauled its fulfillment strategy.
The company is now encouraging merchants to ship products in bulk to US-based warehouses, a shift from its previous model of direct shipping from China.
Despite these efforts, the increased costs associated with tariffs and customs have made it challenging for Temu to maintain its competitive pricing, leading to a decline in user engagement.
While Temu faces challenges in the US market, it is experiencing growth in other regions.
Non-US. users now constitute 90% of Temu’s global monthly active users, with significant upticks in less affluent markets.
This situation underscores the broader implications of the end of the de minimis provision, which has affected various retailers relying on low-cost imports.
For instance, companies like Shein have also had to adjust their strategies in response to the new trade environment.
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