Target is considering a new strategy to ship products directly from factories to customers’ homes, mirroring the drop-shipping models used by Chinese e-commerce giants Temu and Shein, according to a report from Bloomberg News citing sources familiar with the matter.
The initiative, still in early development, would allow the retailer to expand its assortment of low-cost items, particularly apparel, household goods, and other non-food categories, as it looks to regain momentum amid slowing sales, rising competition, and economic uncertainty tied to new tariffs.
The approach would mark a significant shift for the Minneapolis-based retailer, which is looking to offer more competitively priced and fresh merchandise to appeal to budget-conscious consumers.
Retailers like Temu, owned by PDD Holdings, and Shein previously gained traction in the US by shipping goods directly to consumers under the now-revoked ‘de minimis’ exemption, which allowed low-value imports under $800 to bypass tariffs and customs duties.
That advantage was eliminated on May 2 when the Trump administration ended duty-free treatment for shipments from China and Hong Kong, contributing to a sharp drop in Temu’s US user numbers last month.
Target’s exploration of this model comes as traditional retailers reassess logistics and pricing strategies in response to shifting consumer behaviour and evolving trade rules.
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