Temu, a popular Chinese online marketplace, has had a rough year. In January, President Donald Trump raised eyebrows when he announced tariffs (taxes companies pay to import goods from overseas) on multiple countries. At the time, China faced the highest tariff rates.
He also removed a trade rule called “de minimis” that allowed goods less than $800 from China to enter the U.S. duty-free with minimal inspections.
In April, Trump later announced higher tariffs on China and other countries, and Temu went into panic mode.
Shortly after the announcement, Temu, which became popular for selling products priced between $1 and $50, warned customers on its website that it would raise prices due to “global trade rules and tariffs” increasing its operating expenses.
Temu also added “import charges” of about 145% to multiple products it sells, which sometimes doubled the price of an order. This generated outrage from customers who grew frustrated with paying higher prices.
Image source: Raul Ariano/Bloomberg via Getty Images
Temu app downloads later decreased as it quietly scaled back its advertising on Google and Meta platforms such as Instagram and Facebook.
In May, to win back customers, Temu decided to stop shipping products from China to sell directly to consumers in the U.S. It pivoted to selling items from local U.S. warehouses to U.S. consumers, flagging on its website that items shipped from these locations would not incur extra charges.
Temu makes major changes to lure back shoppers
Now, Temu has made another bold move to attract shoppers back to its website. The online retailer has dropped product prices by 18% on average earlier this month, compared to prices in April, according to a recent report from Bloomberg.
Some Temu items have even decreased in price by as much as 60%.
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In addition, the retailer has increased its advertising in the U.S. According to data from Appgrowing Global, the number of new Temu ads per day has spiked to a few thousand or over 10,000 on some days after dipping to just a few dozen or less most days in the second quarter.
Temu has also ceased charging buyers import fees, which previously caused prices to skyrocket on its website.
The retailer’s lower prices comes during a time when it is reportedly grappling with making its prices cheaper than its top rival Amazon, which currently dominates the e-commerce market.
Temu is suffering from an alarming consumer trend
The move from Temu also comes after its U.S. sales shrank by more than 30% during a few weeks in June and continued to decline by over 10% in July and August, according to data from Bloomberg Second Measure.
Temu appears to be in the crosshairs of a growing consumer trend that is most likely impacting sales.
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A recent survey from Omnisend found that 68% of Americans have avoided purchasing from Chinese marketplaces like Temu and Shein after the end of the de minimis rule. Price increases were the top reason Americans made this drastic change.
Also, 30% of Americans said they noticed higher prices on Temu, and 43% said they would pay more for goods made in the U.S.
“De minimis once let small packages under $800 enter the U.S. duty-free, and platforms like Temu and Shein built their low-price models around it,” said Marty Bauer, ecommerce expert at Omnisend, in a press release. “When that break ended for China, their biggest advantage vanished overnight. Temu paused U.S. ad campaigns for a few months and blocked shoppers from seeing China-shipped items. With fewer listings and higher prices, shoppers started looking elsewhere.”
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