Temu, the new e-commerce darling also owned by Chinese behemoth PDD Holdings, is throwing a bomb into the whole shipping game. This announcement follows the expiration of the de minimus tariff loophole. This alteration comes after the de minimis rule, which allowed items valued at $800 or less to enter the United States duty-free, officially ended on Friday at 12:01 a.m. EDT.
In reaction to this change, Temu has ceased providing items delivered from China in its shipments. The company should communicate more clearly on its website and app that these items are sold out. They require consumers to know about this change. Instead, Temu is focusing on promoting local products from U.S.-based warehouses, advertising that they incur “no import charges” and “no extra charges upon delivery.”
It’s clear over the last year Temu has been aggressively establishing its domestic inventory in the U.S. They’ve been working to recruit more U.S. based sellers to their platform. A representative from Temu pointed to a broader strategic transformation at the platform. They proclaimed, “Temu has been aggressively onboarding U.S. sellers to list their products on Temu’s platform. This welcome action protects consumers’ pocketbooks by ensuring that prices stay competitive for the American shopper. Most importantly, it removes consumers’ fear of surprise duties on their imports.
Even with these changes, Temu still promises that U.S. consumers can expect “no change” in prices. Until now, shoppers hunting for extreme bargains nearly always found them on Temu, which sold $5 sneakers and $1.50 garlic presses. Prior to the change, many customers were hit with high “import fees.” These charges were sometimes between 130% and 150% when they attempted to purchase goods which were to be shipped from China.
With the de minimis loophole now closed, e-commerce companies have had to adjust their strategies. Temu and its fellow competitor Amazon Haul are in the process of responding to these developments. Amazon Haul just used a simple rule of thumb. This enabled them to ship these dollar store-type goods costing $20 or lower directly from China. The new regulations are forcing both tech companies to change their business models. They are busting their tails to try to react to today’s trade environment.
Temu’s recent adjustments are just one example of a larger trade industry trend as companies continue to test out new tariffs and permutations of trade policies with China. Shein, the online retailer that flourished under the de minimis rule, announced price hikes just yesterday. They’re setting themselves up for future battles in a rapidly evolving market.
Temu is already moving towards a model with an emphasis on inventory based in the U.S. It’s still focused on providing an amazing brick-and-mortar shopping experience to its customers. The firm has doubled down on its promise of “no import duties” and “no delivery fees.”
Leave a Reply