If you are a Shein or Temu user and live in the United States, this article will interest you. Both companies are suffering the consequences of the trade war between China and the US.
The implementation of import tariffs by the Trump Administration has caused millions of dollars in losses to the two major e-commerce chains.
That is why they have decided to focus on Europe, where their sales have rebounded in the last year. According to the Financial Times, Sensor Tower data reveal that countries such as France, Spain and Germany have significantly increased the volume of users.
However, the growth in France could be temporary, as the Royal Decree on ultra-fast fashion, which aims to limit the activities of large foreign ultra-fast fashion operators, has been approved.
SHEIN and Temu
Both Chinese companies operate globally through e-commerce platforms. Shein was founded in 2008 by Chris Xu in Guangzhou, China. It is a company known for selling clothing of all kinds, accessories, furniture, home decor, cosmetics and many other products. It is one of the fast fashion companies with the widest reach, and is characterized by very affordable prices.
On the other hand, Temu, founded by Colin Huang in 2022, has a much smaller footprint. However, this online marketplace brand has managed to position itself on par with its main competitors in less time. Its catalog includes fashion, home, electronics and toys among many other products.
Trade war between China and the US
Since last April, Republican President Trump implemented a series of measures that included an increase in tariffs on products imported into the United States.
This tax has had economic consequences at the state and global level. In addition, Trump has been especially severe with his main competitor, China, to whom he has applied an even higher percentage than to the rest of the countries. This decision has generated a reactive response from the Asian giant, which has not stood idly by. This has been the main reason why companies such as SHEIN and Temu have experienced losses in the millions in the country.
Shein suffered a 12% drop in the total number of users making use of its platform, while Temu experienced a reduction of half of the monthly users between March and June, which amounted to 41.1 million. The drop in users and sales in the United States is not only related to the tariffs.
Both companies took the strategic decision to reduce their investment in advertising, as they understood that it did not make sense to do so in a country where tariffs are so high. Shein reduced by 69% and Temu by 87%. After this measure, both companies ceased to appear in the Top 60 of digital advertisers in the US.
SHEIN and Temu in Europe
Given the hostile situation in the U.S. market, both brands have decided to focus on the European market. The data reflect a rebound in their sales, as well as an increase in demand.
According to information provided by the Financial Times, Sensor Tower data shows that during the same period in which the United States reported losses, European countries such as Spain, France and Germany reported 71%, 76% and 64%, respectively. In addition, Shein’s monthly users experienced growth of between 13% and 20% in France, Germany and the United Kingdom.
What is happening with France?
The increase in data for France could be temporary. Recently, the Senate passed a law to protect domestic companies from the rise of Asian fast-fashion conglomerates. The country has decided to impose stricter and more rigorous measures on these companies in order to provide a commercial balance.
EEUU vs China
The United States has backtracked on the percentage of tariffs imposed on China. It has finally been reduced to 30%.
Both companies have tried to reduce the impact of these duties by implementing new measures. Temu now ships products from the US. However, 70% of the market belongs to the US, so Chinese companies do not see it as profitable.
