On Friday, April 25th, the “cheap goods” sold on the Chinese fast-fashion e-commerce platforms Temu and Shein are no longer as inexpensive as they were 24 hours ago. These two companies have raised the prices of many products before the new tariffs on small packages take effect next week.
Most of the products sold by Temu and Shein are from China, and due to the tariff exemption for goods valued at less than $800, American customers can basically avoid paying tariffs. This policy, known as “De Minimis,” will expire on May 2nd. At that time, businesses may have to pay a 120% tariff or a fixed fee of $100 per package. Starting from June 1st, the fixed fee will increase to $200.
According to CNN, a pair of patio chairs on the Temu platform was priced at $61.72 on Thursday, and by Friday, the price had risen to $70.17. On the Shein platform, CNN found a swimsuit set priced at $4.39 on Thursday, which increased to $8.39 on Friday, a 91% increase.
Both companies had informed consumers last week about the upcoming price increase.
On their websites, both companies encouraged customers to place orders before April 25th to avoid paying higher prices. However, it is currently unclear whether buyers who have orders delivered after May 2nd can avoid paying the 120% tariff.
Not only Temu and Shein, but TikTok also stated that prices of “affected products” sold on the video-sharing platform would increase starting on Sunday, and AliExpress also mentioned that certain merchants would raise prices on some products. Additionally, AliExpress noted that due to the “uncertainty of customs clearance processes,” there may be delivery delays.
All platforms have not provided specific details on the extent of the price increases and which products will be affected.
Utilizing the “De Minimis” policy has been a cornerstone of the ultra-low-cost business model adopted by many Chinese platforms targeting American consumers.
Sky Canaves, Chief Analyst of Retail and E-commerce at the market research firm Emarketer, stated to Nikkei Asia News, “Ultra-low prices have always been the main draw for platforms like Temu and Shein, and many customers are not willing to pay more than double the current prices.”
According to Nikkei Asia News, retail intelligence platform Sensor Tower found that from April 8th to 21st, compared to the previous two weeks, Temu, Shein, and AliExpress reduced their advertising spending by 90%, 50%, and 30% respectively. During the same period, Temu’s downloads in the U.S. decreased by 65%, Shein by 35%, and AliExpress by 25%.
In some cases, Chinese platforms sell products through a consignment model, allowing them to set their own prices. Another approach is “semi-consignment,” where some sellers set their own prices. Some individual merchants on Temu told Nikkei Asia News that they are happy they can finally raise prices, as the platform had previously prohibited them from doing so.
Multiple executives from Chinese e-commerce companies told Nikkei Asia that the trade war would naturally have a short-term impact on their business. However, the long-term outlook is highly uncertain, as it largely depends on whether U.S. importers can source goods from other countries.
Retail giants like Walmart are considered better equipped to find alternative solutions, as they have diversified supply chains and stronger bargaining power with suppliers. On the other hand, small businesses that rely heavily on sourcing from China will face intense competition in finding alternative suppliers, according to Sky Canaves of Emarketer.