Temu rebuilds business model due to Trump’s pressure
2 May 22:15
Temu, a Chinese online marketplace that has rapidly gained popularity in the United States thanks to cheap goods from China, is currently radically changing its business model. This was reported by "Komersant Ukrainian" with reference to the New York Post.
This is due to the decision of the Donald Trump administration to close the “de minimis” tax loophole, which allowed duty-free import of goods worth up to $800.
Starting from May 2, 2025, all goods imported from China will be subject to a duty of up to 145% or a flat fee of up to $200 per parcel.
Key changes in Temu’s business model
1. Abandonment of direct deliveries from China.
Temu no longer offers products that are shipped directly from China. Instead, the company is focusing on products stored in warehouses in the United States or on goods from American sellers.
2. Introduction of import duties
For products that are still sourced from China, Temu has introduced additional import fees that can reach 130-150% of the cost of the product. For example, a dress that used to cost $18.47 will now cost $44.68 due to an additional $26.21 in import costs.
3. Engaging local sellers
Temu is actively recruiting American sellers to list their products on the platform to reduce dependence on Chinese suppliers and avoid new customs restrictions.
4. Reducing advertising costs
In response to the new trade restrictions, Temu has reduced its advertising spending in the US, particularly on Meta (Facebook, Instagram) and Google platforms. This may affect brand visibility and attract new customers.
Consequences for consumers
Price increases. Due to new duties and import fees, prices for many products have increased, which may reduce the attractiveness of the platform for budget shoppers.
Limited assortment. Refusal to supply directly from China may lead to a reduction in the range of goods, especially unique or niche products.
Refocusing on local products. Involvement of American sellers can improve delivery times and support local businesses, but it can also affect the platform’s pricing policy.
Outlook
Temu is trying to adapt to the new environment by focusing on the local market and changing its business model. However, these changes may affect the platform’s competitiveness, especially in comparison to other market players such as Amazon or Walmart.
Temu’s continued success will depend on its ability to effectively integrate local sellers and maintain attractive prices for consumers.
