Daily US users of Chinese discount e-commerce platform Temu fell 58% in May following the White House’s elimination of the “de minimis” trade provision that allowed tariff-free shipping of low-value packages from China, according to market intelligence firm Sensor Tower.
The dramatic user decline reflects mounting challenges for PDD Holdings’ global platform amid escalating US-China trade tensions.
Temu responded to the policy change by slashing US advertising spending and restructuring its order fulfillment strategy after losing the competitive advantage that had enabled years of direct-to-consumer shipping from Chinese suppliers.
President Donald Trump’s sweeping trade tariffs have forced both Temu and rival fast-fashion platform Shein to raise prices, but Temu has struggled more significantly than its competitor.
While Shein has managed to increase average customer spending compared to a year ago, Temu has failed to maintain similar growth momentum, according to data from consultancy Bain & Company.
“While the tariff environment is uncertain, if the status quo remains for an extended period, we believe Temu’s competitive threat will continue to weaken,” Morgan Stanley equity analyst Simeon Gutman wrote in a May research note, citing significantly reduced engagement following the exemption’s end.
PDD Holdings’ first-quarter earnings fell short of growth estimates, with executives