U.S. Shipping: Temu's Clarification Implying Products Originate Elsewhere
A Shift in E-Commerce: Temu's New Strategy
Just a few hours after the US tariff exemption for Chinese imports ceased, Temu, a popular e-commerce site, announced a significant change in its shipping strategy. The platform confirmed that all US sales will now be handled by locally based sellers, with orders fulfilled from within the country.
"We're now dealing with sales in the US through locally based sellers, with orders fulfilled domestically," a Temu spokesperson said in a statement on Friday. "Temu has been actively recruiting US sellers to join the platform."
This significant change marks a departure from the norm for Temu, as well as other Chinese e-commerce sites like Shein and AliExpress, which had previously leveraged the de minimis exemption to flood the US market with ultra-low-cost goods. However, with President Trump imposing heavy tariffs on all Chinese imports, the mountain of cheap goods from these sites could become less accessible to millions of Americans.
The de minimis loophole allowed shipments of goods worth $800 or less to enter the United States duty-free, often skipping time-consuming inspections and paperwork. Chinese e-commerce sites often took full advantage of this exemption, showering the US market with rock-bottom prices. But now, with Trump's punishing tariffs on all Chinese imports, those low-cost goods could soon feel out of reach for many US consumers.
The vast majority of Shein and Temu products are manufactured in China and imported directly to the US, which is why the prices are so low. However, Temu's new approach may sound appealing to Trump, but simply shipping products from a "local warehouse" doesn't necessarily mean they're made in America.
Sites like Temu and Shein have been building up their US warehouse portfolio for years to lower shipping times. Last year, the Biden administration also spearheaded criticism of the de minimis exemption, with Chinese shippers sensing a clear shift in the air.
Shein began stockpiling goods, bulk shipping them to US warehouses as early as last year, according to Chris Tang, a professor of global supply chain management at the University of California, Los Angeles. Bloomberg reported in February that Temu began overhauling its Chinese supply chain, asking supplier factories to ship items in bulk to US warehouses.
However, when those items run out, it remains unclear if they will be replaced with new items, subject to the tariffs Trump has placed on China. For now, foreign-made products are arriving on Americans' doorsteps through US distributors. Temu does not publicly list its manufacturer partners.
If there are shortages, Tang said, Temu has few options. The company could re-order its products, which would take time and money. The site could begin to offer "substitutes," or recommendations of similar products in stock. Some users on social media platforms like Reddit have already reported items going out of stock and additional fees being applied for orders that fall below a certain total amount.
Last week, there were signs that Temu may have begun raising prices due to the new tariffs. However, the company refuted this claim, stating that prices for US consumers remain unchanged during the transition.
Temu appears to have begun offering items marked as "local" to emphasize faster delivery and avoid cross-border tariffs. The platform is actively recruiting US sellers to sustain inventory levels. Customers on social media have reported issues with stock availability and additional fees for orders that fall below a certain total amount. Some items are not available locally, with users experiencing a dramatic reduction in the number of items in their carts. Overall, the shift to local fulfillment could reshape the e-commerce industry, as rivals like Shein and AliExpress face identical tariff constraints.
- Temu's new strategy to handle US sales, with orders fulfilled domestically, might become challenging as locally available items may not evade the tariffs Trump imposed on China.
- Financing the shift to local sellers and finding domestically manufactured products to stock their shelves could pose a challenge for Temu, hence the active recruitment of US sellers to sustain inventory levels.
- Technology plays a crucial role in Temu's new strategy, as they have been building up their US warehouse portfolio for years to lower shipping times, packing goods in bulk, and restructuring their Chinese supply chain.
- In the era of increasing tariffs and trade restrictions, business strategies in the e-commerce industry may undergo significant changes, with companies like Temu, Shein, and AliExpress turning to local fulfillment and recruiting domestic sellers to keep up with market demands.
