Temu is touting extra of its so-called “native” merchandise after President Trump revoked a profitable commerce loophole that helped the Chinese language fast-fashion agency keep away from taxes and US customs.
On Thursday, the Chinese language-owned e-commerce website promoted objects that had a inexperienced “native” badge, that means they arrive from a US warehouse – boasting of offers beginning as little as $1.99 with ultra-fast delivery.
The majority of its “Lightning offers” part included these “native” objects, and the web site’s homepage promoted a particular “native warehouse” part.
Temu is making an attempt to pivot from its reliance on Chinese language retailers who ship direct to the US after President Trump imposed a ten% tariff on China, and killed the longtime “de minimis” exemption, which allowed sellers to ship packages value lower than $800 into the US duty-free.
The loophole helped Temu and fellow Chinese language fast-fashion big Shein develop massively in style within the US, since they may ship merchandise straight from China to US doorsteps and promote them at dirt-cheap costs — like $5 sneakers and $13 AirPod knockoffs.
Trump’s tariff and elimination of the de minimis rule may drive the Chinese language corporations to increase their costs and face main delivery delays at customs, consultants beforehand instructed The Submit.
So the Chinese language-owned agency has ramped up its promotion of sellers with stock in US warehouses in an try and keep away from the taxes and customs craze, CNBC earlier reported.
Temu didn’t instantly reply to a request for remark.
Together with getting purchases to US consumers faster, the strategic transfer may even assist cut back the corporate’s dependence on sellers who ship direct from China, in keeping with CNBC.
Although the “native” merchandise are saved in US warehouses, a lot of them are bought by companies based mostly in China, in keeping with the product listings.
By prioritizing its “native” merchandise, Temu units itself as much as extra straight compete with US rivals like Amazon, eBay and Walmart, which companion with Chinese language sellers who ship items to US warehouses.
These extra conventional retailers have taken discover of Temu and Shein, who emerged as stiff competitors over the previous few years, particularly because the Chinese language corporations took benefit of TikTok traits and churned out new merchandise rapidly.
Amazon final yr launched its personal low-price storefront, Haul, to compete with the 2 fast-fashion websites.
In the meantime, in March, Temu began onboarding sellers with stock in US warehouses in a preemptive measure as US lawmakers fought to stifle the Chinese language agency’s imports, in keeping with CNBC.
US lawmakers have accused Temu and Shein of abusing the de minimis rule.
Their exports soared to $66 billion in 2023, from $5.3 billion in 2018, in keeping with a report launched final week by the Congressional Analysis Service.
And a 2023 investigation by the Home choose committee discovered that Temu was probably delivery items made with pressured labor into the US on a “common foundation.”
By July 2024, about 20% of Temu’s US gross sales got here from sellers with US warehouses, not retailers based mostly in China, in keeping with e-commerce market analysis agency Market Pulse.
Shein has additionally been bringing on US patrons and sellers, in addition to opening distribution facilities in Illinois and California and a provide chain hub in Seattle.
As Temu and Shein this week feared further prices and delivery delays after the de minimis rollback, they have been thrown one other curveball when the United States Postal Service introduced a ban on inbound packages from China and Hong Kong, after which reversed the suspension lower than a day later.