Chinese ecommerce platforms Temu and Shein are seeing a decline in user engagement in the US.

This follows the end of the de minimis trade exemption and new tariffs on Chinese imports.

Temu’s US daily active users (DAUs) dropped 52% in May compared to March, while Shein’s fell 25%.

Monthly active users (MAUs) also declined, Temu by 30% and Shein by 12%.

App Store rankings dropped as well, with Temu falling to an average rank of 132 in May, down from top 3 last year. Shein dropped to rank 60 from its previous top 10.

The drop comes alongside a sharp cut in US ad spending. Temu’s ad spend in May fell 95% year-on-year, and Shein’s dropped 70%, according to Sensor Tower.

.source-ref{font-size:0.85em;color:#666;display:block;margin-top:1em;}a.ask-tia-citation-link:hover{color:#11628d !important;background:#e9f6f5 !important;border-color:#11628d !important;text-decoration:none !important;}@media only screen and (min-width:768px){a.ask-tia-citation-link{font-size:11px !important;}}

🔗 Source: CNBC

🧠 Food for thought

1️⃣ De minimis closure marks turning point in U.S.-China e-commerce relations

The dramatic decline in Temu and Shein’s U.S. user numbers highlights how critical the de minimis exemption was to their business model.

This trade provision, which allowed packages valued under $800 to enter the U.S. duty-free, enabled Chinese ultra-low-cost retailers to ship directly to American consumers without the tariffs that traditional retailers face 1.

The immediate impact has been severe, with Temu’s daily active users dropping 52% and Shein’s falling 25% between March and May 2025, coinciding with the exemption’s closure 1.

Both companies have dramatically reduced U.S. advertising in response, with Temu cutting ad spend by 95% year-over-year and Shein by 70%, reflecting diminished growth prospects in what was previously their most lucrative Western market 2.

The 54% tariff now applied to these previously exempt imports fundamentally challenges these platforms’ ability to maintain their ultra-low pricing, with research suggesting that a 50% tariff is the threshold at which Temu loses most of its price advantages 1.

This policy shift effectively levels the playing field for U.S.-based retailers who have long complained about what they considered an unfair advantage for Chinese direct-to-consumer platforms.

2️⃣ Chinese e-commerce giants pivot to Europe amid U.S. headwinds

As U.S. tariffs reshape their business prospects, both Temu and Shein are executing a rapid geographic diversification strategy focused primarily on Europe and Latin America.

Concrete evidence of this strategic shift appears in their advertising patterns, with Shein increasing ad spending in France by 45% and the UK by 100%, while Temu boosted spending in these markets by 20% and 40% respectively 3.

The European push is yielding results, with Shein’s app downloads in these markets increasing by 25% and Temu’s more than doubling, though daily active user growth remains more modest 3.

Latin America has emerged as another key growth region, with Shein increasing its advertising spend in Brazil by 140%, suggesting the company sees significant potential in emerging markets 4.

This international diversification has already transformed Temu’s user base, with non-U.S. users now accounting for 90% of the platform’s 405 million global monthly active users, particularly in Europe and Latin America 1.

The speed of this geographic pivot demonstrates how Chinese e-commerce platforms can rapidly reallocate resources when faced with regulatory challenges, potentially allowing them to maintain growth trajectories even as their U.S. operations contract.

Recent Shein developments

……