Attention Taiwan cross-border sellers! You would never guess that the once popular Temu and Shein are now plummeting in the US app store rankings! With the suspension of the minimum tax exemption on May 2, Temu has plummeted from #3 to #85 and Shein from #7 to #80 in just two weeks. I really don't know if this is good or bad for Taiwanese manufacturers, but it's definitely the first real market correction facing China's direct mail shopping revolution.
Demand hasn't disappeared, as evidenced by a surge in the rankings of other Chinese apps. The decline actually represents a strategic ceding of U.S. market share by the two major e-commerce platforms, as they are cutting back on ad spend that would otherwise be used to support rankings and downloads. For example, according to Reuters, Temu's average daily U.S. ad spend in early April was down 311 TP3T from March, while Shein's was down 191 TP3T.
What's even more eye-opening is that of the nearly 30,000 ads for Temu in Meta's ad inventory, only a handful are still active in the United States! This is an inevitable market correction for a business model based on regulatory arbitrage. When the minimum tax exemption was expanded from $200 to $800 in 2016, it set the stage for Temu, Shein, and later Amazon Haul.
By announcing price increases at almost the same time, starting April 25, both companies are effectively admitting that their ultra-low-price model won't survive the reality of upcoming tariffs. By losing their lowest duty-free advantage, they will face the same tariffs that U.S. retailers have endured for years. For cross-border e-commerce sellers, this means the competitive landscape could change dramatically.
After all, specific platforms may rise and fall, but demand for low-cost Chinese goods remains strong among US consumers. While Temu and Shein have temporarily retreated, other Chinese shopping platforms such as DHgate briefly surged to the No. 2 spot on the U.S. App Store last week, largely thanks to viral videos of Chinese manufacturers exposing luxury brand markups on TikTok.
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# Cross-border E-commerce # Amazon Sellers # Taiwan Manufacturers # Tariff Policy # Market Share # E-commerce Platforms # Cross-border Overseas # U.S. Markets
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