Do you know why? With the minimum tax exemption set to be suspended on May 2, Temu and Shein are rapidly losing their dominance in the U.S. App Store. Temu plummeted from #3 to #85 in just two weeks, and Shein dropped from #7 to #80 - a clear sign that the revolution of shopping directly from China is facing its first real market correction. is facing its first real market correction.
Demand hasn't disappeared - as evidenced by other Chinese apps surging in the opposite direction. This decline actually represents a strategic ceding of U.S. market share by Temu and Shein, as they are reducing ad spending that would otherwise support rankings and downloads.
This collapse in the rankings highlights that Temu and Shein's meteoric rise was heavily reliant on aggressive ad spending, a level of spending that has become unsustainable in the new market conditions. This is an important market signal for cross-border brands.
It's really important to stop ignoring this trend! According to Reuters, Temu's average daily U.S. ad spend in early April was down $31% from March, while Shein's was down $19%. Of the nearly 30,000 ads for Temu in Meta's ad inventory, only a handful remain active in the U.S. at this time.
This is an inevitable market correction for a business model built on regulatory arbitrage. When the duty-free minimum was expanded from $200 to $800 in 2016, it set the stage for Temu, Shein, and later Amazon Haul. U.S. Customs data show that minimum duty-free imports exploded from $9.2 billion in 2016 to $54.5 billion in 2023, with Chinese sellers accounting for nearly 60% of all shipments.
For example, by announcing price increases at almost the same time, starting April 25th, both companies are effectively admitting that their ultra-low price model will not 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.
What does this mean for Taiwanese sellers and e-commerce entrepreneurs? The minimum tax exemption has created an unfair advantage by allowing Chinese platforms to continue undercutting U.S. retailers. Now, for the first time since the Trump administration took office, the impact of bold policy changes is having a material effect on market share.
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# Cross-border E-commerce # Taiwan Sellers # Market Adjustment # Tariff Policy # E-commerce Entrepreneurs # International E-commerce # Cross-border Overseas # U.S. Market
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