Foreign media reported that on May 3rd local time, Temu, the cross-border e-commerce platform under Pinduoduo, announced that it would stop directly selling imported goods from China to US customers through the platform. In the future, sales in the US market will be handled by local sellers.
USA Today said that this adjustment means that American consumers will no longer buy products shipped directly from China through the Temu platform, but instead purchase products stored in US warehouses.
Temu told foreign media that under the new business model, platform products will not need to bear additional import tariffs or customs fees, while avoiding the costs associated with outsourcing transportation—this allows Temu to continue maintaining its low price advantage for products. Additionally, Temu also stated that the company is actively "recruiting local sellers in the US to join the platform," and through localized logistics channels, help local merchants reach more consumers and expand their businesses.
The immediate trigger for this event was the policy adjustment released by the US Customs and Border Protection (CBP) on May 1st, which canceled the tariff exemption treatment for small parcels (valued at no more than $800) from mainland China and Hong Kong starting May 2nd. According to CBP's latest announcement, all Chinese goods shipped to the US must follow formal customs declaration procedures (such as Class 11 or Class 01 declarations), and full tariffs and fees must be paid.
Temu will cease direct shipping of goods from China to the US Temu Official Website
In fact, since Trump's administration, there have been several changes to the tariff collection thresholds for small parcels. The Trump administration announced on February 1st that it would cancel the "minimum threshold" tariff exemption for small parcels from China, but later withdrew the decision in the same month. However, on April 2nd, Trump signed another executive order restoring the decision to cancel the tax-free policy for small parcels of Chinese goods, which began to be strictly enforced on May 2nd. Currently, e-commerce goods imported from China to the US face a maximum tariff rate of up to 145%.
After the cancellation of the tax-free policy, Temu has been actively seeking transformation solutions under cost pressure and supply chain challenges. To ensure sufficient inventory in local warehouses, Temu has accelerated the recruitment of US sellers. To attract sellers to use US-based warehouses, Temu has borne a significant proportion of the warehouse rental costs, even expanding the coverage of US-based warehouses from 15 cities to 40. According to industry media analysis, before Temu transformed its local warehousing strategy, consumers purchasing direct shipments had to bear importation fees amounting to 130%-150% of the product price, with some orders costing more than twice the price of the product itself. In fact, Temu has been continuously increasing its US domestic inventory over the past year to respond to changes in international trade policies and customs adjustments.
Besides the transformation of warehouses and supply chains, Temu has also invested considerable effort in local operations. Previously, to promote localization strategies, Temu has vigorously recruited talent from major US-based e-commerce giants such as Amazon and Walmart, successfully hiring numerous executives with salaries 40%-60% higher than average. According to foreign media reports, in the first quarter of 2025, Temu recruited at least 12 Amazon acquisition managers, Walmart supply chain experts, and TikTok e-commerce operation core members through targeted recruitment, actively building its US-based operational team.
However, under the slow growth of its parent company Pinduoduo's profit margins, Temu, as the main driver of its recent revenue growth, also faces immense pressure. The 2024 Q4 financial report of its parent company Pinduoduo showed that revenue reached 110.61 billion yuan (RMB), growing by 24%, which was lower than the market expectation of 115.62 billion yuan, causing a 7.3% drop in stock prices during pre-market trading on the same day, indicating a clear trend of slowing revenue growth. Market institutions speculate that in 2024, out of nearly 200 billion yuan in commission income for Pinduoduo, Temu's commission income contributed more than half of the revenue, but Temu has yet to achieve profitability, with an annual loss of approximately $3.5 billion.
To cope with market pressure, multiple overseas data institutions pointed out that Temu significantly reduced advertising and marketing investments in the US region in April. Independent e-commerce analyst Juozas Kaziukenas noted that this signals the company's intention to reduce costs, though it does not necessarily indicate a sharp decline in Temu usage, it does mean that Temu may temporarily abandon acquiring new users in the US market. Data from market research firm SimilarWeb also shows that since April, Temu's download volume in the US App Store has plummeted by 62%.
Similar to Temu, SHEIN, another major cross-border e-commerce giant, recently announced raising product prices to cope with the pressure of tariff adjustments. Meanwhile, SHEIN is actively reconfiguring its global supply chain, planning to shift production of US market orders from China to other countries to avoid high US tariffs.
As the US government increases tariffs on Chinese goods and cancels the tax exemption for small parcels, major cross-border e-commerce giants like Temu and SHEIN are adjusting their platform strategies to adapt to the new market environment. It can be foreseen that the cross-border e-commerce industry is entering a more complex and fiercely competitive new phase. How to balance price competition with compliance costs in an increasingly volatile international trade policy environment has become a pressing issue for major cross-border e-commerce platforms.
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Original Source: https://www.toutiao.com/article/7501222220405260834/
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