Temu Reportedly Cuts Back on Paid Ads After Tariff Price Hikes

Group 1 - Shein and Temu announced plans for tariff-related price hikes effective April 25, 2025, due to increased operating expenses from changes in global trade rules and tariffs [1][3] - Both companies have communicated to customers about the price increases and encouraged shopping at current rates before the hikes take effect [2][3] - The end of the "de minimis" exemption, which allowed duty-free entry for goods priced below $800, is a significant factor in the price adjustments [2][3] Group 2 - Temu has reduced its paid advertising significantly, resulting in an 80% decrease in paid search traffic, which may negatively impact shopper engagement and pricing models [2] - Recent government data indicates muted online sales as consumers shift spending towards big-ticket items like electronics and cars in anticipation of new tariffs [4] - Sales in furniture and home furnishing stores showed a month-over-month decline of 0.7%, although they were up 7.7% compared to March 2024, indicating mixed performance in retail sectors [5] Group 3 - Despite concerns over tariffs and potential recession, consumer spending remains robust, supporting business results amid an uncertain macroeconomic environment [5][6] - There is evidence of a pullback in commercial lending and increased caution on credit, but digital adoption in retail banking and payments is accelerating [6]