Temu and Shein face massive tariffs. But don't count them out of the U.S. e-tail scene, experts say

Core Viewpoint - The closure of the de minimis rule and the imposition of high tariffs on Chinese imports have disrupted the business models of Temu and Shein in the U.S. However, experts believe these e-commerce companies will continue to be significant players in the American online retail market [1][4]. Impact of Trade Policy - The de minimis rule, which previously exempted U.S. imports worth $800 from tariffs, has been closed for shipments from China, exposing Temu and Shein to tariffs as high as 120$100 to $200 [2][3]. - The removal of this exemption has led to rising prices on Temu and Shein, with Temu ceasing direct shipments from outside the U.S. altogether [3]. Competitive Strategies - Despite the challenges, experts assert that Temu and Shein have contingency plans and are capable of adapting to the new tariff environment [5][6]. - Both companies have been accelerating localization strategies, onboarding goods from American sellers to mitigate tariff impacts [7][8]. Pricing Dynamics - Prices on Shein have reportedly increased between 5% and 50% across various categories, with the most significant hikes in toys, games, and beauty products [13]. - Even with price increases, Temu and Shein may still offer products at significantly lower prices compared to competitors like Amazon, maintaining their price competitiveness [14][15]. Supply Chain Adaptability - Temu and Shein's success is attributed to their agile supply chains that quickly adapt to consumer trends, with Shein employing small-batch production to efficiently test and scale products [17]. - The companies utilize effective marketing strategies, including gamification and social media engagement, to maintain consumer interest and drive sales [20][21].