US President Donald Trump’s order to block low-cost imports entering the US may affect fast fashion retailer Shein more than online dollar-store Temu, due to Temu’s wider product range and new shipping strategy.
The de minimis rule, allowing shipments worth less than $800 to enter the US tariff-free, helped both Chinese retailers to grow rapidly in recent years. However, this loophole was scrutinized during President Biden’s administration, causing both firms to prepare to rely less on it, which Temu did so rapidly.
According to tech analyst Rui Ma, the online dollar-store adopted a strategy similar to Amazon’s, shipping products to overseas warehouses instead of directly to customers. As a result, half of Temu’s products came straight from warehouses rather than directly from China by the end of 2024. Moreover, in the second half of 2024, Temu shifted focus toward shipping more products by sea.
Shein, on the other hand, continues to rely on air freight to ship its new styles each week. Basile Ricard, operations director at Ceva Logistics Greater China, explained that Shein’s business focuses on speed to supply the latest trends and remain responsive to fashion changes.
While the fast fashion retailer has opened centers in Illinois, California, and Seattle, most of Shein’s products still come from China. However, the retailer has started diversifying its supply chain by adding suppliers in Brazil and Turkey to adapt to new tariffs and regulations.
Nevertheless, Ma stated that there may be a short-term impact as both retailers should be able to adapt quickly. She also cited that China has the most competitive e-commerce operators and the most advanced supply chain.
Besides Chinese retailers, Trump’s executive order also caused the US Postal Service to halt parcels from China and Hong Kong before reversing a decision 12 hours later. Analysts estimate de minimis shipments to the US could drop by 60%.
