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Fast fashion e-commerce sites Temu and Shein say they're raising prices because of tariffs

Both sites say U.S. customers will see higher prices starting next week

Shein and Temu app icons are seen in this illustration from 2024. Both e-commerce sites say they plan to raise prices for U.S. customers starting next week, a ripple effect from President Donald Trump's tariffs. (Dado Ruvic/Reuters)

Shein and Temu app icons are seen in this illustration from 2024. Both e-commerce sites say they plan to raise prices for U.S. customers starting next week, a ripple effect from President Donald Trump's tariffs. (Dado Ruvic/Reuters)

China-founded e-commerce sites Temu and Shein say they plan to raise prices for U.S. customers starting next week, a ripple effect from President Donald Trump's attempts to correct the trade imbalance between the world's two largest economies by imposing a sky-high tariff on goods shipped from China.

Temu, which is owned by the Chinese e-commerce company PDD Holdings, and Shein, which is now based in Singapore, said in separate but nearly identical notices that their operating expenses have gone up "due to recent changes in global trade rules and tariffs."

Both companies said they would be making "price adjustments" starting April 25, although neither provided details about the size of the increases. It was unclear why the two rivals posted almost identical statements on their shopping sites.

Since launching in the U.S., Shein and Temu have given Western retailers a run for their money by offering products at ultra-low prices, coupled with avalanches of digital or influencer advertising.

The 145 per cent tariff Trump slapped on most products made in China, coupled with his decision to end a customs exemption that allows goods worth less than $800 US to come into the U.S. duty-free, has dented the business models of the two platforms.

E-commerce companies have been the biggest users of the widely used exemption. Trump signed an executive order this month to eliminate the "de minimis provision" for goods from China and Hong Kong starting May 2, when they will be subject to the 145 per cent import tax.

As many as four million low-value parcels — most of them originating in China — arrive in the U.S. every day under the soon-to-be cancelled provision.

U.S. politicians, law enforcement agencies and business groups lobbied to remove the long-standing exemption, describing it as a trade loophole that gave inexpensive Chinese goods an advantage and served as a portal for illicit drugs and counterfeits to enter the country.

Shein sells inexpensive clothes, cosmetics and accessories, primarily targeting young women through partnerships with social media influencers. Temu, which promoted its goods through online ads, sells a wider array of products, including household items, humorous gifts and small electronics.

In November, American e-commerce giant Amazon launched a low-cost online storefront featuring electronics, apparel and other products priced at under $20. Many of the electronics, apparel and other products on the storefront Wednesday resembled the types of items typically found on Shein and Temu.

 

WATCH | Could fast-fashion giant Shein take on Amazon?: 

Fast-fashion retailer Shein is launching a global online marketplace, selling from third-party vendors similar to Amazon. Lauren Bird sits down with About That producer Julie Zenderoudi to break down Shein's plan, and the potential environmental and labour implications of the move.

In their customer notices about the pending price increases, the companies encouraged customers to keep shopping in the days ahead.

"We've stocked up and stand ready to make sure your orders arrive smoothly during this time," Temu's statement said. "Were doing everything we can to keep prices low and minimize the impact on you."

Both companies slashing digital advertising

Shein and Temu both market heavily toward younger, thriftier North American audiences on digital media. But industry data shows they are cutting ad spending on most platforms, according to two digital marketing firms that measure ad spending.

Temu's daily average U.S. ad spend on Facebook, Instagram, TikTok, Snap, X and YouTube declined a collective average of 31 per cent in the two weeks from March 31 to April 13, compared with the previous 30 days, estimated Sensor Tower, which tracks such spending.

Shein's daily average U.S. ad spend on Facebook, Instagram, TikTok, YouTube and Pinterest fell a collective average of 19 per cent over the same period, it added.

Temu has sharply reduced ads on Google Shopping since April 12, after a marked ramp-up during the first quarter, said Mark Ballard, director of digital marketing research at Tinuiti.

Meta declined to comment. Google, Shein and Temu were not immediately available for comment.

With files from Reuters

Author: The Associated Press

Source: CBC News:

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