Products from Temu are only shipped from the U.S., not necessarily manufactured domestically.
In a surprising shift, Chinese e-commerce platform Temu announced that it's revamping its shipping model, sending all American sales through US-based sellers. A Temu spokesperson confirmed, "All sales in the U.S. are now handled by locally based sellers, with orders fulfilled from within the country."
This move marks a significant departure from the platform's previous strategy, which took advantage of the de minimis exemption to flood the US market with ultra-low-cost goods. With Donald Trump imposing harsh tariffs on all Chinese imports, this change might be an attempt to skirt that demand and adopt new tactics.
The de minimis loophole allowed shipments of goods worth $800 or less to enter the United States duty-free, often bypassing time-consuming inspections and paperwork. Chinese e-commerce sites, including Temu, were said to exploit this exemption to the fullest extent.
However, sites like Temu and Shein have been preparing for such changes for years. Last year, the Biden administration began criticizing the de minimis exemption, and Chinese shippers sensed a shift in attitude. In response, Shein started stockpiling goods and bulk shipping them to US warehouses.
Bloomberg reported in February that Temu began overhauling its Chinese supply chain, asking supplier factories to ship items in bulk to US warehouses. When those items run out, it's unclear if new items will be subject to the tariffs Trump has placed on China.
For now, imported goods are arriving at American doorsteps through US distributors. Temu remains tight-lipped about its manufacturer partners. According to Professor Chris Tang of the University of California, Los Angeles, if there are shortages, Temu could either re-order products or offer substitutes.
Temu appears to have raised prices last week, but the company denies any price increase. On its website, there are no import charges or extra costs for items purchased from local warehouses. However, some users on Reddit report finding many items out of stock.
One Reddit user noted that, on Friday, about 60 items in their cart abruptly became unavailable. Another user commented that their digital cart of over 300 items dwindled to just two, and an additional fee was applied unless a "local order" totaled at least $30.
Despite these challenges, this shift towards local fulfillment could potentially improve service levels, offering faster delivery times and easier returns for consumers. However, with increased logistics and inventory costs, American consumers may see some price increases or a reduced selection of ultra-cheap options. The company is also expected to pivot its market focus internationally due to these U.S. trade policy changes.
- This change in Temu's shipping model, where all American sales are now handled by locally based sellers, can be seen as an effort to shift focus from the finance and import aspect of the business to the industry and technology sector, as they strive to circumvent tariffs and optimize their supply chain using US warehouses and local sellers.
- As Temu revamps its shipping model and adopts new tactics, such as stockpiling goods and bulk shipping to US warehouses, it becomes increasingly evident that they are not only responding to the de minimis exemption's demise but also leveraging technology in their quest for efficiency, potentially offering consumers faster delivery times and easier returns, at the cost of potential price increases or a reduced selection of ultra-cheap options.
