Reports from foreign media have emerged stating that Chinese e-commerce giants Temu and Shein have significantly reduced advertising expenditure in the United States. This is due to the overlap of U.S. President Donald Trump's public tariff policy and the end of tax exemptions on low-value parcels. Consequently, major U.S. tech corporations, which have relied on these companies as their biggest advertisers, have been hit hard by the decline in advertising revenue.
On the 16th (local time), the Financial Times reported, citing a survey by market research firm Sensor Tower, that Temu cut its expenditure on major advertising platforms such as Meta (the parent company of Facebook), X (formerly Twitter), and YouTube by an average of 31% compared to the previous month during the two weeks from the 1st to the 13th of this month. According to the industry, Temu was the largest advertiser on X last year. Marketing analytics firm Smart E-commerce also confirmed that Temu has completely halted advertising expenditure on Google Shopping since the 9th.
During the same period, Shein reduced its average daily advertising costs on platforms including Meta, TikTok, YouTube, and Pinterest by 19%, with YouTube advertising cut particularly sharply. Compared to the same period last year, it is reported that they have nearly halved their advertising expenses.
The reduction in advertising by these two Chinese e-commerce companies, which have rapidly grown in the U.S. market since the COVID-19 pandemic, illustrates the ripple effects of President Trump's tariff policy on U.S. corporations.
Previously, President Trump abolished the tax exemption for products under $800, deciding to impose tariffs of up to 120% or a fixed fee of $75 to $150 per parcel. For shipments through private carriers like UPS, the tariff rate could rise to as much as 145%, and starting in June, the fixed fee per parcel will increase to $200. According to reports from the U.S. Congress and customs data for 2023, parcels sent from these two companies account for over 30% of all tax-exempt parcels (1.5 million annually) entering the United States. However, it remains unclear whether these costs will be borne directly by consumers or reflected in the prices by sellers.
The Financial Times forecasted that "the taxes imposed on parcels under $800, which will start being taxed, are still lower than those tariffed on existing Chinese imports, but they will restrict the price competitiveness of the two companies that have pursued a low-cost strategy."
Meanwhile, orders from U.S. consumers concerned about price increases ahead of the end of tax exemptions for Chinese e-commerce are surging. On this day, The New York Times reported that "Temu and Shein posted notices on their official websites stating that price adjustments would begin from April 25," leading to stock shortages as U.S. consumers rush to shop before the price hikes.