Report: Temu Loses 58% of US Daily Users Due to Tariffs

Temu reportedly lost 58% of its eCommerce platform’s daily U.S. users in May after the U.S. ended the de minimis exemption on imported goods from China on May 2.

Reuters reported the drop Monday (June 2), citing data from market intelligence firm Sensor Tower.

Bain & Company also found that Temu’s rates of sales growth and customer growth dropped sharply after the announcement of new tariffs, according to the Reuters report.

Reached by PYMNTS, Temu shared comments from Lei Chen, chairman and co-CEO of PDD Holdings, the parent company of Temu, who said the company’s global business is working with merchants to bring “stable prices and abundant supply” to consumers.

“No matter how policies shift, we’ll continue to strengthen our operations in the markets we serve, helping more local merchants grow on our platform and enabling more orders to be fulfilled from local warehouses,” Chen said in the comments, which were made Tuesday (May 27) during the company’s first quarter earnings call. “Right now, we are seeing these merchants becoming more proactive, with better-stocked inventory and more value passed on to consumers through differentiated products and services.”

The de minimis exemption allowed packages worth less than $800 to enter the U.S. without paying a tariff.

The rule was commonly used by Chinese eCommerce retailers like Temu to sell goods at lower prices by shipping them directly to consumers in the U.S.

President Donald Trump announced his plans for the imposition of additional tariffs on imports from China on Feb. 1, saying he aims to halt the importation of illegal drugs.

It was reported Feb. 11 that Temu was overhauling its Chinese supply chain in response to the new U.S. tariffs, asking factories to ship their own goods in bulk to U.S. warehouses, employing what it refers to as a “half-custody” policy, in which it only manages its online marketplace. The change was expected to lead to higher prices.

After the company made this change, more than one-third of the products Temu sells to consumers in the U.S. are fulfilled with inventory maintained in the U.S. Temu has also responded to the uncertainty around tariffs by raising prices and by boosting its efforts to sell in countries other than the U.S.

On April 18, it was reported that Temu also significantly scaled back on paid advertising in the U.S., leading to an 80% downturn in paid search traffic. This cutback on ads was expected to push away customers and further destabilize the company’s price models.

PDD Holdings said in its Tuesday earnings report that it saw a 38% year-over-year decline in profits in the first quarter due to tariffs and other factors, PYMNTS reported at the time.

Chen said during the call that tariffs “created significant pressure for our merchants, who often lack the capability to adapt quickly and effectively.”