Shein and Temu Lose Millions of Customers Following Tariffs

Retailers Temu and Shein are reportedly shedding users following U.S. tariffs.

The platforms’ once-speedy user growth has begun to reverse since President Donald Trump imposed high tariffs on Chinese imports and closed a tax loophole that had allowed the retailers to undercut competitors, the Financial Times reported Monday (June 30).

Temu’s monthly active users in the United States, a measure of engagement on its app, dropped 51% to 40.2 million between March and June, per the report.

Shein suffered its own decline, although not as dramatically, the report said. Its monthly active user base fell 12% to 41.4 million.

The two companies have disrupted the eCommerce space in the last five years, building customer bases thanks to cheap prices and a torrent of advertising on social media, according to the report.

Shein had hoped to use this growth to propel itself toward an initial public offering (IPO), but it hit a series of regulatory roadblocks in the United States and the United Kingdom. The company is now reportedly planning to file for an IPO in Hong Kong.

The drop in usage for both companies may be connected to a dip in advertising spending, the report said. In the last three months, Temu’s U.S. ad spend plunged 87% year over year, while Shein’s was down 69%.

These declines came as consumers continued to show hesitancy about spending. The University of Michigan’s June Consumer Sentiment Index, released last week, showed sentiment rebounding, although it was still 18% below December post-election levels.

Also last week, data on personal income, spending and saving from the Bureau of Economic Analysis “painted a portrait of a pinched consumer,” PYMNTS said in a separate report. The data showed personal income dipping 0.4% month on month in May, the first monthly decline since September 2021.

Research from PYMNTS Intelligence’s “2025 Global Digital Shopping Index” found that 60% of consumers browse merchant sites on their phones multiple times each week, with nearly half of those browsing sessions leading to sales.

“Smartphones now touch nearly half of all retail purchases, underscoring the central role mobile plays in the shopping process,” PYMNTS wrote Monday. “Merchants, therefore, must treat this always-on audience as the bedrock of their channel strategy.”