Have you noticed fewer Temu ads recently? The once-ubiquitous discount promotions now appear less frequently on mobile screens. This isn't mere perception—data confirms the Chinese e-commerce platform is facing significant challenges in the US market.
Drastic User Decline
According to market intelligence firm Sensor Tower, Temu's daily active users in the United States plummeted 58% in May 2024, nearly halving its user base. This dramatic drop results from multiple converging factors rather than isolated incidents.
Policy Changes Disrupt Business Model
The primary catalyst emerged from policy adjustments. Temu previously relied on the "de minimis" exemption that allowed duty-free shipping of low-value goods directly from China to US consumers, enabling its aggressive pricing strategy. However, the White House terminated this provision in early May. The subsequent tariff increases forced Temu to raise prices, directly impacting consumer purchasing decisions.
Strategic Shifts in Marketing and Logistics
Beyond policy headwinds, Temu deliberately reduced its US advertising expenditure. In an era where traffic dominates commerce, decreased marketing inevitably lowers brand visibility—hampering new user acquisition while potentially accelerating existing user attrition.
More fundamentally, the company altered its fulfillment approach. Responding to regulatory changes, Temu pivoted toward selling merchandise stored in US warehouses, abandoning its direct-from-China shipping model. While this adjustment mitigates tariff risks, it simultaneously reduced US traffic by approximately one-third and caused significant gross merchandise value contraction.
Broader Implications
The combined effect of policy modifications, advertising cuts, and logistical restructuring precipitated Temu's sharp US user decline. This development serves as a cautionary tale for cross-border e-commerce platforms: a singular focus on low-price strategies proves unsustainable. Only through continuous adaptation to market fluctuations and operational optimization can companies endure intensifying competition.