Key Highlights :

Temu slashes U.S. prices up to 60% and revamps logistics to recover from deep sales losses.

Early signs point to Temu having recovered about 60% of the business lost due to tariffs and trade policy shifts.

Key Background :

Temu's initial success in the United States rested in large part on a trade loophole known as the "de minimis" exception, which allowed small packages to enter duty-free. This business model enabled ultra-low prices and super growth. However, the exemption was removed and stricter tariffs imposed, suddenly raising costs and cutting into Temu's competitive advantage.

The effect was quick. Temu reduced U.S. advertising expenditures on big platforms dramatically, lowering its visibility at the very time it became more expensive for consumers. Its app downloads fell from number one in the Apple Store to number five, and daily active users declined by over 40%. These numbers represented a major reversal for a company that had once been the dominant player in the low-price shopping app space.

At the same time, Temu was forced to raise prices on most products to cover new import duties, in some cases nearly doubling prices. Shoppers, initially drawn to the site by low prices, grew frustrated as longer shipping times and greater checkout prices leached away the brand's value.

In response, Temu began moving to localized fulfillment. Products that were labeled "local" were stored in U.S. facilities, reducing customs delays and eliminating some tariff costs. This strategy helped in rebuilding trust with customers by providing quicker and more consistent-priced orders.

By mid-2025, Temu further moved to a model based on logistics, inviting sellers to utilize its integrated shipping and warehousing infrastructure. This change also entailed new customs clearance strategies to maintain cross-border travel lean. The early signs suggest this reboot has allowed Temu to regain much of what it lost over the summer.

But the path forward is far from certain. Rival Shein has managed to shift fast and remains a potent competitor, and American regulatory headwinds are still not in decline. For Temu, the test is not simply winning back shoppers with price cuts but staying profitable in tougher terms of trade. Its destiny in America will be decided by whether it can sustain its low-price promise while building a more robust supply chain.

About the Author

Ryan Parker

Ryan Parker is a Managing Editor at Business Minds Media.