Temu, Shein face big U.S. tariffs. Don’t count them out, experts say

The closure of a Maas on the market and a priceless rates for China have performed the business model of Temu and Shein in the United States. And yet the e-commerce companies will probably remain a dominant power in the American online retail trade, experts suggest.

On Friday, the of the minimum rule – a policy that the American entry worth $ 800 of trading rates had been officially closed for shipments from China. This has been theme and shein exposed to tasks up to 120% or a fixed amount of $ 100, which rises to $ 200 in June.

The small package exemption was the key to the ability of the companies to maintain the budget prices on the merchandise sent from China. In the run-up to the removal, the prices of goods that were sent directly from China on Temu and Shein, with Themu fence, end directly outside the US.

The change will be welcomed by many opponents of minimum, including American legislators, work unions and retailers, who have argued that theme and shein have abused the exemption to substantiate local companies and to flood the country with illegal and counterfeit products.

But waste the new trade challenges that Temu and Shein Face“ e-commerce and supply chain experts AWD CNBC that the companies are still competing with their rivals in the US

“Don’t count them out … Not at all. You are types of Chinese e-commerce apps are Vry Adept and Agile. They have unforeseen plans and have taken the necessary steps to cover the rates from the margin perspective,” said Deborah Weinswig, CEO and founder of Coresight.

“I personally believe, if there is something, [America’s e-commerce] Game has been accelerated in Please of Temu and Shein … I am not surprised if the gap of the competitiveness actually continues to grow, “added Weinswig, whohe research and advisory firms, working with customers in technical, retail and supply chains.

The loss of the minimum exemption had long been expected, with the US President Donald Trump going to close in February Tijdaille. In preparation, theme and shein had accelerated location strategies for the US

Scott Miller, CEO of e-commerce consultancy firm PDPLUS, Toll CNBC that Shein and Temu goods from American sellers will remain on their apps on board their apps to protect them at rates.

“Many of the current sellers on Temu and Shein are located in China or countries in the area, but not all. Local American companies have connected the platforms in an acceleration pepos … Several of our customers are on board or started the process of on board in recent months,” he said.

Although margins for more localized brands and sellers will be lower on the platforms than those directly from China, they can be competitive, according to Miller.

I have added that in the case of Temu, suppliers are attracted to loan costs, light competition and more help with onboarding and setting up salt channels when Amazon offers.

In the last few days, Temu, who is owned by the Chinese e-commerce Gigant PDD Holdings, you have started exclusive offering articles that are sent from local warehouses to American shoppers.

Many of those goods are still from China, but then in bulk to American warehouses, according to experts. Although these bulk items are subject to rates, they also benefit from economies of scale.

This development will probably scale the variety of products on Temu, said Henry Jin, a associate professor of Supply Chain Management at Miami University. He added that Temu will probably summarize direct shipments from China, depending on the outcome of the trade war between Washington and Beijing.

Shein, meanwhile, have read the expansion of the supply chain, build production activities in countries such as Turkey, Mexico and Brazil and reported to switch to Vietnam.

The company still seems to send directly from China and probably has more room to absorb rates because his “towering” margins in his core manufacturer company, said Jin.

“If there is one thing that Chinese companies are good at, it works on a razor in an intelligen competitive, if not unfavorable environment … They find every scrap they can survive,” I have added.

Actual Planeide, experts agree that Trump’s Trade Poly will influence the prices on Temu and Shein. The companies announced for the first time that they will increase prices in mid -April to prevent rates.

According to data from Coresight rose Acros -Shop categories on Shein between 5% and 50% in the second half of April, with the best increases in toys and games and beauty and health.

However, many e-commerce experts remain convinced that the Temu and Shein will continue to offer price competition.

Weinswig from Coresight said that the two companies offered the previous products for similar goods products at a third of the prices on Amazon. So, even if they are more than double the prices to absorb the effects of rates, many goods can remain cheaper on American e-commerce sites and retailers.

Jason Wong, who works in product logistics for Temu in Hong Kong, note the dynamic when you speak to CNBC last month and compare the Temu to Dollar Store. If the prices go in the dollar shop from $ 1 to $ 2, it is still a dollar shop, he said.

Furtermore have also affected Trump’s rates on China and other trading partners American retailers and e-commerce sites such as Amazon.

When Forever 21 was filled in for bankruptcy protection earlier this year, it blamed Shein and Temu’s use of the minimum exemption, of which it said ‘undermining’ his business.

But experts say that the success of Shein and Temu attributes to that trade in the law, missing many of the other factors that have made them in the US.

According to Anand Kumar, Associate Director of Research at Coresht Research, Temu and Shein owe much of their success to their Agile Supply Chains who quickly adapt to consumer trends.

The small batch production of Shein, which, for example, is launched product styles in limited quantities, usually allow around 100-200 items to efficiently test and scale products.

Another key is the applications of the companies, which uses different strategies to maintain the interest of users, including frequent telephone notifications, product recommendation algorithms and perhaps the most noty, that constantly displayed prices of promotions and flash sales.

Temu offered a “Mega Savings Extravaganza” on Monday for American consumers. Sub of the best -selling items for sale include stainless steel hook earrings for $ 1.45 and a mounted mattress for $ 11.54. It is unclear whether the observed local goods were stored before the rates came into force.

In Adionion, App users are often confronted with mini games that provide different coupons or ways to earn rewards, as well as opportunities to buy “Mystery Boxes” with various products.

That “gamification strategy” certainly plays in the consumer psychology of many American shoppers who are items of the excitement of the excitement to get Uble to get a lot, said Jin of Miami University.

Experts also marked that the Temu and Shein have been effective in marketing, including by using live streaming and social media.

On the other hand, according to the Weinsights of Coresights, American retailers did not succeed in having collected the threats of Temu and Shein sufficiently and to adjust their supply chains and price models.