Shein and Temu are just the biggest examples of the new online retail landscape. They are preparing for price hikes due to new tariffs on Chinese imports that were implemented by former President Donald Trump. While both companies adjust to these changes that come into effect on April 25, 2025, they both face the potential of drastically re-treading trade regulations.
In an unprecedented move, Temu has slashed its daily average ad spend on major platforms such as Facebook, Instagram and TikTok by 90%. From March 31 to April 13, Temu significantly reduced its daily average ad expenditure among Facebook, Instagram, TikTok, Snap, YouTube, and X. This decrease was an average of 31% from the prior 30-day period. This decrease in advertising budget is an example of smart planning to cut costs ahead of what will undoubtedly be the new tariff’s negative effects.
Shein has shifted its marketing dollars. As a reaction, the company faced an estimated 19% decrease in daily average ad spend across Facebook, Instagram, TikTok, YouTube and Pinterest over this time frame. The reduction in advertising efforts raises questions about how these companies will maintain visibility and consumer engagement amid rising operational costs.
The upcoming tariffs forced the hand of both companies to beat them to the punch and announce price increases themselves. Note: Temu has scheduled Defense Price Adjustments for automatic application on or after April 25, 2025.
“To keep offering the products you love without compromising on quality, we will be making price adjustments starting 25 April 2025. We’re doing everything we can to keep prices low and minimise the impact on you,” – Temu spokesperson.
Shein expressed similar frustrations with the financial burden imposed by the shifting trade landscape. The withdrawal of the “de minimis” exemption poses additional obstacles to retailers. This exemption previously permitted duty-free imports for shipments valued at less than $800.
Both companies are definitely raising their price and changing their strategy. Very soon, consumers will begin to notice the impact of these higher costs. Now, Temu and Shein have to walk a tightrope between advertising expenditure and deep discount pricing. This awkward dance will be important to watch as they figure out this dangerous economic waltz.
“Due to recent changes in global trade rules and tariffs, our operating expenses have gone up,” – Shein representative.
As both companies brace for the forthcoming adjustments in pricing and strategy, consumers may soon feel the impact of these increased costs. The interplay between advertising spending and pricing strategies will be critical for Temu and Shein as they navigate this complex economic landscape.