Customs duties on Chinese product imports into the United States (145%) are not the only headache that Shein and Temu have to solve. Since May 2, the "de minimis" customs exemption has been eliminated: it allowed goods under $800 to enter the country without customs fees or complex formalities. Ideal for these companies whose business is shipping small packages from China.
Chinese fast fashion accelerates in Europe
This mechanism allowed the two Chinese groups to dump their cheap products abundantly on American customers. Its elimination and the customs duties jeopardize their business. Seeing that the American market is increasingly closed, Shein and Temu are turning to Europe. According to Sensor Tower, advertising spending increased sharply between March and April: +35% for Shein in France and the United Kingdom; Temu invested 40% more in France and 20% more across the Channel.
This European advertising blitz is obviously aimed at recruiting new buyers. In terms of downloads, the results are convincing, with a 25% increase in downloads for Shein and more than double that for Temu in the United Kingdom. However, the growth in active users remains modest: +5% for Shein, +10% for Temu.
At the same time, the two companies have reduced their advertising spending in the United States on TikTok, Instagram, and others, by up to 31% for Temu. The idea is to retain as many existing American customers as possible despite skyrocketing prices.
Europe, however, will not be Shein and Temu's El Dorado. Controls and measures to limit small Chinese parcels are increasing, both in France and on the continent.
Source: Reuters
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