🚦 Why Temu and Shein Are Looking Beyond the US
Two of the world’s fastest-growing e-commerce giants, Temu and Shein, are shifting their sights firmly to Europe. Both companies expanded aggressively in the United States for years. Now, they are feeling the impact of tougher import rules. Europe is the next big target.
According to new data from Sensor Tower, reported by the Financial Times, the number of monthly active users for both platforms in the US has dropped sharply between March and June 2025:
- 📉 Temu: down 51% to 40.2 million users
- 📉 Shein: down 12% to 41.4 million users
🧾 The End of a Major Loophole: The ‘De Minimis’ Rule
What’s behind this dramatic drop? The answer lies in changing trade policy.
The US ended its ‘de minimis’ exemption. This exemption previously allowed packages from China and Hong Kong valued under $800 to enter duty-free. That rule helped Temu and Shein ship cheap goods directly to US customers without paying import tariffs.
As of May 2025, this loophole is gone. A steep new tariff replaced it. Initially, this tariff was 90%. Later, it was adjusted to 30%. This change made many of their low-cost goods less competitive.
💰 Big Cuts in Ad Spend
Facing these new hurdles, both Temu and Shein have slashed their marketing budgets in the US.
- Temu’s US ad spend is down 87%
- Shein’s US ad spend dropped by 69%
Less advertising means less visibility — one of the main reasons their active user numbers are shrinking so quickly.
🌍 Europe: The New Battleground
To offset this slowdown, both players are moving aggressively into Europe.
Temu saw its user numbers grow by 64% to 76% in Germany, France, and Spain in June alone.
Shein recorded user growth between 13% and 20% in the UK, Germany, and France.
They’re betting that Europe’s large consumer base and relatively open market can help keep their hyper-growth story alive.
⚖️ But Europe Won’t Be Easy Either
Europe’s growth potential looks promising, but the road is far from smooth.
- The EU is considering a €2 import levy on small parcels. The levy directly targets cheap cross-border orders from platforms like Temu and Shein.
- The UK is also looking to tighten its import policies, which could mean new customs checks and fees.
Both changes would reduce the cost advantage these platforms enjoy.
✅ The Big Takeaway
Temu and Shein’s pivot to Europe shows how quickly global e-commerce giants adapt to shifting trade rules. The end of easy US imports is forcing these brands to diversify markets. They are tweaking business models, like Temu routing US orders through local sellers to avoid direct China-US shipping.
As Europe becomes the next growth frontier, sellers, local competitors, and regulators will be watching closely. Can these platforms maintain their explosive expansion? Or will new EU tariffs and consumer protection rules curb their rise just as they did in the US?
