Shein and Temu fashionistas have found new options to get their apparel and footwear fix — thanks to higher prices slapped on the fast-fashion sites due to the skyrocketing tariff rates.
According to transactional data from Consumer Edge US, some Shein and Temu shoppers have transitioned to department store and specialty retailers such as Bloomingdale’s, Kohl’s, Nordstrom Rack and Aéropostale, as well as Gap’s Old Navy and even Urban Outfitter’s apparel rental service Nuuly.
For the three weeks ended April 27, spending at Aéropostale jumped 101 percent more than in the year-ago level by lapsed Temu and Shein shoppers. The increase for the same period was 52 percent at Bloomingdale’s, 21 percent at Nordstrom Rack, 12 percent at Old Navy, and 6 percent at Kohl’s. Fabletics saw sales spike 114 percent. Meanwhile, the same consumers spiked up the average spend for the rental service Nuuly by 52 percent during the same period.
Consumer Edge said their data can isolate shoppers that used to shop at the two low-cost e-tail giants and see where they are shopping now.
U.S. President Donald Trump last month eliminated the duty-free de minimis treatment for shipments valued at $800 or less, and followed that with a tariff rate of 145 percent on most China imports to the U.S. Then he implemented a duty rate that cut the tariffs for international shipments to either 30 percent of the value shipped or $25 per parcel.
On May 2, the new rate was a tariff of 120 percent or a flat fee of $100 per postal package. And in Trump fashion, that was followed by the U.S.-China 90-day tariff freeze disclosed on Monday where the duty rate beginning on Wednesday was temporarily frozen at 54 percent from 145 percent through Aug. 14. Currently, direct-to-consumer (DTC) shipments from China face a 54 percent tariff from 120 percent for goods valued at up to $800. Left intact was the $100 flat fee for each package, although the planned June 1 increase to $200 has been canceled. Packages sent through commercial delivery services—United Parcel Service, FedEx and DHL are the three main carriers — have a tariff rate of 30 percent.
The two fast-fashion firms were quick to raise their prices. In addition, Temu had halted shipments from China, only to end up with fulfillment issues on U.S. orders. And while Shein was still shipping to the U.S. from China, it moved some shipments to U.S. warehouses before fulfilling orders, lengthening the delivery times to customers.
Temu is a marketplace that has built out a network of local warehouses in the U.S., one that includes working with third-party logistics firms either to get U.S. sellers to use its warehouse space or have local sellers drop-ship goods to fulfill orders. It also has a partnership with DHL. Shoe options on the site include a women’s orthopedic slip-on knit walking shoe with arch support for $5.24, touted as a “summer sale” and no import charges since it ships from a local warehouse; a women’s athletic hiking sandal for $26.80, also a “summer sale” shipping from a local warehouse and a suggested manufacturer’s price of $58.99, and a non-slip men’s indoor-outdoor open toe slide sandal for $9.74, with a manufacturer’s suggested price of $64.35.
Shein does more DTC shipping from China, and it also sells Shein-branded goods. The site’s shoe options include a women’s flat sandal for $8.88; a women’s rhinestone pointed toe slip-on with a crystal block heel for $18.34, and a men’s skateboard shoe for $21.45. The shoes have an average discount of 30 percent off suggested prices.
Since the de minimis showdown began, Consumer Edge’s transactional data points show that Temu’s year-over-year spend growth slowed from up 50 percent on April 9 to “nearly flat” at the end of the month. The company also pulled back on advertising, which is believed to have pressured sales. Its competitor Shein saw its growth slow from up 30 percent to down 20 percent.
But the 90-day pause could shift spending patterns again for fashion and footwear.
“It’s possible Temu and Shein will try to attract and retain customers during this tariff reprieve. Just today, Shein announced a price drop across many different products,” said Michael Gunther, Consumer Edge vice president, head of insights. He was referring to a note on Shein’s U.S. site Wednesday telling shoppers to check out its summer deals, which also noted on the same page what tariffs are and how the checkout amount covers the entire cost without any additional fees either before or after an ordered package is delivered.
There’s been speculation that the two low-cost e-tailers might use the reduced rate to bring in a higher number of goods than usual to store in U.S. warehouses as they also re-evaluate their business model.
“The reduction of the import tax for de minimis shipments from China could draw consumers back if Shein and Temu are able to keep prices lower than other retailers,” John Harmon, managing director, technology research for Coresight Research, said. “Consumers are savvy and well trained to look for free shipping, coupon codes and deals to get the lowest price. If they can find goods cheaper at other retailers, they will.”
Harmon said while it remains unclear what’s “ahead for tariffs between the U.S. and China” over the longer term, it was unlikely that either Temu or Shein would “drastically” change their business model over the short term. But as consumers look to other retailers for low price options, what we probably can expect to see is “an uptick in discounter and second-hand shopping since they already have inventory in U.S. warehouses and can attractively price goods in spite of tariffs,” he said.
Neither Shein nor PDD Holdings, Temu’s parent, responded to a request for comment by press time.
