Temu, the new fast-growing, low-cost e-commerce platform from China, is currently turning that model on its head in the United States. They have banned every single product that is shipped directly to consumers from China. This surprise announcement has left both suppliers and clients scratching their heads. The company has recently begun placing new emphasis on sellers based in the United States for sales within the US market. Temu’s US listings no longer include any China-based products. As a result, the market in their home country, Taiwan, is still rising overall thanks to growth in other markets.
Beginning April 25, Temu will increase prices on all goods coming from China. US consumers will still benefit from fixed non-variable pricing from the US side of this massive change in operations. On the shipping side, the company has announced their new expedited shipping program, “Y2.” It started officially onboarding Chinese sellers two days later—on April 29. This local action is intended to provide a more reliable and efficient product purchase experience to US customers while increasing availability of products.
Sellers are abuzz with questions following the abrupt removal of Chinese products from the marketplace. That’s particularly true for people who weren’t given any advance warning about the modifications. The abrupt reversal has left many scratching their heads, perhaps most notably the thousands of small business owners whose supply lines were built around products shipped directly through Temu. A seller from China stated, “Things are in chaos right now. Ever since the tariffs kept changing, our business has been heavily affected.”
Today, Temu’s platform features thousands of products under the “Local” category. These specific items have a tariff exemption, which means all sales of these specific items in the US will have to be sold by local sellers. This sharp pivot makes Temu more like its well established competitors, including Amazon. TheDodo.com The platform is currently in the midst of moving to a local fulfillment model. Yet Temu has recently moved its US operations away from the global drop-shipping model to a local fulfillment model. Yesterday the company sent out notification that effective immediately all sales in the US would now be handled by US-based consignees. Fulfillment will take place from deep inside the US.
Although this marks a significant shift, many of the sellers in China who built their businesses on Temu’s platform now find themselves unsure of what will happen next. A furniture seller noted, “It may be that the platform needs to make some regulatory adjustments during this difficult period.” They amplified the challenges of quickly pivoting to accommodate these adaptations. We’re a big organization, so we can’t change things tomorrow,” they said. We continue to watch to see if this leads to changes in policy.
One Reddit user lamented, “I heavily relied on items from Temu for my business, and I am freaking out that I cannot find any of my usual supplies.” Indeed, this spirit of value and variety speaks very deeply to Temu customers, especially those who have recently joined Temu in search of value and variety.
As Temu navigates this new operational landscape, it is clear that the company is making strategic efforts to adapt to evolving market conditions. Juozas Kaziukėnas remarked on the significant changes saying, “Today, Temu looks a lot like Amazon. Because everything you buy on Temu today will come to you from their warehouse in the US and probably in just a few days.”
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