eCommerce retailers Shein and Temu, which have exploded in popularity across the U.S. thanks to their cheap items, have sent letters to customers warning of incoming price increases.
Both retailers sent nearly identical letters to customers saying prices would go up on April 25 and encouraged them to shop “now at today’s rates,” according to a Wednesday (April 16) report from Reuters.
Shein and Temu have been able to keep prices low because of the “de minimis” exemption that allowed duty-free entry for merchandise priced below $800.
However, a recent executive order from President Donald Trump will close that loophole on May 2.
“Due to recent changes in global trade rules and tariffs, our operating expenses have gone up. To keep offering the products you love without compromising on quality, we will be making price adjustments starting April 25, 2025,” the statements from both companies said, according to Reuters.
Besides the termination of the de minimis exemption, Shein and Temu are also facing an uphill battle against U.S. tariffs on Chinese imports, set in motion by Trump.
Both companies have sought workarounds such as moving their production lines out of China, PYMNTS reported in February.
Temu responded to the tariffs by raising prices and encouraging its suppliers to store inventory in the U.S. Over one-third of the products it sells to consumers in the U.S. are fulfilled with inventory maintained in the U.S. The company is also boosting its efforts to expand its global footprint and sell in countries other than the U.S.
In addition, Temu is restructuring its supply chain management style. The company is asking factories to ship their own goods in bulk to U.S. warehouses, employing what it refers to as a “half-custody” policy, where it only manages its online marketplace.
Meanwhile, Shein’s efforts to shift production overseas was met with disapproval from China, which opposed the move.
“A source familiar with the matter told Bloomberg that China’s Ministry of Commerce has communicated with Shein and other companies to dissuade them from diversifying supply chains by sourcing goods from other countries,” PYMNTS reported earlier this month.
