Temu Halts Direct Shipments from China to U.S. Shoppers
Chinese discount retailer overhauls U.S. strategy amid rising trade barriers.
Temu’s rapid rise in the United States e-commerce space was built on a low-cost, cross-border model, capitalising on a little-known trade rule. However, the recent elimination of the de minimis tariff exemption for Chinese and Hong Kong goods has shaken that foundation.
Once known for shipping ultra-cheap items directly from Chinese factories to American doorsteps, the company is now undergoing a fundamental transformation. In response to new trade restrictions, international fulfilment was shifted, opting instead to sell only products already warehoused in the United States, which represent a dramatic departure from the company’s original business strategy, and signal a broader shift in how global e-commerce platforms navigate regulatory hurdles.
The consequences are clear. By relying on domestic inventory, Temu is sacrificing its pricing power, the very trait that sets it apart from competitors. The platform now faces operational strain as it works to keep U.S. warehouses stocked without the benefit of its once-agile cross-border network.
Bloomberg reported that as early as February, Temu began urging its Chinese suppliers to take on more logistical responsibility by shipping inventory in bulk to U.S. distribution centres. This move effectively repositions the company from a hands-on logistics player to a more passive online marketplace, streamlining its operations while pushing complexity upstream to its manufacturing partners.
With its fulfilment model disrupted and its margins under pressure, its future in the U.S. now hinges on its ability to adapt quickly, build domestic supply resilience, and possibly reimagine its value proposition altogether. As policymakers continue to scrutinise Chinese imports, it could become a blueprint, or a warning, for other global e-commerce ventures navigating uncertain trade waters.
