Temu Takes a Hit: Soaring Prices and Questionable Quality Drive Away U.S. Customers
Rapid Customer Loss for Temu
It seems the tide is turning against Chinese marketplace Temu in the United States. Reuters reports a significant drop in American interest in the platform, with user numbers diving by a staggering 48% from March to May 2025. This downward spiral can be attributed to the abolition of duty-free imports of Chinese goods into the U.S. by the previous administration of President Donald Trump.
In response, PDD Holdings, Temu's parent company, vowed to sell exclusively American-stored goods to domestic customers. However, the tightening of taxes still led to a surge in prices, and the increasing complaints about the platform's questionable product quality only accelerated the exodus of disenchanted customers.
European consumers are also growing wary of Chinese goods, with Temu investing heavily in European marketplace advertising. In the UK, for example, Temu increased its ad spend by 10% over the entire year, and in France by a whopping 115% compared to the previous year. Despite these investments, Temu only managed to attract a mere 10% more customers in the UK.
The issues prolong in Kazakhstan, where Temu's aggressive advertising tactics and the difficulty of returning or exchanging faulty products have sparked backlash from locals. Arman Shakkaliev, Minister of Trade and Integration, highlighted the challenges consumers face due to foreign marketplaces operating outside Kazakh jurisdiction, potentially jeopardizing consumer rights and the safety and quality of products.
Moreover, Kazakhstan's law allowing duty-free import of small parcels valued up to 200 euros has created an unfair competitive advantage for Chinese e-commerce giants like Temu, leading domestic businesses to pay more in taxes. This issue has been publicly raised by MP Azat Peruashev but remains unresolved.
All in all, Temu's customer losses in the U.S., Europe, and Kazakhstan can be traced back to the ending of the US "de minimis" exemption, which eliminated duty-free imports of Chinese goods under $800. The hefty new tariffs (up to 145%) have sent prices soaring and driven away price-conscious shoppers, while regulatory challenges and operational difficulties further reduce Temu's appeal. Even aggressive advertising and a vast product catalog haven't been enough to stave off the impact of these fundamental changes in the import landscape.
The surge in prices due to new tariffs exerted a significant impact on American consumers, compelling them to seek alternatives in the industry, thus causing a decline in the finance sector of Temu. This trend is also echoing in the European market, where escalating complaints regarding questionable product quality further deter buyers from engaging in business with Temu.
