Temu and Shein, the two popular online platforms known for low-cost goods, will be raising prices starting April 25, as new US trade rules increase their operating costs.
In messages sent to customers this week, both companies said the adjustments are necessary due to changes in global trade policies. They have encouraged shoppers to buy at current prices before the increase takes effect.
The pricing shift comes in response to an executive order signed by US President Donald Trump, which targets the “de minimis” exemption. The policy has allowed companies to ship low-value goods (under $800) into the US without paying import duties – a key factor behind Temu and Shein’s rapid expansion in the American market. The exemption is set to be scaled back starting May 2.
Temu and Shein have not responded to requests for further comment.
Currently, Shein lists dresses ranging from $6 to $91, while Temu’s prices stretch from $2.48 to over $200, depending on the item.
Ripple effects felt in China’s manufacturing hubs
The impact of the trade policy changes is being felt far from the US, in the industrial districts of southern China. A group of urban villages in Guangzhou’s Panyu District – informally known as “Shein villages” – has seen a slowdown in work, with local suppliers reporting fewer orders.
Three factory owners and four suppliers interviewed by ABC News said Shein has been shifting production away from the area, with Vietnam emerging as an alternative source of manufacture.
One manufacturer, Mr. Li, who has worked with Shein for five years, said his factory’s orders from the company have dropped by about 50% this year. He attributed the decline to production being moved abroad.
“We don’t know what will happen next,” Li said, saying that new tariffs add uncertainty to an already challenging environment.
Shifting supply chains, but at a cost
Expanding production into Vietnam could help Shein maintain access to de minimis shipping exemptions, at least for now. But moving operations isn’t simple, especially for a company that relies on rapid design-to-delivery cycles and small-batch production.
The business model and supply chain changes have to happen together, according to Sheng Lu, professor of fashion and apparel studies at the University of Delaware. Without altering how it produces and ships products, Shein may struggle to meet both cost and speed demands in new manufacturing locations.
Alison Layfield, director of product development at logistics firm ePost Global, said the changes are a significant challenge. “The model is really genius when you think about it […] but to move that whole business model, that’s going to definitely put a hiccup in their turnaround times and their costs,” she said. “Of course they will want to pass those costs onto consumers but […] consumers are not going to be ordering at the quantity and the price point that they have in the past.”
Vietnam isn’t a fit for everyone
For factory owners like Mr. Li, relocating to Vietnam comes with high upfront investment and productivity concerns. He says that a job that takes one day in China might take a month elsewhere due to differences in workforce efficiency.
While Li plans to focus more on domestic orders, he said some manufacturers in the region face difficult decisions. “They have only two choices,” he said. “One is to go bankrupt, and the other is to go to Vietnam.”
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