US Consumers Struggling with Temu and Shein, Admit Limited Options Available
Rewritten Article:
Meet Rena Scott, a thrifty 64-year-old retiree from Virginia, who's a devout aficionado of the Chinese e-commerce site, Temu. With 10 to 12 active orders at any given moment, she's practically a regular shopper here. From clothing like four fresh shirts nestled in her cart to crafting essentials such as yarn and beads, filling her entire yarn room, and household items spanning from rugs to furniture – she's got it all!
For Scott, indulging in her Temu shopping spree is as natural as breathing. "Everything here has come in from overseas anyway, so you're just cutting out the middle man, like the Walmarts, the Amazons," she explains. Millions of Americans, like Scott, have flocked to Temu and Shein, another Chinese e-commerce juggernaut, in search of their budget-friendly goodies.
However, President Donald Trump's trade skirmishes are gradually reshaping the wallet-friendly pageant. He imposed 145% tariffs on imports from China and a 10% minimum tax on other countries. The "de minimis" exemption, which let goods under $800 sail into the US without duties, is set to expire on May 2. As a result, Temu and Shein have preemptively bumped up prices on a multitude of items – from lawn chairs to swimwear.
This new development means the "cheap finds" that lured so many shoppers to Temu and Shein are now tantalizingly out of reach for Scott and countless other consumers. "I can't afford to shop from Temu now, and I already couldn't afford shopping in this country," Scott laments.
Struggling Lower Income Families
Scott, who lives alone and relies on disability pay after a transplant left her unable to work, struggles to make ends meet. From sacrificing her beloved fast food meals to driving the same car since 2005 and maintaining her central air at a sweltering 85 degrees to control her electricity bills, she's living frugally.
A Temu cabinet she bought for $56 (before the increase) now stands at $80, making it an unsustainable luxury for her. Lower-income households, like Scott's, will be hit hardest as the era of cheap Chinese e-commerce comes to a close. Approximately 48% of low-value packages were shipped to the poorest zip codes, while only 22% were sent to the wealthiest zip codes, according to UCLA and Yale economists' February research[1].
Moreover, the lowest-income households spent more than triple their share of income on apparel compared to the wealthy households in 2021[3].
Stocking Up for the Uncertain Times
While Scott is bracing for the financial squeeze, 57-year-old consumer rights writer, Phillip Dampier, is knee-deep in Chinese e-commerce sites for over two weeks now. He's snapping up everything, from paper products and kitchen tools to a portable heater, furniture, sheets, and blankets – basically anything you'd find in a JCPenney.
Determined to stockpile for the next two years, Dampier attributes his frenzied shopping to economic instability and premonitions of product shortages reminiscent of the pandemic[4]. Having been a long-time Amazon customer, Dampier started exploring Temu, AliExpress, Shein, and even TaoBao, China’s original e-commerce platform, after becoming disillusioned with Amazon's escalating costs and slipping customer service post-pandemic.
Although Amazon has avoided publicly promoting the same model as Shein and Temu for the time being, there were attempts to display added tariff costs on some items. President Trump, in an intriguing turn of events, reportedly called Amazon founder Jeff Bezos to voice his discontent on Tuesday morning, according to two senior White House officials[4].
Amazon eventually dismissed these suggestions, with a spokesperson stating that it "was never a consideration for the main Amazon site." The president later acknowledged that as a "good call."
Dubious Practices
Shein, Temu, and AliExpress have grappled with criticism related to flimsy product safety, subpar labor protections, and excessive environmental impact[5]. These platforms are also accused of fostering a culture of overconsumption, as customers are incessantly bombarded by a dazzling array of bright colors and enticing coupon offers, ultimately leading to an accumulation of cheap tchotchkes that end up in landfills[5].
However, Scott and Dampier argue that American-made products don't offer a viable alternative. "Whether I go to my local Walmart and buy it... that product was still manufactured overseas in some country where they pay horrible wages, maybe use child labor," Scott contends. Scott further points out that American stores such as TJ Maxx and Ross are equally susceptible to overconsumption[5].
In conclusion, the tit-for-tat tariffs imposed by President Trump have landed American consumers in a tight spot, with the rising prices at Temu and Shein making their lower-priced goods unattainable for many. While Trump believes these tariffs prioritize American manufacturing and business, the skepticism expressed by consumers like Dampier remains widespread.
The article was contributed by CNN's Elisabeth Buchwald, Nathaniel Meyersohn, Alayna Treene, Betsy Klein, and Jordan Valinsky.
Enrichment Data:
Overall:The tariffs imposed by President Trump have struck a significant blow to the competitiveness of Chinese e-commerce sites such as Temu and Shein in the US market. Here are the key insights:
- Price Increases: To offset the higher import costs resulting from tariffs, Chinese e-commerce platforms have been forced to raise their prices. For instance, the cost of running sneakers on Temu surged from around $14 to $27 after the tariffs took effect[2].
- Tariff Surcharges: Higher prices often involve "tariff surcharges" that are applied directly to the customers' bills, making people pay more[2].
- Operational Complexities: Tariffs complicate the operational and strategic planning for companies operating in the e-commerce space, as shifting manufacturing or supply chains can be costly and time-consuming[2].
- Air Freight Demand Impact: The increased tariffs are likely to drastically reduce demand for air freight from China, impacting the volume of cheap merchandise commonly sold by Temu and Shein[1]. This decline in demand could further strain the pricing strategy of these platforms.
In summary, the tariffs have caused prices to escalate for consumers, while also creating operational and logistical challenges for e-commerce companies such as Temu and Shein.
- The tariffs crafted by President Trump have led to a significant increase in prices on Chinese e-commerce sites like Temu and Shein, with running sneakers on Temu surging from approximately $14 to $27.
- The price hikes on these platforms often involve tariff surcharges that are added directly to customers' bills, making it more expensive for shoppers to come across their budget-friendly goodies.
- The operational planning for companies operating in the e-commerce industry, such as Temu and Shein, has become more complex due to the tariffs, as a shift in manufacturing or supply chains can prove costly and time-consuming.
- The increased demand for air freight from China due to the tariffs is expected to decline significantly, impacting the volume of cheap merchandise commonly sold by Temu and Shein, which could further strain their pricing strategy.
- As lower-income families, such as those of Rena Scott, are predicted to be hit hardest by these price increases, some consumers are stocking up on various items, from paper products to furniture, from Chinese e-commerce sites, fearing an era of higher retail costs.
