China's online shopping mall Temu has decided to drastically change its operating methods to avoid U.S. tariffs on Chinese goods. Previously, Temu handled the entire distribution process in consignment from sellers, but it plans to have sellers take direct responsibility for deliveries in the U.S. market moving forward. This is interpreted as essentially shifting the tariff burden onto the sellers.
On the 11th (local time), Bloomberg News reported, citing anonymous sources, that Temu has largely relinquished control over its Chinese supply chain and decided to adopt a 'half-custody' approach that requires sellers to deliver products directly from factories to warehouses in the U.S.
This new system has been introduced since early last year, but it has not yet been made mandatory for sellers. However, it is reported that Temu has expressed its intention to prioritize support for companies that adopt this system. A source noted that Temu plans to transition its entire U.S. operations to this model in the long term.
Temu's new operating method is likely to spread gradually. Although the U.S. has decided to maintain a tax exemption on small goods worth less than $800 (approximately 1.16 million won) imported from China, there is a possibility that U.S. President Donald Trump, who advocates 'America First,' could overturn this policy at any time.
In fact, President Trump decided on the 1st to impose an additional 10% tariff on Chinese imports, prohibiting the application of 'minimum threshold exemptions.' As a result, all products from China became subject to tariffs starting from the 4th, but within just a week, President Trump changed the tax exemption policy for small goods again.
Industry experts are concerned that the shift in Temu's operating methods could lead to increased product prices. Sellers may find it difficult to benefit from 'economies of scale' through Temu's mass shipping and logistics processing, and direct shipping costs are likely to rise due to Trump's tariff policies on China. There are also forecasts that small businesses might effectively withdraw from the U.S. market.
Such changes are likely to significantly affect Temu's market share in the U.S. Temu, leveraging its low prices, once recorded the highest number of downloads for online shopping mall applications in the U.S. However, if product prices increase due to the change in shipping methods, the gap with Amazon, the top online shopping mall in the U.S. with its own logistics and shipping networks, is expected to widen.
As U.S. tariff pressure intensifies, another Chinese online shopping mall, 'Shein,' is also seeking countermeasures. Bloomberg News reported that Shein is offering some Chinese suppliers incentives such as up to 30% higher procurement prices and guaranteed minimum order quantities, and is requesting them to establish new production facilities in Vietnam.
According to Japan's Nomura Holdings, Temu and Shein shipped small parcels worth $46 billion (approximately 65 trillion won) to the U.S. last year. Both companies have actively utilized tax exemption regulations for items priced under $800. Meanwhile, Bloomberg News reported that Temu did not provide an official stance regarding the changes in its operating methods.