Sensor Tower: Temu's US DAUs fell 52% in May compared to March, while Shein's dropped 25%, amid the US' China tariffs and the closure of “de minimis” loophole
Karen Gilchrist / CNBC :
Context & Ripple Effects
The US pullback follows a period in which both platforms had been expanding sales ahead of the policy change, then cut US digital advertising as the de minimis exemption closed. Payment-card data also recorded a week-over-week sales decline for both retailers in late April.
The divergence in the May user declines matters: Temu’s 52% drop was materially steeper than Shein’s 25% decline. Later Sensor Tower coverage extended the pattern to monthly users, with Temu’s US MAUs falling sharply through June while Shein’s fell less.
First-order effects
- Temu and Shein lose US audience reach just as tariffs and the de minimis closure alter the economics of their cross-border retail model; Temu is the more immediately affected on this measure.
- Lower daily engagement reduces the pool of users available for repeat purchases and paid conversion, compounding the companies’ earlier reductions in US acquisition spending.
Second-order effects
- The sharper Temu decline may force a more selective US marketing and customer-acquisition strategy, while Shein’s smaller decline gives it comparatively more room to defend engagement.
- The contrast with increased April advertising in France and the UK indicates that marketing attention can shift toward markets where the policy burden is less acute.
Third-order effects
- If lower engagement persists, cross-border marketplaces that relied on low-friction small-parcel imports will need to rework US growth economics around compliance, logistics, pricing, or local inventory rather than scale alone.
- The episode points to policy changes becoming a durable competitive variable for consumer platforms: regulatory exposure can reshape user acquisition and market share as much as product assortment or advertising does.
The trend: The larger trend is the repricing of cross-border e-commerce growth as trade and import rules increasingly determine the viability of low-cost marketplace models.