Temu and Shein, two companies that sell low-cost items made in China directly to US consumers, are cutting their spending on social media advertising in the United States. This decision comes as a result of losing an exemption on tariffs for many of their shipments from China and Hong Kong.
Up until recently, the online retailers had been heavily spending on advertisements. However, due to an executive order from Donald Trump, sales valued at less than $800 will now be subject to US tariffs beginning on 2 May.
Temu and Shein plan to raise their product prices starting next week due to the removal of the “de minimis” exemption, which will increase their costs. As a result, they are reducing their advertising expenses on most of the platforms, as reported by two digital marketing firms.
Sensor Tower reports that Temu’s daily average US ad spend on Facebook, Instagram, TikTok, Snap, X, and YouTube dropped by a collective average of 31% in the two-week period from 31 March to 13 April, compared with the previous 30 days.
During the same period, Shein’s daily average US ad spend on Facebook, Instagram, TikTok, YouTube, and Pinterest declined by a collective average of 19%.
According to Mark Ballard, director of digital marketing research at Tinuiti, Temu has significantly reduced its ads on Google Shopping since 12 April.
Meta chose not to comment, while Google, Shein, and Temu were not immediately available for comment.
With Reuters
