As a result of the tariff war, Chinese e-commerce companies Temu and Shein have significantly cut their advertising spending on major online platforms in the United States.
On the 17th, British daily The Guardian and others cited data from global market research firm Sensor Tower, reporting that Temu reduced its advertising spending on Meta, which owns Facebook and Instagram, and X (formerly Twitter) by an average of 31% compared to the previous month over about two weeks from the end of last month to the 13th of this month. Additionally, during the same period, Shein's daily average advertising spending on platforms such as TikTok and YouTube also decreased by 19%.
Mike Ryan, head of e-commerce at online advertising agency Smarter Ecommerce, stated, "Temu stopped all Google Shopping ads in the U.S. as of the 9th."
On the 2nd of this month, U.S. President Donald Trump signed an executive order abolishing the 'de minimis exemption' that exempted tariffs on imports under $800, coinciding with the announcement of reciprocal tariffs. Subsequently, on the 9th, the U.S. government announced it would raise tariffs on small parcels from China from 30% to 90%, and a day later increased them further to 120%.
Some analysts interpret the reduction in advertising spending by Temu and Shein, which rapidly grew in the U.S. after the COVID-19 pandemic, surpassing competitors like Amazon, as a broad impact of the U.S.-China trade conflict. Chinese companies halting advertising on U.S. social networking service (SNS) platforms could cause damage. CNBC reported that Temu was Meta's largest advertiser.
However, James Macdonald of global marketing research firm WARC said that since the brand loyalty of customers for both Temu and Shein is not strong, the advertising cuts will affect sales, adding, "You have to constantly advertise to retain customers."
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