Shein and Temu, two fast-fashion e-commerce platforms that primarily ship merchandise from China, have been shifting their digital advertising strategies in response to challenges in the U.S. market. Data from market intelligence firm Sensor Tower reveals that in April, both companies significantly increased their ad spending in Europe, particularly in France and the UK. Shein boosted its ad expenditure by 35% in both countries, while Temu increased its spending by 40% in France and 20% in the UK compared to the previous month. This shift in advertising focus comes as both companies face the consequences of U.S. President Donald Trump’s trade ban on de minimis, which previously allowed packages under $800 to enter the U.S. duty-free. The removal of this exemption has impacted Shein and Temu’s ability to offer cheap items, such as $12 dresses and $5 accessories, at competitive prices in the U.S., a market where both brands have thrived.
In anticipation of this trade change, Shein and Temu reduced their digital ad spending in the U.S. during April, opting instead to hike prices. The price hikes are a response to U.S. trade policies that now impose tariffs on these low-cost imports, putting pressure on the companies’ profit margins. Shein and Temu had previously gained significant attention in the U.S. by undercutting established competitors like Zara, H&M, and Gap on price. In addition to the shift in U.S. ad spending, the two companies have ramped up their digital advertising efforts in Europe. In the UK, the increased spending has translated into higher app downloads for both brands, with Shein’s downloads rising 25% and Temu’s increasing more than double. Despite these gains in app downloads, the daily active user growth has been modest, with Shein’s UK active users rising by 5% and Temu’s by 10% month-over-month.
In Brazil, Shein and Temu are also intensifying their advertising efforts, with Shein increasing its ad spending by 140% in April to compete with Temu’s entry into the market. Temu’s ad spending in Brazil is now 800 times higher than the previous year as the company prepares for its official launch in June 2024. This strategy mirrors Shein’s approach when Temu entered the U.S. market in 2022. As both companies adapt their marketing tactics to new international markets, they are attempting to maintain their customer base while navigating the shifting economic landscape and rising import costs.
READ MORE: