Temu and Shein are pivoting to Europe as their business in the U.S. takes a major hit from unfavorable trade policies. But the China-founded budget e-commerce apps may not receive a warm reception in their new target markets.
In recent weeks, complaints have been filed against Temu and Shein in the EU, accusing them of unsavory business tactics. That comes as the bloc prepares a new two-euro flat fee on previously customs-free small packages from online marketplaces like Temu and Shein.
Experts say the new developments could be ominous signs for the platforms, as their business has already suffered from the May closure of a small package tariff exemption in the U.S., as well as new duties at 54%, or $100 for those sent through the postal service.
“As regulatory and trade pressures intensify in the U.S., Temu and Shein are increasingly turning to Europe and the UK as critical growth markets,” Anand Kumar, associate director of research at Coresight Research, told CNBC.
However, Kumar said that the companies have begun to face regulatory headwinds in Europe and the U.K. that echo the scrutiny they’ve encountered in the U.S.
