Low-cost online retailer Temu has begun resuming some direct shipments from China to the US following progress in trade negotiations between the two countries last week.
The service, owned by Chinese e-commerce giant PDD Holdings, had shifted to a local fulfilment model with items stored in US warehouses, but some have returned to the company’s US listings in recent days, according to local Chinese media reports.
A retailer from Guangdong province said Temu had relisted two of the women’s clothing items he sells for direct sale to the US last week, while dozens of others remained offline, the South China Morning Post reported.
Uncertain environment
The retailer’s Temu sales are handled on a full-custody model, under which Temu handles all aspects of their sale, meaning that Temu itself had made the decision to relist the items.
The retailer’s items went back on sale on Wednesday, following two days of trade talks in London between the US and China, the Post reported.
As of early May Temu had said it was only selling products in the US that were stored in local warehouses.
A review by Silicon UK found several items listed on Temu’s US homepage that appeared to ship direct from China, including home furnishings and clothing items, while the vast majority were still tagged as coming from a local warehouse.
Temu referred inquiries about the changes to comments made by PDD co-chief executive Chen Lei during the company’s May earnings call in which he said the firm was “working with merchants across regions to bring stable prices and abundant supply to consumers around the world”.
On the call Temu reported a 47 percent year-on-year decline in first-quarter earnings due to slower sales growth, which Chen attributed to “radical change” in international policies that was putting pressure on merchants.
International pressure
Temu and similar app Shein have been hard-hit by unpredictable trade conditions with the US and the EU, two of the major markets for the low-cost items that they previously shipped direct from China.
The US in May ended the de minimis rule that allowed products valued at under $800 (£588) to enter the country duty-free, and has brought in and suspended several rounds of tariffs affecting Chinese exporters.
In response, Temu and Shein have reportedly increased their focus on the EU and the UK, including expanding warehouse capacity and spending more on advertising, according to recent reports from Reuters and CNBC.
But the EU is bringing in a flat-rate 2 euro (£1.70) fee for items worth less than 150 euros that were previously duty-free and is expected to take other regulatory action to curb the unchecked growth of ultra-cheap cross-border commerce, according to Coresight Research.
The wording of an “anti fast-fashion” bill that is currently under debate in the French National Assembly was recently rewritten to single out ultra-cheap platforms such as Temu and Shein, local French media reported.
