- Trump’s Executive Order ending de shipments de minimis damages Shein and Temu.
- Companies have prepared for changes fulfilling more orders in the country in recent years.
- Experts say shein’s success and TEMU relies on low prices, not on de -minimis deliveries.
Shein and Temu will not meet an early end due to de minimis changes, say e -commerce experts.
The world of logistics has been waiting for changes in the exclusion of De Minimis for a while, and both Chinese e -commerce players have made some changes to their fulfillment strategies that experts say can help return the blow.
Temu and Shein disrupted the e -commerce industry in part by avoiding paying duty to deliveries through a customs law provision called Section 321, also known as de minimis. These shipments came to the plane directly from China and were able to use the provision of section 321 because they were estimated at less than $ 800 each.
The Trump executive order issued on February 1 effectively closes that gap for goods originating from China.
“This will certainly have an impact, but it is much smaller than people think,” Alex Yancher, CEO of passport, a startup that helps brands to sell globally, Business Insider.
Going local
Shein and TEMU are mainly prepared for DE minimum disruption having more orders fulfilled in the US
While most of its orders were still coming to the planes from China, Shein began to fulfill more of them from the US warehouses in 2022 and 2023, according to data from Importgenius reported Reuters. Shein opened her first US -based dump in Whitestown, Indiana, in 2022, and in 2024 she opened an office in Bellevue, Washington, to serve as a center for his US fulfillment and logistics operations.
TEMU also began to allow SH.BA -based sellers to sell in its market in 2024. This newest model allowed sellers with warehouses in the US to handle fulfillment and logistics, creating orders that will not They needed to cross the borders before they made their way to clients.
Products from those sellers are assigned with a “local” symbol on their ranking page and search results.
There is ‘RIP TEMU and RIP Shein’, experts say
Fulfillment of orders in the country in the US is a departure from the way Shein and Temu began. But e -commerce experts say they do not ruin the main leaders of their success: ultra low prices and very fashionable articles.
In particular, Shein has a unique model in which partners directly with manufacturers to create small bundles from the most sought after items. This model has allowed it to test the consumer appetite and return clothing patterns within a few weeks.
Shein’s production model is at the core of what has made the company successful, not its confidence in de -minimi remittances, said Kirth Kalyanam, a professor and executive director of the Institute of Retail at the Leavey Business School of Business at Santa Clara University.
“Now that the De Milky Transport has been strengthened or turned off or turned off, I expect whatever advantage of the price they have due to the de minimis transport disappear,” Kalyanam said. “But that does not mean their other skills will leave.”
Juozas Kaziuknas, founder and CEO of the Pulse Pulse Intelligence Firm echoed this feeling: “I continue to see ‘RIP TEMU and RIP Shein’ everywhere because of the De minimis changes, but while de minimis helped temp and Shein to get here, what disappears will not be the end of anyone. “
Representatives for Shein and Temu did not return Bi’s requests for comment. Both companies have previously said that they are not relying on De Minimis to increase their business.
However, clients can see higher prices and longer transport times.
“The cleaning of the minimum was very simple – almost an electronic data exchange that theoretically costs between five and 10 cents per shipment,” said Derek Loss, the founder of the Cirrus Advisors Global Cirrus Chain. “With a more official cleaning now required, which will add friction to the process and cost.”
Customs and US border protection said in a January press release that de -minimis deliveries increased by more than 600% between 2015 and 2023, ranging from 139 million per year to more than 1 billion. More than 1.36 billion shipments were sent via de minimis in 2024, according to CBP.
While the world of logistics has been waiting for some time for some time, many were surprised by the speed with which it came into force. Instead of a few months to fix their supply chain operations to meet any possible policy changes, they had days.
The global trade situation continues to evolve quickly. Tariffs for goods from Canada and Mexico have been paused, while those with goods made by the Chinese have moved forward. On Tuesday evening, the United States Postal Service said it would no longer accept parcels from China and Hong Kong “until further announcement”. Until Wednesday morning, USPS had turned the course back.
“USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for China’s new tariffs to ensure the smallest interruption to distribute packages,” reads an announcement on the USPS website .
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