SHEIN and Temu concede U.S.: What’s actually happening on the ground

A recent Marketplace Pulse article declared that “Temu and SHEIN are conceding US market share,” pointing to declining app downloads and reduced advertising presence. But what’s really happening with sellers on these platforms? 

SHEIN launched their 3rd-party marketplace in May 2023 and Temu launched their marketplace in September 2022. Threecolts services tens of thousands of multichannel sellers, with many choosing to sell on SHEIN and Temu. 

Current platform dynamics

SHEIN’s 3P model remains stable despite regulatory headwinds. While growth has slowed from its pandemic peak, sellers continue generating consistent revenue on the platform.

Temu sellers show increasing anxiety but aren’t abandoning ship. Download metrics and app store rankings have declined following recent tariff announcements, creating uncertainty among sellers.

Both platforms face similar challenges:

• Increased Section 301 tariffs on Chinese imports
• Growing regulatory scrutiny over data practices
• Rising competition from established retailers entering the ultra-discount space

What sellers are actually doing

Rather than platform exodus, sellers are adapting. Our client data reveals three primary response patterns:

1. Supply chain diversification

A premium men’s accessories brand (active on both SHEIN and Temu) is rapidly exploring alternative sourcing markets:

• Signed a 2-year manufacturing contract with a Noida-based (India) socks producer
• Actively establishing partnerships in Vietnam to reduce China dependency

They reported 15-20% longer lead times from Chinese suppliers since January, so this diversification was already underway. The diversification accelerated as tariff concerns mounted.

2. Platform-specific pricing strategies

A popular denim brand is evolving their pricing approach to SHEIN’s discount-driven marketplace:

• Recently discontinued participation in standard discount promotions
• Implemented a 10% base price increase paired with 10% promotional discounts
• Maintained promotional visibility while preserving margins against tariff impacts

3. Controlled inventory allocation

A major beauty brand on SHEIN demonstrates the third major adaptation:

• Limiting inventory exposure on any single platform
• Implementing SKU-level profitability analysis to determine platform-specific assortments
• Dynamically adjusting pricing to maintain margins alongside platform requirements

Platform-specific trends

SHEIN

• 3P seller program continues to operate with relative stability
• Existing sellers report consistent order volumes
• Platform promotions and selling parameters remain largely unchanged

Temu

• Sellers are panicking, becoming skeptical, and avoiding subscriptions
• App store ranking has declined following tariff announcements
• Reduced advertising activity visible across digital channels

What this means for sellers

If you’re selling on these platforms or considering expansion, focus on these actionable strategies:

1. Implement geographic supply chain diversity.

• Target 60-70% maximum sourcing from any single country
• Establish relationships with manufacturers in at least two alternative regions
• Factor longer lead times into inventory planning

2. Develop platform-specific pricing models.

• Create margin buffer zones to accommodate platform requirements
• Calculate platform-specific net margins including all fees and tariffs
• Remove or reposition SKUs falling below 20% net margin

3. Monitor platform health metrics.

• Track app download rankings weekly
• Monitor platform-wide promotions and advertising frequency
• Evaluate shipping timeframes for potential fulfillment issues

4. Adjust inventory allocation accordingly.

• Limit inventory exposure on platforms showing warning signs
• Test inventory allocation formulas that incorporate platform risk metrics
• Establish inventory redeployment contingency plans

Conclusion

Headlines about SHEIN and Temu losing market share tell only part of the story. The reality for sellers is more nuanced—focused on adaptation rather than abandonment.

As we continue working directly with sellers across these marketplaces, we’ll provide updated guidance on performance metrics and best practices for navigating these evolving platforms.

Looking to sell on SHEIN? Get started here.
Looking to sell on Temu? Get started here.