Temu Gets Spooked by Possible TikTok Ban

One China-based app isn’t waiting for US lawmakers to banish it. 

Temu, the e-commerce app that has spent a fortune marketing itself to American consumers, is reportedly starting to hedge its reliance on the US market, sources told The Wall Street Journal. It’s a striking about-face for the company, and one that was reportedly prompted by the US government voting to either ban or force a sale of fellow China-owned company TikTok.

TikTok’s Hand Me Downs

It’s hard to overstate how bombastic Temu’s marketing drive has been. Its ad spend on social media has reportedly made it one of Meta and Google’s biggest clients, and it bought not one but four Super Bowl ads this year. The evidence suggests that the marketing blitz worked, too — arguably a little too well, as Temu and its e-commerce rival Shein have had the same effect on the air freight industry as a lead ball on a rubber sheet.

Temu’s business model — selling a seemingly random assortment of products at low, low, (seriously should they be that low?) prices — is pretty different from TikTok’s, so the question is why should Temu wince when TikTok gets hit? The answer is that Temu and Shein could easily be next on the US-China chopping block:

• The TikTok bill whipped through the US government with relative speed, compared to the pace of most legislation. TikTok has since filed a lawsuit against the US government which is likely to drag on for years, but it was still a shock to the system.
• Temu and Shein were name-checked by US lawmakers last year in a paper that called them “data risks,” as well as highlighting the presence of forced labor in their supply chains.

Sources told the WSJ that Temu is trying to focus its efforts on other countries, and it expects US sales this year to make up a much smaller sliver of overall sales, down from 60% last year to less than 33%.

Why Can’t We Be Friends? While Temu gently backs away from the US, Shein is still trying to charm its way in. CNBC reported that as Shein readies itself to go public on the US market, it’s working hard to join the National Retail Federation (NRF). So far, though, the e-commerce giant’s applications have been repeatedly rejected, sources told CNBC. Maybe Shein doesn’t know the rules, like that the NRF wears pink on Wednesdays.