The Chinese-owned shopping platform Temu has experienced a dramatic collapse in its U.S. advertising presence and app store performance following the implementation of severe tariffs on Chinese imports. Once dominating American digital advertising spaces with aggressive promotional campaigns featuring ultra-low prices, Temu has virtually disappeared from major advertising platforms, including Google Shopping, Facebook, and Instagram.
The company’s retreat began in early April when President Trump imposed sweeping tariffs reaching as high as 145% on Chinese goods, fundamentally disrupting Temu’s business model that relied on shipping inexpensive products directly from Chinese suppliers to American consumers. This dramatic shift has transformed Temu from a digital advertising powerhouse into a cautionary tale of how geopolitical tensions can rapidly reshape e-commerce strategies.
Data from performance marketing firm Tinuiti reveals the scale of Temu’s advertising withdrawal: the platform’s share of U.S. Google Shopping ad impressions plummeted from 19% on March 31 to zero by April 12. This represents one of the most dramatic advertising retreats by a major e-commerce platform in recent memory. The company’s daily advertisement placements on Google crashed from between 30,000 and 60,000 ads to just 14, while its presence on Meta platforms, including Facebook and Instagram, similarly evaporated.
The consequences have been immediate and severe. Temu’s ranking on Apple’s App Store fell precipitously from the top 5 to 58th place within just three days of pulling its Google Shopping ads. App downloads have plummeted by 62%, while the platform that once held the number one position among free applications has seen its daily U.S. users drop by 58% in May alone. This dramatic decline illustrates how heavily dependent modern e-commerce platforms have become on paid advertising for maintaining visibility and user acquisition.
Tariff Impact Reshapes Business Strategy
The tariff implementation has forced Temu to fundamentally restructure its operations. The company posted notices warning customers about inevitable price increases, stating that “due to recent changes in global trade rules and tariffs, our operating expenses have gone up”. Products that once sold for as little as 50 cents now face significant markup pressures due to the tariff burden.
The elimination of the de minimis rule, which previously allowed goods under $800 to enter the U.S. duty-free, has particularly impacted Temu’s model. This regulatory change, combined with the 120% tax on small parcels from China, Hong Kong, and Macau, has made direct shipping from Chinese suppliers economically unfeasible for many products.
Sales Performance Deteriorates Despite Tariff Relief
Despite a temporary tariff reduction from 145% to 30% announced in May, Temu’s performance has continued to decline. Weekly sales dropped by over 25% from May 11 to June 8 compared to the previous year, while customer growth fell from 37.5% year-over-year in January to just 8.8% in May. Most concerning, sales growth turned negative at -15.7% in May after posting 14.4% growth in January.
Strategic Pivot to Domestic Fulfillment
In response to these challenges, Temu has attempted to pivot its strategy by shifting to domestic fulfillment, announcing that “all sales in the U.S. are now handled by locally based sellers, with orders fulfilled from within the country”. However, this strategic shift has yet to reverse the platform’s declining fortunes, as evidenced by continued poor performance metrics through June.