Key Takeaways:
- SHEIN increased ad spending by 35% in both France and the U.K. in April, while Temu's ad spending rose by 40% in France and 20% in the U.K., according to Sensor Tower data.
- Temu reduced its digital ad spending by 31% in the U.S. and SHEIN by 19% in the two weeks from March 31 to April 13.
- SHEIN's digital ad spending in Brazil increased by 140% year-over-year in April 2025, while Temu’s Brazilian ad spend surged 800x YoY.
- The eCommerce giants are pulling back in the U.S. and reallocating spend to regions where entry barriers are lower and growth prospects remain untapped.
With tariffs choking U.S. business growth, two Chinese retail giants are redrawing their global strategy.
SHEIN and Temu are aggressively rerouting their digital marketing budgets toward Europe and Brazil in response to recent U.S. import restrictions that disrupt their traditional business models.
In April, SHEIN expanded its advertising investment by 35% in France and the U.K.
Temu, on the other hand, recorded increases of 40% and 20% in the same countries, according to Sensor Tower data as reported by Reuters.
Exclusive: Shein, Temu ramp up advertising in UK and France as US tariffs hit https://t.co/HOM8qof3A0https://t.co/HOM8qof3A0
— Reuters (@Reuters) May 6, 2025
These shifts signal a clear prioritization of Europe’s largest fashion markets, as other regions like Italy and Germany saw relatively modest increases.
The adjustment follows the May 2 cancellation of the de minimis exemption in the U.S., which previously allowed low-value parcels from China to bypass customs duties.
The de minimis exemption allowed shipments under $800 to enter the U.S. without import duties.
The elimination of this benefit has raised import costs significantly for companies whose pricing strategies depend on small, inexpensive shipments.
Sensor Tower reported that U.K.-based installs of both apps increased during the same period.
SHEIN's installations rose 25%, while Temu saw more than a twofold growth.
Despite this, daily engagement showed only slight movement, with SHEIN and Temu gaining 5% and 10% more active users in the U.K. market, respectively.
“Temu has plummeted from a high of #3 to #85 in just two weeks, while Shein dropped from #7 to #80 – a clear signal that the direct-from-China shopping revolution is facing its first real market correction.”https://t.co/CbZ1bCv77fpic.twitter.com/7xMGH6Twud
— Cora Harrington (@CoraCHarrington) April 24, 2025
Performance marketing alone won’t ensure market stickiness.
SHEIN and Temu’s case highlights a broader risk for brands overly reliant on paid acquisition.
When installs outpace engagement, it signals that users are intrigued by promotions but lack a compelling reason or incentive to return.
To convert one-time browsers into habitual customers, companies need to invest in building brand equity, local relevance, and community engagement.
This includes initiatives like regionalized content, influencer partnerships, loyalty programs, and responsive customer support.
These are all tools that foster emotional connection and keep cost-per-acquisition sustainable over time.
Tariffs In, Growth Out
As tariff pressure mounts in the U.S., the dominant players in fast-fashion e-commerce have sharply reduced their advertising exposure in the country.
Temu’s digital marketing outlay on platforms like Facebook and TikTok fell by nearly a third, and SHEIN scaled back by just under 20% in early April, according to Sensor Tower.
Brazil is emerging as the next key battleground.
Ahead of Temu’s planned June market entry, its April ad spend in the country surged to 800 times the amount spent the previous year.
So where is all this coming from?
— Similarweb (@Similarweb) April 22, 2025
Temu is betting big on Brazil. Traffic to Temu Brazil has nearly tripled in the past few days, with paid search growing 5x faster than organic.
At this pace, Temu Brazil is on track to surpass the U.S. traffic volume from before the tariff… pic.twitter.com/lh9hnyPwK6
In a direct counter, SHEIN boosted its own spending in Brazil by 140%, reinforcing its early foothold through local production facilities.
The two rivals — often outpricing brands like Zara, H&M, and Old Navy — are realigning priorities as customer acquisition costs rise in the U.S.
However, their ability to replicate success in other regions remains to be seen.
The fast-fashion giants "probably won’t be able to gain as many customers as they were,” Kimber Maderazzo, a marketing professor at Pepperdine Graziadio Business School, told Reuters.
She also noted that both are shifting from aggressive expansion in the U.S. to retention and foreign market growth.
The emerging strategy reflects a broader reality: as policy and market conditions tighten in the U.S., global adaptability, not just pricing, will dictate long-term viability.
The shift in SHEIN and Temu's advertising strategies is evidence of the broader impact of U.S. trade policies on global eCommerce.
It has prompted companies to reevaluate market priorities and adapt to evolving international trade dynamics.
