Temu, Shein slash digital ads as tariffs end cheap shipping from China, data show

By Arriana McLymore

NEW YORK (Reuters) - Chinese online marketplace Temu and fast-fashion retailer Shein, two of the biggest advertisers on U.S. social media, are sharply cutting their U.S. digital ad spending, industry data show, in a blow to tech companies such as Meta's Facebook and YouTube.

The online retailers, both of which ship low-priced China-made goods direct to U.S. shoppers, had been on an ad spree until recently, targeting younger, thriftier shoppers in digital media.

U.S. President Donald Trump's executive order earlier this month threatens this business. As of May 2, merchandise valued at under $800 shipped from China and Hong Kong will no longer be exempt from tariffs.

Temu and Shein plan to raise product prices next week as the removal of this "de minimis" exemption on import tariffs increases costs for the companies. And they are cutting ad spending on most platforms, according to two digital marketing firms that measure ad spending.

Temu's daily average U.S. ad spend on Facebook, Instagram, TikTok, Snap, X and YouTube declined a collective average of 31% in the two weeks from March 31 to April 13 compared with the previous 30 days, estimated Sensor Tower, which tracks such spending.

Shein's daily average U.S. ad spend on Facebook, Instagram, TikTok, YouTube and Pinterest fell a collective average of 19% over the same period, it added.

Meta declined to comment. Google, Shein and Temu were not immediately available for comment.

Temu has sharply reduced ads on Google Shopping since April 12 after a marked ramp-up during the first quarter, said Mark Ballard, director of digital marketing research at Tinuiti.

(Reporting by Arriana McLymore in New York City; Editing by Richard Chang)