Shoppers have started avoiding Temu and Shein after President Trump imposed significant tariffs on Chinese imports. Instead, they’ve turned their dollars toward US department stores like Nordstrom Rack and Kohl’s.
Data from Consumer Edge shows that, while Temu initially saw a surge in spending growth from US customers in April, it dropped sharply from nearly 50% year-on-year growth at the month’s start to almost zero by the end.
Shein’s growth also slowed, decreasing from 30% to 20% in the same period as US consumer spending declined drastically.
This downturn isn’t really surprising. Trump ended a De Minimis exemption in early April, a trade loophole that allowed both Temu and Shein to bypass taxes on low-value packages shipped to the US.
As a result, they faced an overnight 120% tariff, leading many retailers to raise their prices and halt shipments of Chinese goods. Fortunately for consumers, the White House later reduced the rate to 54%.
Between early April and the end of the month, shoppers who previously used Temu and Shein increased their spending at Nordstrom Rack by 21% compared to last year, according to Consumer Edge. This growth outpaced Nordstrom Rack’s overall spending increase.
Many of these shoppers were initially drawn to department stores for their affordable options from Temu and Shein, but recently, interest has waned across various brands.
Consumer Edge notes that former Temu and Shein customers made several purchases on those Chinese sites earlier this year but ceased shopping in March and April, redirecting their spending to Bloomingdale’s, Old Navy, and Kohl’s during that three-week period.
In fact, they spent 52%, 12%, and 6% more at these retailers compared to the previous year, surpassing the overall spending growth rate for all customers.
Like Temu and Shein, these department stores offer a wide variety of products—apparel, footwear, beauty items, furniture, and kitchenware—all in one location. As one expert pointed out, “There’s a huge selection and many different brands available.” It’s somewhat reminiscent of how these shoppers used to browse Temu.
Additionally, many shoppers are increasingly turning to fashion subscription services, where they can rent luxury clothing at reduced prices. Former Temu and Shein shoppers reportedly spent over 59% more on Nuuly, a subscription service associated with Anthropologie.
They also increased their purchases at thrift stores, with spending climbing 45% at second-hand retailers.
This trend in spending seems to reflect a desire for budget-friendly options. “I want a diverse wardrobe without breaking the bank,” one shopper noted.
Meanwhile, there’s a noticeable 42% increase in spending on DHGATE.com, which connects buyers with wholesalers in China, often using TikTok to promote products to US consumers.
As for the future, it’s uncertain whether this shift away from Temu and Shein will persist. Much depends on consumer sentiment in the weeks ahead and whether those 54% tariffs stick, as noted by Gunther.
Moreover, although the White House temporarily reduced the 30% tariff on Chinese goods from 145% over the past three months, any increase could make overseas clothing pricier, which might deter shoppers from department stores.
