News - Amazon 'Snatches' Temu and SHEIN Users, Benefiting a Batch of Chinese Sellers

Temu’s Dilemma in the U.S.
According to the latest data from consumer analytics firm Consumer Edge, as of the week ending May 11, spending on SHEIN and Temu decreased by over 10% and 20% respectively.
This sharp decline was not without warning. Similarweb noted that traffic to both platforms began to decline steadily after the tariff policy was announced in April.
Delving into the reasons, the tariff policy directly increased operational costs. Although both companies briefly attempted to pass on costs through price increases, they quickly retracted those decisions to avoid further loss of consumers.
Similarweb analysts pointed out that growth for both companies had already significantly slowed in the first quarter of 2025, but the tariff shock became the last straw that broke the camel’s back.
Data shows that after the announcement of the tariff policy, consumer shopping patterns shifted rapidly. E-commerce platforms like TikTok Shop and Dhgate experienced a short-term surge in consumption, while established platforms like SHEIN and Temu faced long-term structural changes.
Ben Parkes, a retail consulting analyst at Similarweb, commented, “The U.S. market is set for a reshuffle, and the consumption levels of SHEIN and Temu are unlikely to recover to previous highs.”
In this context, Amazon has become the biggest beneficiary of the shift in fast fashion consumption. Parkes noted, “Existing clothing sellers on the Amazon platform are experiencing explosive growth as they strengthen their category layout.”
Amazon Sellers Benefit
Relevant data indicates that Amazon’s women’s clothing category has grown by over 26% in the past six months, with three out of the top five brands being Chinese third-party sellers utilizing Amazon’s logistics network. Furthermore, 92% of women’s clothing on the Amazon platform comes from third-party sellers.
These stores generally use Amazon FBA logistics, which helps them avoid tariff risks while ensuring timely delivery.
For instance, a women’s clothing brand from Shenzhen, which originally sold simultaneously on SHEIN and Temu, shifted to Amazon FBA due to the tariff impact.
“Although operating costs increased after joining Amazon, in the long run, it is more beneficial for the brand’s future development,” said the brand’s representative.
A trade and industry integration company from Hangzhou also stated that after switching to the FBA model, their actual gross margin was not significantly affected. Currently, their brand ranks among the top twenty in women’s clothing, with a daily shipment volume exceeding a thousand items.
However, some clothing category sellers expressed differing views on the sudden influx of traffic. Many clothing companies have started to enter Amazon in bulk after seeing the opportunity, which is likely to spark another price war in the already competitive women’s clothing category, further squeezing profit margins for related sellers.
In contrast, the men’s clothing category presents a different picture—its growth over six months was only 4%, with no Chinese sellers among the top brands, and third-party sellers accounting for 57%. Parkes added, “The long-term trajectory is unclear, but women’s clothing consumption is clearly shifting to Amazon.”
Amazon has clearly sensed the opportunity. It announced an extension of its Prime Day from two days to four, seen as a precise strike during the weak period for fast fashion. An anonymous Amazon third-party seller revealed that the platform is actively recruiting cross-border sellers with fast fashion experience and providing traffic support policies.
Industry insiders analyze that Amazon aims to capture market share during the vulnerable period of SHEIN and Temu.
However, the market benefits have not been solely monopolized by Amazon. Consumer Edge data shows that fast fashion brands like ASOS and Zara have also benefited from the spending shift of former SHEIN/Temu users.
In addition, discount retailers like Ollie’s Bargain Outlet, sports brands like Columbia and Foot Locker, department stores like Bloomingdale’s and Nordstrom Rack, as well as youth apparel brands like Aeropostale and American Eagle have all seen share growth.
Expanding Beyond the U.S.
Faced with their predicament, SHEIN and Temu have not chosen to sit idly by.
Parkes predicts that companies like Temu will initiate the development of local supply chains in the U.S.: “The biggest transformation in the American fashion industry lies in the supply chain. Previously, they relied on the lowest de minimis threshold policy to ship in small packages, but this model is now facing challenges.” When Temu retracted its tariff price increase plan, it stated that it would absorb costs by shifting to a localized fulfillment model.
Meanwhile, both platforms may have redirected their marketing budgets to markets outside the U.S. Consumer Edge data shows that in the first three weeks of May, Temu’s sales in the EU surged over 60%, compared to a 40-50% increase in March and April.
By country, France saw the most rapid growth (over 100% month-over-month in May), likely related to increased local advertising. SHEIN’s sales in the EU grew nearly 20% in May (compared to low double digits in April), with the UK market showing a year-on-year growth of nearly 50%.
Analysts pointed out, “Both companies are actively promoting regional diversification, possibly in preparation for escalating trade friction. These growth trends may continue or even accelerate, but ultimately depend on the regulatory environment in Europe.”
However, they emphasized, “The U.S. remains the core market. Growth in Europe cannot offset the decline in the U.S.; the overall situation is not optimistic for them.”
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