- The elimination of the $800 "De Minimis" exemption means that low-cost Chinese products will now face higher tariffs, leading to price hikes.
- Shein and Temu, two platforms heavily reliant on influencer marketing, must adjust their strategies in light of these new costs.
- Influencers may find themselves adjusting content and partnerships, potentially working with higher-value brands as a result of the tariff increases.
Recent changes to U.S. trade policy, especially the introduction of a 145% tariff on Chinese imports and the elimination of the "De Minimis" exemption for low-value shipments, have started to ripple through the e-commerce landscape.
The new tariffs are particularly impactful for Chinese e-commerce platforms like Shein and Temu, which have grown rapidly due to their ability to offer low-cost products with minimal import duties. Now, with these tariff increases, these platforms are forced to raise prices, creating a shift in the way they market to U.S. consumers, including how they collaborate with influencers.
The De Minimis Rule and Its Impact on E-Commerce
The "De Minimis" rule has been a cornerstone for many small businesses and individual consumers, including influencers. Under this rule, goods valued at $800 or less entering the U.S. from overseas were exempt from tariffs, making it easier and cheaper for platforms like Shein and Temu to sell affordable products in the U.S. market.
However, this exemption is set to end on May 2, 2025, meaning that goods from China valued under $800 will now be subject to tariffs. Just last year, more than 1.4 billion packages entered the United States under the De Minimis rule.
With the new tariffs applying to small-value packages, prices will rise for both consumers and businesses that rely on Chinese suppliers, especially those working with influencers to promote products.
These changes are expected to have a significant impact on Shein and Temu, which have built their business models around providing inexpensive products. Without the tariff exemption, these platforms will face increased operating costs, leading to price hikes that could affect both their market position and their ability to engage in influencer marketing.
The Effects on Shein and Temu’s Pricing Strategy
Shein and Temu, known for their ultra-low prices, have warned of upcoming price hikes due to the recent changes in U.S. trade policy. The imposition of a 145% tariff on Chinese goods, combined with the removal of the De Minimis exemption, is set to drive up the cost of importing products from China.
In an almost identical statement, the two e-commerce giants marked April 25th as the date for these "price adjustments." Their statements also encourage customers to shop on their platforms before this date, saying:
The tariff changes will likely make goods more expensive for U.S. consumers, which could undermine the appeal of these platforms, especially for those who are drawn to their affordable pricing.
As prices increase, Shein and Temu will likely face a reduction in demand, especially among budget-conscious shoppers who have made these platforms popular. In fact, both platforms have already seen a decline in their app rankings, with Temu dropping to the 75th spot on the U.S. Apple Store, down from its consistent top-five ranking, and Shein falling to 58th from number 15.
This pricing shift is also expected to impact influencer marketing strategies.
In the past, influencers could rely on affordable products from Shein and Temu to cater to price-sensitive audiences. However, with rising costs, influencers may need to adjust their approach, focusing on the value and quality of products, even at higher prices.
As Temu and Shein scale back on advertising spending, with Temu’s social media ad spend falling by 31% and Shein’s dropping 19%, influencers might find themselves partnering with brands offering fewer low-cost products.
Influencer Partnerships in a Changing Landscape
For brands working with Shein and Temu, the tariff changes pose new challenges. These platforms have been major players in influencer marketing, using collaborations to reach wide audiences with affordable products.
However, as prices increase, brands will face the task of justifying the higher costs to their customers while maintaining authentic and relatable content.
While some brands may continue working with these brands, others may find themselves shifting toward higher-value collaborations with influencers that align better with the new market dynamics. As platforms like Shein and Temu adjust their product pricing and marketing strategies, brands will need to reassess the products they promote and the partnerships they forge to stay relevant in a competitive space.
As the price gap between Shein, Temu, and other low-cost brands narrows, premium brands may find an opportunity to collaborate with influencers more frequently. These brands, which have higher profit margins, can absorb the increased tariffs and offer higher-quality products to influencers and their audiences.
For influencers, this creates an opening to collaborate with higher-value brands, potentially resulting in more lucrative partnerships and a shift toward quality over quantity. This transition could also lead to more strategic content that resonates with a broader, more engaged audience.
On the flip side, these changes could result in fewer collaboration opportunities.
Long-Term Implications for E-Commerce Platforms and Influencers
Looking ahead, the elimination of the De Minimis exemption and the rise in tariffs will reshape the global e-commerce landscape, forcing both brands and influencers to adapt. E-commerce giants like Shein and Temu will have to reconsider their pricing strategies and marketing approaches, especially when it comes to influencer collaborations.
On the influencer side, those who can pivot and form partnerships with premium brands may find themselves in a stronger position to thrive in the evolving market.
As these changes unfold, influencers will need to focus on building long-term relationships with brands, with an emphasis on authenticity and strategic partnerships. By adapting to this new landscape, influencers can continue to succeed and generate content that resonates with their audience, while brands can tap into the growing potential of influencer-driven marketing.
