Shein, Temu Shift Ad Budgets to Europe, Cut Spending in US

E-commerce platforms Shein and Temu have increased their digital advertising investments in Europe while reducing spending in the United States amid new import restrictions.

According to market intelligence firm Sensor Tower, Shein raised its digital ad spending in France and the United Kingdom by 35% in April, while Temu increased spending in those countries by 40% and 20%, respectively. The data, shared exclusively with Reuters, also shows a broader strategic shift across European markets, including Germany, Italy, and Spain.

The increase in European marketing efforts comes as both retailers adjust to changes to the United States' de minimis trade rule. The exemption, which previously allowed packages valued under US$800 to enter the United States duty-free, no longer applies. The exemption played a key role in the rapid expansion of both companies in the United States, where they have sold low-cost items such as US$12 dresses and US$5 accessories.

Temu, operated by China-based PDD Group, and Singapore-headquartered Shein have begun reducing their ad presence in the United States. Temu’s daily average spending on platforms like Facebook, Instagram, TikTok, Snap, X, and YouTube declined by 31% between Mar. 31 and Apr. 13, compared with the previous 30-day period. Shein’s United States spending on similar platforms dropped by 19% over the same timeframe.

In the United Kingdom, the companies’ increased ad spending is translating into higher app downloads. Shein saw a 25% rise in downloads in April, while Temu’s downloads more than doubled. However, monthly growth in daily active users remains modest, with Shein up 5% and Temu up 10%.

Year-over-year, Temu increased its ad spending in France by 115% and in the UK by 20%. Shein increased its ad spending by 45% in France and 100% in the United Kingdom compared to April 2024.

Beyond Europe, both firms are also expanding efforts in Latin America. In Brazil, Shein boosted its digital ad spending by 140% year-over-year in April, in part to compete with Temu’s market entry. Temu’s April ad spending in Brazil was estimated to be 800 times larger than in the same period last year, according to Sensor Tower analyst Kara Lee.