Daxue Consulting’s Post

Temu’s rapid growth: Can its low-cost approach sustain and overcome regulatory risks? ⭐️ Temu is a Chinese online shopping platform owned by PDD Holdings, the multinational conglomerate that owns discount shopping app Pinduoduo. Founded in 2022, its popularity exploded worldwide, with over 337 million downloads in 2023 alone. 🤩 Temu is largely known for its low-price and discounts, with its tagline “shop like a billionaire” highlighting the lavish yet budget-friendly shopping experience. 🚧 Temu is putting pressure on Amazon. While it is not as large as Amazon, however, its influence cannot be overlooked. In fact, in November 2024, Amazon beta launched Haul, a service that allows people to buy an extensive haul of items at low prices. 🚨 However, Temu may face regulatory risks like in the United States. In September 2024, the Biden administration announced it will crackdown on the “de minimis exemption”, which is a policy that exempts of duties and loosens customs checks on packages worth less than USD 800. If implemented, the prices of products from Temu are likely to increase, weakening its competitive advantage. Moreover, Donald Trump has proposed a 60% tariff on goods imported from China. Check out our full article on Temu: https://lnkd.in/gF-sZxnq #Temu #Pinduoduo #Ecommerce #ConsumerTrends #DaxueConsulting #DaxueStories #ChinaMarket #China

Instead of regulatory change, responsible consumption sentiment, and basic common sense to counter the ultra-fast-consumption craze, Amazon is also jumping on the bandwagon. The company is launching a new discount section to compete with Temu and Shein, offering ultra-low-cost goods directly from China and targeting items under $20. The initiative mirrors the business models of Temu and Shein, leveraging the de minimis rule to avoid import tariffs. Because that's what the world needs—more ultra-cheap products manufactured in questionable conditions and materials to be flown for brief use from halfway across the world. 🤦♀️ https://lnkd.in/dXKgiTTH

The EU is turning up the heat on platforms like Temu, Shein, and AliExpress. Here’s what’s on the table: 👉Taxes on platform revenues. 👉Admin fees for each item. 👉Scrapping duty-free imports. Why? Local businesses are struggling to compete, unsafe products are sneaking in, and customs are drowning in over 4 billion small packages this year alone (eMarketer) If these changes go through - and it’s looking likely - they’ll shake up the market. Platforms might lose their price edge, local retailers could get a boost, and other regions might take notes. What do you think - a necessary shift or too much red tape?

🌐 **Cross-Border E-commerce News Digest** 🌐  📅 May 16, 2024, Thursday   1. Temu and AliExpress signed a voluntary agreement with the Korea Fair Trade Commission. #Temu #AliExpress   2. Amazon Australia introduces new "Five Big Benefits" for sellers. #AmazonAustralia   3. The US announces additional 301 tariffs on Chinese products. #US #tariffs   4. Amazon AWS plans to invest €7.8 billion in Germany by 2040. #AmazonAWS #investment   5. The Ministry of Commerce will host the "Russia E-commerce Day" event from May 15th to 18th. #MinistryOfCommerce #ecommerceday   6. Newegg launches a new online store for college students. #Newegg   7. ShipTime announces a new partnership with Uber. #ShipTime #Uber   8. Alibaba's financial report: Over 70% of orders on AliExpress are fully or semi-managed. #Alibaba #AliExpress   9. German domestic online retail platform Otto establishes a new logistics center in Poland. #Otto   10. Sea freight rates from China to the US surged nearly 40% in a week. #shippingrates   11. US April PPI rose by 2.2% year-on-year. #PPI   12. France secures €15 billion investment from Microsoft, Amazon, Pfizer, and others. #France #investment   13. AliExpress expands cooperation with leading logistics companies in South Korea. #AliExpress   14. New Zealand's CPI grew by 3.7% year-on-year in the first quarter. #NewZealand #CPI 📈  

Finally! The US Government is taking action to close a loophole benefiting overseas e-commerce sellers over US counterparts. This article is highlighting SHEIN and Temu, but let's not forget about the thousands of overseas Amazon sellers that have an unfair advantage over US sellers. The move aims to level the playing field and benefit US sellers that face taxes and tariffs, unlike overseas sellers who bypass these fees. The White House estimates that there has been a surge in de minimis shipments from 140 million to over a billion over the last decade, finally prompting this overdue change. #ecommerce #amazon #import #ustrade Read more: https://lnkd.in/ga4D4y7c

So de minimis now takes on a new meaning: de maximus. The much-maligned loophole in U.S. customs regulations that facilitates duty-free and inspection-free entry of millions of direct-to-consumer shipments to American consumers from China just got a whole lot more complicated. Now Amazon is entering the fray. For traditional retailers -- your traditional business model will be under renewed pressure. For domestic manufacturers -- get ready for the flood. According to the Financial Times, Amazon "seeks to mirror cut-price rivals’ business model of direct-from-China offerings ... planning to fight back against rising competition from rivals Temu and Shein, mirroring their business models with a new direct-from-China discount section." It's an OMG moment. #deminimis #apparel #tariffs #loophole #textiles #dropshipments #DTC #consumers

How Could Trump’s Policies Impact Amazon FBA Sellers? The policies of former President Donald Trump had a significant impact on e-commerce and Amazon FBA sellers, especially around trade, tariffs, and regulations. If similar policies were reintroduced, here’s how they could affect FBA sellers in the USA: 1️⃣ Increased Tariffs on Imports: Higher tariffs on imports from China could raise inventory costs, pushing sellers to explore alternatives like sourcing from Vietnam, India, or Mexico. 2️⃣ Supply Chain Disruptions & Shipping Costs: Regulatory pressure on Chinese imports could cause delays, increased inspections, and even higher freight costs, complicating inventory planning. 3️⃣ Sales Tax Compliance: Reintroduced policies could intensify state-level sales tax requirements, adding compliance costs for small Amazon sellers. 4️⃣ Encouragement for Local Manufacturing: If “Made in the USA” policies gain traction, sellers may be incentivized to source domestically, potentially cutting tariffs but raising production costs. 5️⃣ E-commerce & Data Regulations: Stricter data privacy and e-commerce regulations could limit targeted advertising, impacting sellers’ ability to reach audiences effectively. 6️⃣ Consumer Sentiment Shifts: An “America First” mindset could drive demand for locally-made products, making product labeling and domestic sourcing more important. Amazon sellers need to stay agile by monitoring trade policies and adjusting sourcing, pricing, and logistics to stay profitable in changing conditions. #AmazonFBA #Ecommerce #SupplyChain #TradePolicy #MadeInTheUSA #AmazonSellers #Logistics #Tariffs #SalesTax #ConsumerTrends

Fake products still being sold in Japan During initial calls with clients, the question always arises: Why is Japan import compliance so strict? The answer is simple: to ensure foreign sellers follow the same rules as local sellers, including compliance with ingredients, labeling, manufacturing practices and taxes. The majority of Japan's compliance is focused on consumer safety. Since October 1, 2023, Japan has been rolling out new rules and enforcing those already introduced, slowly eliminating cross-border fulfillment for e-commerce D2C. Many argue this is a step backwards, but I disagree. I've witnessed hundreds of illegal tunnel companies cheating taxes leave the market over the past 5 years. Good riddance, I say. If your business model relied on cheating, it was never a real business. I'm also witnessing the reduction of fake products on the market. Unfortunately, as long as cross-border remains unchecked, it will continue. There has been improvement and it will continue as Japan tightens the noose of import compliance and enforcement. Requiring sellers to fulfill within Japan also means adhering to Japan's regulatory compliance. The reduction of fake products on the market is a good sign, but there is still work to be done. Consumers can reduce their risk by purchasing from the brand's web store or brand marketplace store. If you still prefer a reseller, make sure your order is fulfilled from within Japan. Image reference: last saturday, a consumer brought this one to my attention. Purchased on Amazon Japan. Batch (serial) number was the indicator that it was fake. Real product provided for comparison. #fakeproducts #crossborder #ecommerce #japanesemarket #marketaccess #amazon

Exclusive 🇨🇳 🛫 📦 : Amazon is planning to use the same controversial trade rule as Temu and Shein to import items sold on its upcoming discount section without paying tariffs. While the expected move will help Amazon offer prices that are more competitive with its ascendant rivals, it’s also likely to thrust Amazon into the center of heated political debate around the trade rule. The rule, known as de minimis, exempts individual packages worth less than $800 from tariffs and has been critical to the rise of Temu and Shein. Read the full story with Jing Yang in The Information: https://lnkd.in/ezd6X6bD And read our original report from Wednesday on Amazon's planned discount section: https://lnkd.in/egbV2kr3

With an ongoing policy shift in the US, SHEIN and Temu are going to start to feel some pressure in the US market. These companies have dumped cheap, low-quality items into US customers' hands over the last few years by taking advantage of a Customs Entry Program called Type 86 which covers "de minimis" shipments. Originally implemented in the 1930s, the "de minimis" designation meant there were no tariffs, duties, or declarations needed to ship something of minimal value back to the US. Right now, that value is $800. While noble in its intent, an unintended consequence of including overseas e-commerce shipments in the Type 86 test has been companies like Wish, Alibaba, and Temu shipping huge quantities of packages to the US duty-free without any oversight into what is in the packages, as well as at an extremely low cost. These packages often contain low-quality goods that end up in landfills and undercut domestic producers and sellers. There have also been several instances of using this coverage to import illicit substances into the country due to the lack of oversight on these packages. Now, US policymakers are catching on and are beginning a crackdown on this loophole, with suspensions of brokers like SEKO Logistics ability to process Type 86 designated shipments. It'll be interesting to see how legislators thread the needle to stop these types of shipments without disrupting the initial intent of Type 86. Generally, I think taking action is certainly a net good for both our domestic market and our environment. Not good news for Meta, though, as these companies have quickly become top advertising accounts for them in the last few years! I can see arguments for both sides, so I'm curious what more informed people than me think about this ongoing effort.