In April 2025, US consumer spending on ultra-discount Chinese retailers, such as Temu and Shein, experienced a sharp slowdown, according to Consumer Edge (CE), a leading provider of global consumer behavioral insights. This dip redirected a considerable portion of consumer dollars to American retailers like Old Navy, Ulta Beauty, Nordstrom Rack, and Savers Value Village, as shoppers shifted their preferences away from the Chinese platforms.
Significant Slowdown for Temu and Shein
Data revealed that Temu’s year-over-year US spending growth in April 2025 saw a dramatic deceleration. Growth dropped from nearly 50 per cent at the beginning of the month to almost zero by month’s end. Shein faced a similar pattern, with its year-over-year growth declining from about 30 per cent to around 20 per cent during the same period.
This US spending shift analysis aligns with various external factors, including escalating US-China trade tensions, the removal of duty-free de minimis policies for low-value imports, and reduced advertising budgets that previously fuelled Temu and Shein’s rapid expansion.
Shift in Consumer Habits
To uncover spending trends, Consumer Edge conducted a detailed US spending shift analysis focused on shoppers who had made at least two purchases on Temu or Shein in January or February 2025 but had not shopped on these platforms in March or April. Their findings revealed a rapid reallocation of consumer spending, with money being redirected to other retail brands.
Michael Gunther, vice president and head of insights at Consumer Edge, explained:
“The data isn’t just showing a slight dip — we’re seeing a rapid reallocation of spend from these popular Chinese discount platforms, and we’re able to isolate exactly who’s driving it. Our cohort analysis gives us the ability to track what former Temu and Shein shoppers are doing now—not just in general, but down to the specific brands seeing surges in growth among this group. The current political and economic climate, including policy shifts and pricing pressures, is causing US consumers to alter their spending behaviour drastically. Our near-real-time data shows where this significant shift in spend is landing.”
Broader Implications
This reallocation of consumer spending underscores the impact of global trade dynamics and economic policy shifts on retail trends. With US-China trade relations under strain and key policy changes affecting imports, consumer preferences are evolving, benefitting domestic retailers amidst the changing landscape.
