Casey Hall

Shanghai/New York (Reuters) - Daily U.S. users of Temu, a global discount e-commerce platform, fell 58% in May, according to market intelligence firm Sensor Tower, which are numerous headwinds facing E-Chine retailers in the Americas trade war.

Temu decided to cut U.S. spending in the U.S. and shifted its order fulfillment strategy after the White House ended its practice known as "De Minimis" on May 2, an act that allowed Chinese companies to ship low-value packages to the U.S. tax-free.

Temu has been used with the fast-fashion giant Shein for years, with consumers directly from Chinese suppliers to US putting it to lower prices.

Both Temu and Shein's sales and customer growth have dropped sharply, with Teepher's growth rate sharply since U.S. President Donald Trump announced full trade tariffs, but Teepher's trend is worse than its competitors, according to data collected by consulting firm Bain & Company.

The data shows that tariffs forced both platforms to raise prices compared to a year ago, but Shein was able to increase spending per customer compared to a year ago, while Temu was struggling.

Temu did not respond to a request for comment about the headwinds faced by U.S. daily users or the U.S. market.

Participation in Temu fell sharply after the waiver ended, Morgan Stanley stock analyst Simeon Gutman said in a note in May.

"While the tariff environment is uncertain, if the status quo remains for a long time, we believe Temu's competitive threat will continue to weaken," Gutman said.

Last week, PDD's first-quarter earnings failed to hit growth estimates, and executives told analysts that tariffs put huge pressure on its businessmen in a call after paying tribute.

They reiterated Temu's earlier assurances, requiring prices to be kept stable and working with merchants across regions, referring to the shift in the local fulfillment model announced in early May.

Temu's previous business model allowed merchants to order and deliver their products, while China-based companies managed most logistics, pricing and marketing.

Now Temu's merchants "can ship individual orders from China to Temu-Partner's U.S. warehouses, but they need to deal with tariffs, customs charges and paper work," HSBC analysts' notes Temu continues to process orders with shoppers near to meet orders, setting prices and operating online.

HSBC said in a comment last week that Temu's growth in the non-U.S. market has risen, with non-U.S. users accounting for 90% of its 405 million global active users in the second quarter.