Surge in Haul Prices Predicted for US Shoppers After Elimination of De Minimis Exemption
Shein, Temu, and Amazon Haul prices are set to increase for American consumers following the closure of a trade loophole that allowed duty-free shipping of low-value packages from China.
Impact on Fast-Fashion Retailers
Industry experts and analysts predict a significant impact on fast-fashion retailers Shein and Temu, who have heavily relied on the "de minimis" exemption to offer low prices. The de minimis exemption enabled packages valued below a certain threshold to enter the US without incurring duties.
Temu and Shein's Mitigation Efforts
In response to the de minimis elimination, Temu and Shein have implemented measures to mitigate the impact. These include sourcing products from outside China, opening US warehouses, and partnering with US sellers.
Amazon Haul Position
Amazon Haul, which enables shoppers to purchase inexpensive items from China-based sellers, is also expected to face challenges. However, analysts believe the impact on Amazon's overall e-commerce business will be minimal. Amazon offers similar products at higher prices, providing potential opportunities for growth.
Small and Medium-Sized Retailers Suffer
The elimination of de minimis is anticipated to particularly affect small and medium-sized online retailers who source from China. These retailers lack the resources to absorb increased costs and adapt their supply chains.
Adapting to the New Landscape
Temu, Shein, and Amazon Haul are seeking to adapt to the changing landscape by diversifying their supply chains, establishing US warehouses, and partnering with domestic sellers.
Conclusion
The elimination of the de minimis exemption is a significant development that will likely lead to price increases for consumers purchasing goods from China. While fast-fashion retailers and Amazon Haul will be impacted, small and medium-sized retailers are expected to face greater challenges.