Chinese platforms Temu and Shein are shifting their focus to the European market due to Donald Trump's tariff policies affecting marketplaces in the US. However, despite rising advertising spending and increasing sales, they may face difficulties due to European regulatory requirements, CNBC reports.
Anand Kumar, associate director of research at Coresight Research, told CNBC that as regulatory and trade pressures in the US intensified, Temu and Shein began to pay more attention to Europe and the UK. At the same time, both companies immediately faced regulatory hurdles that echoed those in the US.
Both Temu and Shein have been subject to complaints in the European Union over the past few weeks, accusing them of unfair business practices. Meanwhile, European regulators are preparing a new flat fee of two euros for previously duty-free small packages, such as those sent by the aforementioned marketplaces.
According to experts, the new changes could have a negative impact on online platforms, similar to the closure of the preferential tariff for small packages and new tariffs of 54% in the US.
"The EU’s proposed €2 customs fee is more than a minor surcharge—it’s a strategic regulatory move aimed at curbing the unchecked growth of ultra-cheap cross-border e-commerce, and it could reshape how platforms like Shein and Temu operate in Europe over the next 2–3 years," says Kumar.
Despite the potential challenges, both platforms have increased their advertising spend in Europe, particularly in the UK and France. Meanwhile, Consumer Edge notes that consumer spending on Temu in the US fell by 36% year-on-year in May 2025, while Shein fell by 13%. However, in Europe, the trends are the opposite, with consumer spending on Temu increasing by 63% in the EU and 38% in the UK in May. Shein has seen 19% and 42% growth respectively.
Both marketplaces continue to use the momentum to further aggressively develop in the region. Shein and Temu are not only increasing advertising spend, but also expanding warehouse capabilities and testing localized business models.
As a reminder, in December the EU announced plans to tighten regulation of Temu and Shein. The European Commission, in particular, was considering the possibility of introducing a new tax on digital trade, as well as a new administrative fee for processing each shipment.