Europe Seeks to Limit Shein and Temu
- the era of ultra-cheap, quickly shipped goods from China to Europe and the US may be coming to an end due to new regulations targeting low-value parcels.Both the...
- * European Union: EU finance ministers have agreed to eliminate the €150 (approximately $175) de minimis exemption for goods entering the bloc, starting sometime next year. This will...
- Impact on Businesses: business TypeLikely ImpactShein & TemuSignificant impact on margins and perhaps their business model.
EU & US Crackdown on Cheap Imports: Impact on Shein, Temu & Global E-commerce
the era of ultra-cheap, quickly shipped goods from China to Europe and the US may be coming to an end due to new regulations targeting low-value parcels.Both the European Union and the United States are revising their “de minimis” exemptions – the threshold below which imports are exempt from customs duties and taxes – impacting companies like Shein and Temu that rely on high-volume,low-value shipments.
Key Changes & Context:
* European Union: EU finance ministers have agreed to eliminate the €150 (approximately $175) de minimis exemption for goods entering the bloc, starting sometime next year. This will impose customs duties on all parcels, irrespective of value.
* United States: The US previously removed its de minimis waiver for Chinese e-commerce products.
* Parcel Volume: The EU currently receives 4.6 billion small parcels annually, with over 90% originating from China.
* Additional EU Measures: Beyond duties, the EU is considering a €2 handling fee per parcel and is urging member states to crack down on underdeclared packages. Some countries (Romania, Italy) are already implementing national fees.
Impact on Businesses:
| business Type | Likely Impact |
|---|---|
| Shein & Temu | Significant impact on margins and perhaps their business model. These companies depend on high volumes of low-value goods. |
| EU & US Exporters | Increased costs and complexity when selling to the US and China respectively. They will face tariffs, paperwork, and higher shipping costs. |
| Small Businesses (US) | reduced access to affordable European goods. |
| Small Businesses (EU) | Loss of duty-free access to the American market. |
| Homegrown Companies (EU & US) | Potential harm despite the regulations being aimed at Chinese imports. |
Expert Opinions:
* Ben Graham (e-commerce expert): Believes Shein and Temu are already working on solutions, anticipating these changes following the US’s similar move.
* Ronald Kleijwegt (CEO, Vinturas): Highlights the reciprocal impact, noting that the changes affect exporters from both the EU and the US. “The removal of de minimis rules is reshaping global e-commerce.”
* Roberto Lobue (partner, Menzies): Predicts a “hard and fast” bite from the changes, suggesting a considerable impact on companies like Shein and Temu.
The Big Question:
Will these changes simply reduce the margins of companies like Temu and Shein,or will they pose an existential threat to their business models? The answer remains to be seen,but the regulatory landscape for global e-commerce is undeniably shifting.
– lisapark