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Temu retains top spot on US iOS downloads amid rising scrutiny over Chinese apps

by December 17, 2024
written by December 17, 2024

Temu, the Chinese e-commerce giant owned by PDD Holdings, has secured the top spot on Apple’s US iOS store for the most downloaded free apps for the second consecutive year.

Its meteoric rise underscores the growing popularity of Chinese apps in the world’s largest consumer market.

ByteDance-owned TikTok, despite facing an uncertain future in the US, ranked third, while fast-fashion major Shein secured the 12th place.

The second spot was grabbed by Meta’s X challenger, Threads.

Temu’s success highlights its ability to capture American shoppers with aggressively priced goods shipped directly from China.

Mounting regulatory scrutiny and the looming threat of tariffs could jeopardise its growth trajectory.

The US iOS store holds significant influence, as Apple’s platform accounts for over 56% of the American mobile phone market, according to StatCounter.

Temu, which launched in the US in 2022, has rapidly gained traction, posing a significant challenge to established players like Amazon.

‘De minimis’ rule helping Temu, Shein

The Biden administration has moved to tighten trade policies targeting platforms like Temu and Shein.

A key focus is the “de minimis” rule, which allows shipments under $800 to bypass certain import duties.

This rule has been a critical factor in enabling Temu to offer goods at highly competitive prices.

In September, the US government proposed measures to curb what it calls “overuse and abuse” of the provision, a move that could raise costs for companies reliant on low-value imports.

Industry experts predict that any significant changes to the de minimis rule would erode Temu and Shein’s price advantage, forcing them to either absorb higher costs or pass them on to consumers.

Nomura’s global outlook report identifies changes to de minimis policies as a central trade issue for the incoming Trump administration.

Analysts predict this could become the second-highest trade priority after proposed tariffs.

The Donald Trump threat for Chinese imports

Donald Trump’s return to the White House presents a further challenge for Temu and other Chinese e-commerce players.

Trump, who made reducing imports from China a cornerstone of his campaign, has floated tariffs ranging from 60% to 100% on Chinese goods.

Although it remains unclear whether these threats will materialise, such tariffs would drastically impact companies reliant on US markets.

Nomura estimates that a blanket ban on de minimis imports from China could shrink the country’s annual export growth by 1.3% and reduce its GDP growth by 0.2%.

For companies like Temu, which depend on low-margin, high-volume sales, such policies could significantly undermine their competitiveness.

Southeast Asia tightens regulations on Chinese goods

The US is not alone in seeking to curb the influx of low-cost Chinese imports.

Southeast Asian economies, including Vietnam, Indonesia, and Thailand, have introduced measures to protect domestic industries.

Vietnam has imposed anti-dumping tariffs and recently banned Temu from operating locally, just two months after the company entered the market.

Indonesia has rolled out tariffs on Chinese goods, and Thailand announced stricter monitoring of imports.

These regulatory hurdles reflect broader concerns over China’s export dominance, which poses challenges for countries striving to balance local industry growth with consumer demand for affordable products.

Can Temu maintain its US success amid trade headwinds?

While Temu’s ability to top Apple’s US downloads for two consecutive years is a testament to its strong marketing and competitive pricing, its future remains uncertain.

Regulatory risks, tariff threats, and changing consumer sentiment could disrupt its trajectory.

If the US government proceeds with tightening the de minimis exemption and raising tariffs, Temu and similar platforms may face a significant downturn in their US operations.

How Temu adapts to these headwinds will determine whether it can sustain its foothold in the world’s most lucrative consumer market.

The post Temu retains top spot on US iOS downloads amid rising scrutiny over Chinese apps appeared first on Invezz

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