Temu front-end prices skyrocketed overnight! Fully managed sellers' sales plummeted?

At the beginning of 2025, the repeated changes in the US tariff policy caused the cross-border e-commerce industry to experience a roller coaster-like shock. Although the exemption policy has been temporarily restored, industry insiders generally believe that this is only a stopgap measure. In the long run, the abolition of the "small tax exemption" policy is a foregone conclusion.

Under such circumstances, the operating model of cross-border e-commerce is being pushed by the tide of the times to accelerate its transformation. Faced with the ever-changing policy environment, the resource allocation of the platform is also quietly adjusting, and the semi-hosting model is gradually becoming the key to future development.

It is learned that in order to cope with the adjustment of US tax policies, Temu is speeding up the development of semi-custodial business.

According to Leifeng.com, Temu has loosened its pricing strategy in the semi-hosting model, and no longer blindly pursues Amazon's 60%-70% discount compression strategy for white-label products. At the same time, its internal team is discussing whether to open up third-party self-operated stores in advance to give merchants more autonomy, while Temu provides operational assistance.

According to an insider, it is possible that this adjustment will be implemented as early as March this year . However, as of press time, Temu officials have not yet released any relevant notice or news.

Industry insiders analyzed that Temu’s adjustment is not only a proactive response to external policies, but also an opportunity to accelerate the formation of a new business model.

On the one hand, Temu's traffic allocation mechanism is automatically switched, and the semi-hosting mode can effectively take over some of the cargo from fully-hosted merchants, helping sellers survive the "darkest moment" brought about by tariff fluctuations.

Temu's previously launched "One-piece transport" function is also seen as an important stepping stone to the transition to a semi-hosted model: while lowering the threshold for mode switching, it also improves operational flexibility and efficiency. In addition, Temu recently launched a pre-sale function, which is also designed to help sellers better adapt to market changes and improve inventory management efficiency.

On the other hand, it also marks that Temu has moved from "high control" to "moderate decentralization". This may break the original competition pattern and provide merchants with a more flexible operating space. It also indicates that the relationship between the platform and sellers will usher in a new round of game and rebalancing. However, how to find the best combination between efficiency and freedom will become the key proposition for Temu's next stage of development.

In fact, since Temu officially launched its semi-custodial business in 2024, despite its active investment promotion in the early stage, the actual progress has been quite difficult. Citi analysts previously predicted that by the end of 2024, the total transaction volume of goods in local warehouses will only contribute more than 20% of the transaction volume in the US market.

The reason is that the semi-hosting model is more suitable for merchants who have already developed maturely in the cross-border e-commerce field and have their own warehousing and logistics partners. These merchants usually have strong operational capabilities and experience in resource allocation.

For sellers who are just starting out or rely on full platform hosting, the challenges of logistics, customs clearance, and cost control required to transition to a semi-hosted model often make it difficult for them to adapt in the short term, and they may even lack the motivation to transform.

Therefore, although Temu has invested a lot of resources in attracting investment, it still faces bottlenecks such as merchants’ lack of willingness to transform and the difficulty of operation.

However, with the sudden changes in policies, many businesses have had to choose to embrace the semi-hosting model to adapt to the ever-changing market environment.

Industry insiders believe that semi-custodial business can not only effectively cope with short-term tariff adjustments, but also help platforms including Temu gain a favorable position in long-term competition. The localization of pallets can not only avoid the impact of sudden changes in tariff policies, but also solve problems such as unstable customs clearance timeliness and untimely delivery, thereby bringing more stable operation guarantees to merchants and platforms.

It is learned that many sellers have reported recently that the price of Temu front end has skyrocketed, resulting in a sharp drop in sales.

"The front-end price increased by 3-8 US dollars overnight, what a joke"

This sudden price increase shocked many sellers, who expressed that they found it difficult to understand and accept: "I don't even know the reason for the price adjustment. The price of Temu front-end has always been a mystery."

Industry analysts believe that Temu’s price increase, although seemingly a “market behavior,” actually hides the “platform’s own little calculations.”

First, Temu’s recent price increase may be a direct response to the sudden tariff adjustment. The platform passed the tariff costs on to sellers and consumers to ease the cost fluctuations caused by supply chain pressure and market changes. However, this transfer strategy did not take into account the actual affordability of merchants, but instead put some sellers in trouble.

But in fact, the price increase implies an adjustment in Temu’s overall strategy. An insider revealed that Temu officials have clearly stated that they will vigorously promote semi-custodial business in the future and gradually shift traffic to this model.

It is learned that many Temu seller groups have reported that the traffic of the full-hosting model has dropped significantly, resulting in a significant impact on its sales.

Some sellers said that by comparing the prices of the same products on Temu US on February 5 and February 7, they found that the prices of fully managed products on Temu US rose by 32%, while the prices of semi-managed products remained almost unchanged. At the same time, the proportion of fully managed product prices on Temu US to the same products on Amazon also rose from about 70% to 90%.

More importantly, with the adjustment of tariff policy, Temu has notified airlines to suspend cargo pick-up for 8 to 15 days. It is reported that the reason for the suspension of some cargo planes is precisely due to Temu's request.

It can be seen that Temu is very determined to promote semi-custody. As mentioned above, the transaction volume of the semi-custody model has accounted for 20% of Temu's GMV in 2024, and the market expects this proportion to rise further in 2025.