As US/China trade tensions pressure ultra-discount growth, brands like Old Navy, Ulta, and Nordstrom Rack are winning share from value-driven consumers seeking affordable alternatives.

As some US consumers move on from Chinese low-cost merchants amid heightened trade tensions, brands like Old Navy, Ulta, and Nordstrom Rack are experiencing sharp increases in spend from former Temu and Shein shoppers in recent weeks as they seek affordable alternatives with wide product selections.

US spend growth has dramatically slowed for both Temu and Shein amid increasing US/China trade tensions and the elimination of the de-minimis loophole that supported their low-price models. Consumer Edge US transaction data shows that Temu’s year-over-year spend growth decelerated from up ~50% on April 9th to nearly flat at the end of the month, as its advertising pullback pressured sales. Shein’s growth slowed from up ~30% to up ~20%.

Investors, brands, and market observers all want to know – who might benefit from this pullback? With Consumer Edge US transaction data, we can isolate shoppers that used to shop at Temu and Shein and have since stopped, uncovering how their spend has shifted in the past few weeks at thousands of brands across retail. Former Temu/Shein shoppers increased spend at an outsized rate at:

  • Department stores like Bloomingdale’s , Kohl’s , and Nordstrom Rack, as wide selections across product categories proved appealing.
  • Gap’s Old Navy , as its wide selection across age groups and moderate price point filled a gap for shoppers turning away from Temu and Shein.
  • Savers Value Village , as the resale market served as a logical alternative to Temu/Shein’s affordable prices.
  • Beauty players Ulta and Oddity’s Spoiled Child, as consumers sought alternatives in personal care.
  • Urban Outfitters’ clothing rental service Nuuly , as it provided a relatively affordable alternative for shoppers looking for a diverse wardrobe.

For brands and investors alike, these early signals are a powerful indicator of how value-conscious shoppers are redefining where and how they spend.

In this analysis, we analyze shoppers that made at least 2 purchases at either Temu or Shein in January/February and made no purchases at either of those merchants in March or April. We compare spend growth for that cohort of individuals vs. overall spend growth of each brand, in order to zoom in on the direct impact of the Temu/Shein pullback.

Continue to track how trade tensions between the US and China and beyond are affecting consumer spending with Consumer Edge’s leading transaction data.

Stay on top of the impact on consumer spending when you partner with Consumer Edge. Dive deeper into the market landscape, enhance decision-making, and drive growth by leveraging insights that traditional data might miss. Start transforming your strategies today and set your business on the path to smarter, more profitable outcomes.

Schedule a Demo

Michael Gunther is the VP Head of Insights for the CEIC. Explore more of his insights here and follow him on LinkedIn.

< >
Share via