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TEMU DOUBLES DOWN ON US FORWARD WAREHOUSES
At the end of 2024, we reported that Temu was shifting some of its logistics for the fully managed model to US warehouses, rather than sending everything as a single package to consumers by air freight. At the time, Temu would select the most (expected) popular products, ship them to a US warehouse by sea freight and deliver to US consumers locally, in a few days after receiving the orders.
Currently, Temu has several options for the US market.
1) Use the old fully managed model, but each package will be subject to a 54% tariff, a clearance fee, and may take weeks to arrive.
2) the semi-managed model, in which merchants send goods to US warehouses and are responsible for all logistics, paying the current 30% import tax.
3) the so-called 'Y2 semi-managed model', in which merchants are allowed to ship from China after receiving the customer's order (paying 30% import tax, I assume).
4) the fully managed model + forward warehouses, paying 30% import tax.
5) local-to-local business, in which case no import tax applies.
Since the fully managed model + forward warehouse is one approach that has the lowest current import tariffs, it's no surprise that Temu is doubling down on this strategy at the moment. The chart below shows the targets for the share of fully managed sales it wants to run through forward warehouses.
In our Temu Watch #8 report at Tech Buzz China, we have more details on the fully managed forward warehouse model and other strategies that Temu is using to cope with US tariff challenges.
