The secret trade loophole that fuels Temu and Shein

Giving an edge: The US has a special trade loophole gives some Chinese brands like Temu and Shein an edge over the US’ own business owners. It’s called “De minimis”

Some facts about De minimis:

• 📦️ Packages $800 or less are exempted from tariffs

• 🚢 1 billion packages entered the US in the fiscal year and 1/3 of these belong to Temu and Shein

• ⌛️ has been in place since 1938 and was only updated in 2015 to increase the $800 limit

Playing Fair: The US is trying to challenge this by pushing for the De Minimis Reciprocity Act of 2023 to level the playing field.

What does it do?

• 📝 Only select countries can use the de minimis channel.

• 🛍️ Only allow express carriers to import into the US to help better prevent counterfeits

• 🔎 Require more information for every package

• 💸 Use the revenue proceeds to establish a fund for reshoring the industry from China

Pinduoduo founder is now 3rd richest man in China

Billion dollar man: Colin Huang, CEO of PDD Holdings (who owns both Temu and Pinduoduo) is now the 3rd richest person in China. His wealth grew by $13 billion in 2023 to total $37 billion.

How big are these companies?

• 📱 Pinduoduo is known for its group buying games that boosted growth in users. In early 2022, it had 751 million users.

• 📈 Temu is one of the biggest names in fast fashion with 100 million app users (40% coming from the US)

Nectar AI turns social engagement into revenue

Gen-Z wants messaging: Nectar AI is an upcoming startup that wants to use messaging as its secret weapon in shopping. According to their interview with Tech Crunch, Gen-Z has a high preference for private messaging.

How does it work?

• 🔧 You can craft and control your brand’s own AI

• 💬 Nectar AI uses ai generated messages to engage with leads and retarget them when needed