Temu’s New Plan to Keep Prices Low in Mexico

MEXICO CITY — China conquered Mexico with inexpensive products through platforms like Temu, Shein, and AliExpress, but the market took an unexpected turn following an increase in taxes on imports. Facing this new landscape, Temu has found a way to strengthen its position in the country by opening local warehouses and inviting Mexican suppliers onto its platform.

The SAT's Tax on Chinese Platforms

In late July, the Mexican government raised the tax on small packages imported from countries without a trade agreement, such as China, from 19% to 33.5%. The measure aims to protect national industry and curb the illegal resale of products acquired on foreign platforms.

This increase is already being felt in consumers' wallets. According to an analysis by El Financiero, a simple blouse from Shein would increase in price by approximately 19 pesos under the new rate. Furthermore, the Undersecretary of Economy, Vidal Llerenas, warned that more tariffs could be forthcoming if unfair competition with local production is detected.

Temu Responds with a Local Strategy

Far from retreating, Temu decided to get ahead of the SAT. According to Bloomberg, the company has already begun to incorporate Mexican sellers into its marketplace and store merchandise in warehouses within the country.

With this, Temu seeks to partially circumvent the impact of the tariffs while simultaneously offering faster deliveries and expanding its catalog with national products. Furthermore, this move allows it to challenge Amazon and Mercado Libre, which until now have dominated Mexican e-commerce with their distribution networks and thousands of local sellers.

Impossible Prices to Match

Temu's real hook is its low prices. While a household appliance can cost 3,000 pesos in physical stores, a generic alternative for less than 500 pesos exists on Temu. The same occurs with fashion: clothing that sells for 700 pesos in Mexico can be found on Temu starting at 100 pesos.

Does Temu Threaten Amazon and Mercado Libre?

Until recently, the Mexican market was dominated by Mercado Libre and Amazon, but Temu's aggressive entry opens a new front. An analyst cited by Bloomberg warned: "These platforms shake up local economies. They have ripple effects that go beyond e-commerce."

Consumers are divided: on one hand, the taxes seek to protect national SMEs; on the other, Chinese platforms offer cheap products that are unattainable in local stores.

Specialists warn that if Temu successfully integrates Mexican suppliers, it could open a huge market for them. However, there is also a risk that small businesses could end up dependent on a foreign platform, which would increase their vulnerability.