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As tariffs increase and advertising expenses rise, major Chinese e-commerce companies such as Shein and Temu are shifting their global expansion strategies. Moving away from solely competing on low prices, they are now emphasizing operational efficiency, customer retention, and targeted marketing to better meet evolving overseas demand.
Trade regulations have become more restrictive, customer acquisition costs have soared, and the straightforward wins for budget Chinese e-commerce platforms have disappeared, according to the 2025 E-commerce App Marketing Report by a leading mobile marketing analytics and attribution platform. Success now hinges on making every advertising dollar, user interaction, and regional strategy count.
Over the past five years, these Chinese giants have made a significant push into international markets, primarily by offering the lowest prices. Their approach relied on inexpensive manufacturing, hefty advertising investments, and undercutting competitors to attract buyers, the report explains.
Efficiency Becomes the New Priority
Between 2019 and 2021, budget-focused Chinese e-commerce brands like Shein and Temu utilized China’s robust supply chains to provide affordable goods. During this period, they heavily invested in advertising through Facebook and Google to rapidly grow their customer base.
However, changing consumer preferences in the U.S. and Europe, along with increased import tariffs and rising costs to acquire new users, mean that low prices alone are no longer sufficient. Consequently, these platforms are redirecting their efforts from relentless user acquisition to improving retention and operational efficiency.
Data from the report shows that from October last year to May this year, Chinese e-commerce companies allocated about 85% of their global user acquisition spending to iOS, up from 77% the previous year. This shift is driven by the fact that acquiring users on iOS costs three to four times more than on Android, but iOS users tend to convert at higher rates and have greater purchasing power.
Since the U.S. eliminated the de minimis tariff exemption for imported low-value goods in February, user acquisition spending by Chinese e-commerce firms in the U.S. dropped by 32% to $1.1 billion, while investments in France, Germany, and the U.K. increased over sevenfold.
Almost overnight, heavy investment in the U.S. market became less viable, leading Chinese companies to reallocate their marketing budgets towards Europe, Latin America, and Southeast Asia.
In emerging markets where Android dominates, these companies are actually increasing their iOS user acquisition budgets. For instance, last November, spending on iOS in Brazil, India, and Mexico surged by 481%, 70%, and 21%, respectively, compared to the previous year.
Rise of Remarketing Strategies
The report highlights that remarketing—an approach that re-engages users who previously interacted with a platform but didn’t convert—is also gaining prominence. Last year, Chinese e-commerce apps spent around $16.4 billion on remarketing, which is roughly 2.5 times their initial user acquisition costs.
Remarketing involves tracking user behavior through cookies and codes to deliver personalized ads aimed at encouraging users to complete their intended actions.
Based on a survey of 1,600 global e-commerce apps (excluding marketplaces and grocery platforms), tracking 29 billion marketing conversions between October 2023 and May 2025, the report states that 26 billion were remarketing conversions, with the rest stemming from paid user acquisition and in-app marketing, totaling about $4.2 billion in ad spend.
During last year’s holiday shopping season, remarketing accounted for 86% of the iOS ad budgets for these platforms, up from 61% a year earlier. Chinese brands led this trend, especially in November 2024, with remarketing expenses jumping by 218% in the U.S., 220% in Germany, and 330% in Brazil compared to the previous year.
Additionally, diversified channels like web-to-app conversions showed strong growth, indicating a broadening of user acquisition strategies.
Potential Risks and Challenges
While shifting toward efficiency, regional diversification, and remarketing, these platforms face significant risks. Fraudulent activity remains a major concern, with nearly $1 billion in ad fraud exposure reported globally since 2023. Fraud rates on iOS once exceeded 30%, now hovering around 25%, while Android fraud rates are approximately 10%.
Privacy regulations are also tightening, impacting attribution and targeting models. Restrictions on identifiers like the Identifier for Advertisers and Google Advertising ID are weakening traditional methods, making it crucial to invest in first-party data, probabilistic attribution, and AI-driven fraud detection to maintain efficiency.
An industry insider emphasizes that expanding globally now involves more than just advertising spend; compliance, data security, and risk mitigation are equally critical.
Future Outlook
Insights into the next phase of Chinese e-commerce’s global growth suggest a clear trajectory. The U.S. market’s significance is expected to decline as a priority, while Europe and Latin America emerge as primary growth zones. Customer retention and remarketing will play increasingly vital roles, with advertising spend on remarketing remaining dominant.
Furthermore, artificial intelligence is anticipated to play a key role in distinguishing successful companies through smarter segmentation, campaign management, and enhanced fraud prevention.
For over ten years, Chinese e-commerce platforms relied heavily on low prices. Their future involves a more complex balancing act—incorporating efficiency, compliance, and advanced technology to thrive in competitive and challenging international markets.
Winning the next stage of global expansion will no longer simply mean selling the cheapest products, but rather excelling in precision, strategic allocation, and data-driven optimization.
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