Temu's monthly active users fell 18% in October, before Europe's full €5 per-item toll hits PDD
Temu's user base has shrunk every month since June, and October was the last month before Europe's €2-per-item handling fee applied, which makes the 18% drop a lower bound on the toll. The bill lands on PDD Holdings, whose net income fell 12% last quarter and which reports around November 24.
Vincent Jiangthree-minute read
Temu, the discount shopping app its parent PDD Holdings−1.11% — PDD Holdings, down 1.11 percent today launched in 2022, has been losing users since June, and October was the last month before Europe's parcel toll applied in full 1. Sensor Tower's count of the platform's monthly active users fell 18% year on year in October; rival Shein's users have declined since July 1. A 38-year-old shopper in Frankfurt told Nikkei she had stopped buying on Temu, expecting prices to rise 1.
The toll arrived in two halves
Europe charges a €3 customs duty per item on parcels worth up to €150, since July 1, 2026, plus a €2 handling fee per item since November 1 2. October's reading sits between those dates: it predates the second fee, so 18% understates the toll, and the slide began in June, before the first duty, so the toll is not the platform's only problem 2.
Where the levy bites, the flows are blunt: small parcels from Asia into Estonia fell about 70% in the first two weeks of July, and Shein said its European sales fell around 14% in the second quarter 2. Denmark showed the bite first (The Inference, November 2) 2.
Australia is the control case
Roy Morgan's panel for the 12 months to June 2026 shows Temu adding 371,000 Australian shoppers, to 5.1 million, while eBay−0.36% — eBay, down 0.36 percent today lost 389,000 and fell to 5.9 million; Amazon−1.20% — Amazon, down 1.20 percent today added 728,000 and Shein 433,000 3. No EU fee applies there.
Where Europe's toll does not reach, Temu still takes eBay's shoppers.
Where no EU parcel toll applies, Temu still adds shoppers
Temu added 371,000 Australian shoppers as eBay lost 389,000
Data
| Value | |
|---|---|
| Amazon | 728k |
| Shein | 433k |
| Temu | 371k |
| eBay | -389k |
| Kogan.com | -58k |
The pivot is the damage
Temu's answer is to stop shipping parcels and import pallets. It said in early 2025 it would eventually process up to 80% of European sales through local warehouses 2, it now recruits local merchants in about 40 countries 1, and Shein put another €500 million into its Polish hub on November 4 2.
Bulk stock clears customs once per shipment and leaves as domestic parcels 2, which removes the per-item toll and, with it, the price gap Temu was built on. PDD is funding the switch: second-quarter revenue rose 8% to RMB112.4 billion while net income fell 12% to RMB27.2 billion 4, and co-chairman Zhao Jiazhen has called the company's new brand push slower than expected 5.
PDD's sales keep rising while profit lags its 2024 peak
Sales reached $16.5B in Q2 2026; quarterly profit has not beaten its Q2 2024 peak since
- Revenue
- Net income
Data
| Revenue | Net income | |
|---|---|---|
| Q3 '23 | $9.43B | $2.13B |
| Q4 '23 | $12.51B | $3.28B |
| Q1 '24 | $12.02B | $3.88B |
| Q2 '24 | $13.37B | $4.41B |
| Q3 '24 | $14.16B | $3.56B |
| Q4 '24 | $15.16B | $3.76B |
| Q1 '25 | $13.18B | $2.03B |
| Q2 '25 | $14.52B | $4.29B |
| Q3 '25 | $15.21B | $4.12B |
| Q4 '25 | $17.71B | $3.29B |
| Q1 '26 | $15.41B | $1.82B |
| Q2 '26 | $16.54B | $4B |
The cash floor
Morgan Stanley+1.43% — Morgan Stanley, up 1.43 percent today cut PDD to Equal-Weight from Overweight on November 9, target $90 from $129, and now discounts the net cash by 70% because no shareholder-return plan exists 67. PDD holds about $66 billion more cash than debt, some 56% of its market value, pays no dividend, and trades near $83, about seven times forward earnings 57.
What the November 24 print decides
PDD reports third-quarter results around November 24 5. Its releases do not separate Temu, so Sensor Tower's count is the only public Temu series 14. Watch transaction services, up 13% year on year last quarter 4, then November's user count, the first with the full €5 toll in the price.
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