From Haul Flex to Eco-Anxiety: How Temu and Shein's Collapse Exposed Gen Z's Broken Shopping Economy

Introduction

If you were on TikTok or YouTube in early 2025, you couldn’t escape the haul: the ecstatic unboxing, the “fit check,” the affordable glow-up assembled from 10–20 items bought in one sitting. “Temu Shein hauls” became a ritual — a cultural badge that mixed bargain hunting, dopamine hits, and a kind of peer pressure to keep up with trends on a shoestring. For a generation shaped by influencers, side hustles, and razor-thin budgets, these platforms offered an elevated fantasy: fast fashion on demand, delivered to your doorstep for a fraction of traditional retail prices.

Then, in a matter of weeks, the fantasy cracked. By May 2025 the U.S. market that had powered a haul culture explosion collapsed. The dominoes fell fast: ad budgets plummeted, app-store rankings tanked, monthly active users dropped, and the regulatory rules that underpinned the low-price model were rewritten. Behind the headlines of cratering downloads and busted IPO plans lay a more consequential story — one that exposes the fragile seams of a shopping economy Gen Z helped create, and the eco-anxiety that’s now metastasizing from it.

This investigative piece walks through the data, timelines, and market mechanics behind Temu and Shein’s collapse, dissects how haul culture rose and why it was unsustainable, and — crucially — explains what the fallout means for Gen Z’s mental health, spending habits, and environmental conscience. We’ll use the latest available statistics from the 2025 market shocks, chart the pivot to Europe, spell out the trade-policy trigger (the end of the de minimis exemption), and translate all of that into practical takeaways for young shoppers, creators, and brands navigating a post-haul world.

If you’ve ever felt guilty after a midnight haul spree, or watched your favorite influencer celebrate a 30-item unboxing with zero context about where those items came from — this story is for you. It’s a look at how a shopping culture that blurred borders, tariffs, and moral calculus suddenly hit a hard wall, and how that wall is reshaping Gen Z’s relationship with consumption, climate concern, and identity expression.

Understanding the Collapse: What Happened and Why

To understand the collapse, start with the model. Temu and Shein built meteoric growth by combining two ingredients: supply-chain scale that drove rock-bottom prices and an advertising blitz that turned low-cost offerings into cultural rituals. That mix was turbocharged by a regulatory loophole — the U.S. “de minimis” tariff exemption — which allowed packages under a certain value to enter tariff-free. For years that exemption created a price arbitrage for parcels shipped directly from Chinese manufacturers to American consumers.

The policy change came fast. On May 2, 2025, the U.S. effectively dismantled the de minimis advantage. Tariffs that had been minimal on micro-shipments spiked — at one point rising as high as 145% in April before moving to an effective 30% level — and platforms that had relied on ultra-cheap entries had to confront sudden economics they didn’t control. The market effect was immediate.

Numbers tell the sharp geometry of the fall. U.S. spending on Temu dropped roughly 30% in May 2025, while Shein’s spending declined nearly 20% in the same window. Web traffic mirrored that collapse: Temu’s U.S. web traffic plummeted about 51% from May 1 to May 16 year-over-year, and Shein fell roughly 44% over the same comparison period. Monthly active user counts and daily engagement eroded quickly — Temu averaged 41 million monthly users in May, down from 58 million in March, and saw a 52% decline in daily active users from March to May. Shein fell from 29.2 million monthly users in March to 25.7 million in May, with U.S. daily active users off by about 25%.

App store rankings are an attention metric you can’t fake: Temu tumbled from #3 to #85 in a two-week stretch; Shein slipped from #7 to #80. Much of this wasn’t just consumers clicking away; companies effectively dialed back the pumps that had powered their visibility. Advertising spend nosedived — Temu’s daily average U.S. ad spend fell 31% in early April compared with March, while Shein trimmed about 19%. At one point there were nearly 30,000 Temu ads archived in Meta’s ad library; only a handful remained active in the U.S. by the time the dust settled. The platforms, squeezed by policy and economics, announced price increases beginning April 25 — a tacit admission that their “always lowest price” claims were untenable.

Meanwhile, the broader retail market didn’t evaporate. Instead, demand was rerouted. Traditional retailers picked up share: Walmart.com saw roughly a 15% traffic bump, Target.com climbed more than 10%, and department/value retailers like Macy’s, Kohl’s, and Old Navy reported gains. Survey data showed nearly 30% of U.S. consumers would stop shopping on platforms like Temu, Shein, and AliExpress — a sign that users might be substituting trust and convenience for rock-bottom cost.

Geography mattered. As U.S. headwinds grew, Temu and Shein pivoted to Europe. Consumer Edge data documented growth acceleration in the U.K., France, Spain, and Germany; Temu’s spend in France almost doubled year-over-year. The E.U. policy outlook looked friendlier: discussions circled around a €2 flat fee for small e-commerce parcels under €150 — a much lighter burden than the U.S. tariff reality. Average basket sizes also showed comparable economics across geographies — Temu’s average orders were $36 in the U.S. vs. $32 in the E.U.; Shein’s were $57 vs. $55 — meaning the geographic shift was more about regulatory climate than about superior unit economics.

Operational responses followed. Temu began shifting away from direct-from-China shipments and focused on U.S. warehouses to blunt tariff exposure. Parent companies felt strain: PDD Holdings, Temu’s Chinese parent, reported slowing revenue growth and sharply lower profits in Q1 2025. Shein’s IPO ambitions faltered — a London listing stalled and Hong Kong emerged as an alternative. And out of the scramble came winners: DHgate shot into the U.S. App Store top ranks (reaching #2) as different platforms and tactics emerged to meet persistent demand.

Taken together, the collapse was not only a market correction but an industry reckoning: a business model that relied on regulatory arbitrage and aggressive ad spend was suddenly exposed as fragile. Gen Z’s haul economy — built on fire sales and micro-parcels — showed how cultural norms can be created on shaky foundations.

Key Components and Analysis: Haul Culture, Environmental Impact, and Gen Z Psychology

To unpack why this collapse matters culturally, you need to look beyond the balance sheet and into sociology and climate ethics. Haul culture wasn’t just shopping; it was content production, identity signaling, and social belonging. A 10–20 item haul video accomplishes a few things simultaneously: it flattens the friction of purchasing (click, order, receive), it produces shareable content (unbox, react, model), and it operates as a social currency (look at how much I scored).

But fast fashion environmental impact wasn’t an afterthought — it was a built-in externality. Low prices hide real costs: emissions from global shipping, textile waste, short garment lifespans, and the chemical intensity of mass manufacturing. Gen Z, raised amid climate warnings and wildfire seasons, now wrestles with cognitive dissonance. The same cohort that marches for climate policy and prioritizes sustainability at hiring also consumes micro-trends at scale. That tension fuels what mental-health professionals are calling eco-anxiety: a persistent worry about climate futures that can be exacerbated by visible consumption guilt.

The collapse injected another variable: financial stress. Gen Z’s haul habits were not just about style, they were a coping mechanism for identity formation in a precarious economy. When the cheap pipeline suddenly constricted (thanks to May 2025 tariff changes and ad withdrawal), many users experienced a double whammy — lost outlets for creative expression and an immediate increase in cost for a behavior they used to rely on. That’s why the market event feels like more than a retail news item; for many it felt like the death of a cultural shorthand.

Several market-driven components accelerated the social effect:

- Advertising dependence: The platforms’ cultural visibility depended on massive ad spend. When those budgets shrank, so did cultural momentum. Hauls went from abundant to scarce in the space of weeks. - Low loyalty, high churn: Rapid drops in daily active users show that haul culture was less about platform loyalty and more about cheap access. When the economics changed, users defected quickly. - Rechannelled demand: Consumers moved to trusted domestic retailers and alternative platforms, but the social spectacle of mass hauls — amplified by ultra-low prices — dimmed. - Geographic arbitrage: Europe picked up the slack, but for U.S.-based Gen Z the move across borders felt like a market-level betrayal — a convenient system collapsing and leaving social rituals without infrastructure.

From an environmental standpoint, the collapse is complicated. On one hand, fewer low-cost cross-border shipments should reduce micro-parcel emissions and textile waste. On the other, if consumers simply shift to buying similar volumes from different channels or to fast-turn domestic producers, environmental benefits may be negligible. The policy fix that triggered the correction had environmental rationales for many lawmakers; but the ultimate ecological outcome depends on whether consumption decreases, shifts to higher-quality goods, or is replaced by other carbon-intensive behaviors.

Psychologically, the result is a spike in eco-anxiety and shopping guilt among Gen Z. The loss of haul culture removes an outlet for identity expression, making sustainable alternatives less appealing if they’re perceived as costlier or less “content-worthy.” This is the paradox: cultural norms (haul videos) made sustainability harder because they normalized disposability; the collapse exposes the fragility of that norm but also creates a vacuum that could be filled by either greener practices or more wasteful ones if younger shoppers pursue cheaper alternatives.

Practical Applications: What Gen Z Consumers, Creators, and Brands Can Do

If you’re Gen Z — a creator, a shopper, or someone watching friends pivot away from hauls — this is where the investigation becomes practical. The collapse isn’t just a cautionary tale; it’s a pivot point. Below are actionable strategies for each role in the ecosystem.

For Consumers - Audit impulse habits: Before a haul, wait 48 hours. You’ll cut impulse buys and reduce returns — which are a big source of waste. - Prioritize durability and fit: Spend on one piece that lasts rather than five trend items that will be discarded. Track cost-per-wear. - Use trusted resale and swapping: Thrift and peer-to-peer swaps maintain style variety without manufacturing new items. - Budget with intention: If creative content relies on new items, allocate a creator budget separate from your everyday wardrobe fund.

For Creators - Shift content narratives: Create “sustainable try-on” content showing longevity, styling older pieces, and visible mending and upcycling. - Be transparent about cost and origin: Audiences respect honesty. Calling out supply chains can build trust and reduce guilt. - Partner with resellers and sustainable brands: Showcase secondhand finds and circular-economy models that still deliver compelling visuals.

For Brands and Retailers - Lean into transparency: Publish lifecycle footprints and repair policies. Gen Z rewards brands that show environmental accountability. - Invest in circular programs: Offer buy-back, repair, and resale channels to retain customers and reduce waste. - Prepare inventory agility: Retailers that moved too slowly in 2025 missed inventory windows. Flexible supply chains win in volatile policy environments.

For Policy Advocates and NGOs - Push for real alternatives: Tariff adjustments should be paired with incentives for sustainable packaging and end-of-life garment protocols. - Educate rather than shame: Messaging that stigmatizes young shoppers will backfire. Provide practical tips and accessible pathways to greener consumption.

Actionable Takeaways (quick list) - Wait 48 hours before buying; it reduces impulse returns and waste. - Use cost-per-wear to evaluate purchases. - Create content that celebrates "wear longer" over "buy more." - Support resale and local mending services. - Demand transparency from brands on sourcing and lifecycle impacts.

Challenges and Solutions: Navigating the Broken Shopping Economy

The collapse revealed interconnected challenges — economic, cultural, and environmental. But each challenge also opens a path to solutions.

Challenge 1 — Economic Precarity vs. Sustainable Choices Gen Z often chooses cheap items not because they don’t care, but because they can’t afford premium alternatives. The solution here isn’t moralizing; it’s structural. - Solution: Expand access to affordable quality through subsidies for sustainable small brands, community mending workshops, and scaled resale platforms that reduce cost barriers.

Challenge 2 — Content Incentives Drive Disposable Consumption Influencer culture prioritizes novelty; platforms reward frequent newness. - Solution: Platforms can tweak algorithm incentives to boost longevity content (styling, repair, resell), and creators can diversify revenue sources so they’re less dependent on continuous new-item content.

Challenge 3 — Lack of Supply-Chain Transparency Shoppers are disconnected from the true environmental cost of a $5 dress. - Solution: Policies that require lifecycle labeling, supply-chain traceability, and public reporting will help purchasers make informed choices and push brands toward cleaner practices.

Challenge 4 — Retail Instability and Inventory Risk Retailers hesitated to reorder during tariff uncertainty, missing opportunities to capture redirected demand. - Solution: Create flexible manufacturing agreements and domestic buffer stocks to avoid stockouts and reduce reliance on fragile global micro-shipments.

Challenge 5 — Eco-Anxiety Without Clear Pathways Young people feel guilty but lack accessible alternatives that align with aesthetics and social status. - Solution: Normalize circular behaviors socially (resale hauls, styling challenges featuring older pieces), fund educational campaigns, and develop style-forward sustainable brands that speak Gen Z language.

These solutions require coordination across consumers, platforms, brands, and policymakers. The collapse is an inflection point — a chance to rewire incentives so cheap convenience doesn’t always win over long-term value.

Future Outlook: Predictions and Possibilities

What happens next depends on several levers: policy permanence, platform strategies, and how Gen Z’s cultural norms adapt.

Short-term (6–18 months) - Stabilization in U.S. markets as platforms reprice, adjust logistics, or reduce ad spend. Some consumers will permanently shift to traditional retailers; others will migrate to alternative apps. - Europe remains a growth zone for direct-from-manufacturer apps due to relatively friendlier parcel fees, but regulatory scrutiny will rise there too. - Creators double down on resale and styling content, filling the content vacuum left by haul deaths.

Medium-term (18–36 months) - A bifurcated market emerges: a higher-quality, slower-move tier emphasizing transparency and sustainability, and a nimble, lower-cost tier operating within new regulatory constraints (regional warehouses, different tax treatments). - Circular economy services (resale, repair, rental) become mainstream creative fodder and viable businesses. Expect consolidation and scale in resale marketplaces.

Long-term (3–5+ years) - If policy continues to internalize environmental costs (tariffs, parcel fees, packaging regulation), price signals will favor durability and repairability, reducing the prevalence of disposability. - Gen Z’s eco-anxiety may attenuate as practical, enjoyable sustainable alternatives replace haul rituals. The culture of “flex” could evolve into a culture of “curate” — celebrating depth of wardrobe over breadth. - New social norms may arise where digital influence rewards resourcefulness: best-styled thrifted outfit, most creative upcycle, most useful repair tutorial.

Key wildcard scenarios - If platforms find new loopholes or tech fixes (e.g., drop-shipping from third-party regional suppliers) the haul economy could reconstitute in modified form. - If economic downturns deepen, cheaper consumption might spike again, pushing environmental concerns down the priority list and undermining gains. - If brands and policymakers coordinate effectively, we could see a durable shift toward circularity that realigns Gen Z consumption without erasing the joy of personal style.

In short: the collapse did not end demand. It changed the plumbing. Where that demand flows will be determined by policy, platform tactics, and whether sustainable alternatives can be made as accessible and culturally resonant as haul videos once were.

Conclusion

The Temu and Shein collapse in 2025 was more than a business story; it was a cultural rupture that exposed how quickly a generation’s rituals can be built on policy loopholes and a well-funded attention economy. For Gen Z, the fallout produced a mix of relief, anxiety, and opportunity. Relief because the environmental logic of unlimited micro-shipments became unsustainable; anxiety because the rituals that enabled identity, creativity, and community around shopping were abruptly taken away or made more expensive.

This is an inflection point, not an endpoint. The data — from Temu’s 51% traffic drop and 52% decline in daily active users between March and May, to Shein’s nearly 20% spending decline and stalled IPO plans — shows a market in rapid recalibration. The regulatory lever (the May 2, 2025 end of the de minimis exemption) triggered what had been an artificially cheap era into a costly reckoning. But within that reckoning lies a path to healthier norms: circular fashion, transparent supply chains, and content that celebrates longevity over novelty.

For young shoppers and creators, the choice is practical and ethical. You can chase the last echoes of haul flings, or you can be part of building an economy that balances expression with stewardship. For brands and policymakers, the mandate is to create systems that make sustainable choices easy, affordable, and culturally cool.

Gen Z has always been a trend-shaping force. The question now is how this generation will translate eco-anxiety into action that reshapes not just what we buy, but why and how we buy it. The death of haul culture could be the painful but necessary prerequisite for a shopping economy that’s less broken — and more in tune with the world Gen Z wants to inherit.