(Yicai) Aug. 28 -- Faced with rising import tariffs and soaring customer acquisition costs, Chinese e-commerce giants such as Shein and Temu are rewriting their global marketing playbooks at speed, according to new research.

Leading Chinese online retailers stormed global markets over the past five years by combining low-cost manufacturing with aggressive ad spending, winning customers largely by undercutting rivals on price, mobile marketing analytics and attribution platform AppsFlyer said in its 2025 State of E-commerce App Marketing report published yesterday..

But low prices are no longer enough, with efficiency, user retention, and precision targeting now the weapons of choice, the report said.

Hit by US tariff policy changes, Chinese e-commerce platforms have refocused their ad spending from the United States to Europe, and instead of pouring money into relentless user acquisition they are now targeting retention and efficiency.

Chinese e-commerce players allocated 85 percent of their global user acquisition spend to iOS between last October and this May, up from 77 percent a year earlier, AppsFlyer said, adding that user acquisition costs on iOS are about three to four times higher than on Android, but iOS users have higher conversion rates and stronger purchasing power.

Since the US eliminated the de minimis tariff exemption for low-value imported goods in February, user acquisition spending by Chinese e-commerce sites in the US plunged 32 percent to USD1.1 billion, while in France, Germany, and the United Kingdom it has surged by more than seven times.

Almost overnight, the logic of heavy investment in the US market collapsed, prompting Chinese platforms to redirect budgets toward Europe, Latin America, and Southeast Asia.

Even in Android-dominated emerging markets, Chinese online retailers are expanding their iOS user acquisition budgets. Last November, their spending in Brazil, India, and Mexico soared 481 percent, 70 percent, and 21 percent, respectively, from a year earlier.

Remarketing

Equally important is the rise of remarketing, according to AppsFlyer. Chinese e-commerce apps spent USD16.4 billion on remarketing last year, about 2.5 times their user acquisition budgets.

Remarketing is a strategy that uses tracking codes and cookies to deliver personalized ads to users who visited a website or app but did not complete a purchase, aiming to re-engage them and drive conversion.

AppsFlyer polled 1,600 global e-commerce apps, excluding marketplaces and fresh grocery platforms, tracking 29 billion marketing conversions from October 2023 to May 2025. Twenty-six billion were remarketing conversions, and three billion were paid activations, including user acquisition and in-app marketing, with a total advertising spend of USD4.2 billion.

During last year’s holiday season, remarketing accounted for 86 percent of e-commerce sites’ iOS advertising budget, up from 61 percent a year earlier, per the report.

Chinese brands were the main drivers of this trend, with notable year-on-year increases last November alone when their remarketing expenses surged 218 percent in the US, 220 percent in Germany, and 330 percent in Brazil.

Diversified user acquisition channels also showed strength, with web-to-app conversions posting robust growth, according to the report.

Risks

Fast growth brings new risks. The main one is fraud. AppsFlyer estimates that global e-commerce apps face nearly USD1 billion in ad fraud risk. On iOS, fraud rates peaked at over 30 percent but settled at close to 25 percent, while on Android, they were around 10 percent.

Privacy is another concern. “With identifiers like Identifier for Advertisers and Google Advertising ID under increasing restrictions, the old models of attribution and targeting are breaking down,” AppsFlyer noted. “Without investment in first-party data, probabilistic attribution, and artificial intelligence-driven fraud detection, efficiency gains could evaporate.”

“Going global is no longer just about ad spend; it’s about compliance, data, and risk control,” an industry executive said.

“The contours of ‘China E-Commerce 2.0’ are already visible,” AppsFlyer said. The US will continue to decline as a budget priority, with Europe and Latin America rising as the main growth engines, and user retention will matter more than acquisition, with remarketing spending locked in as the dominant driver.

Moreover, AI will increasingly separate the winners from the rest, powering smart segmentation, campaign optimization, and fraud prevention.

For a decade, Chinese e-commerce sites have bet on price-first approaches. Now, they are pivoting into a tougher game: balancing efficiency, compliance, and technology in markets that are far more complex.

“The winner of the next phase of globalization won’t be the company selling the cheapest t-shirts,” AppsFlyer concluded. “It will be the one that calculates, allocates, and optimizes with the sharpest precision.”

Editor: Futura Costaglione