How Shein and Temu cracked China direct to consumer shipping

Shein and Temu built billion-dollar brands on direct-from-China fulfillment. Here's how the model works and how any DTC brand can use it.

April 15, 2024

Last updated: April 23, 2026

Shein and Temu didn't become two of the fastest-growing Ecommerce companies on price alone. Behind the low costs, big product selection, and fast delivery times is a fulfillment model most brands don't use: direct to consumer shipping from China.

The model skips the ocean freight containers, skips the domestic warehouse, and ships finished goods by air directly from China to the customer's door. It's faster than most people assume — Portless merchants average six-day delivery — and it fundamentally changes the cost structure of running a DTC brand.

This post breaks down how the model works, why it gives Shein and Temu a structural advantage, what happened when US tariffs changed, and how independent DTC brands are using the same playbook.

What is China direct to consumer shipping?

China direct to consumer shipping — sometimes called direct fulfillment from China — is a model where finished goods ship from manufacturers or fulfillment centers in China directly to end customers via air freight. There's no bulk ocean shipment to a US warehouse, no domestic storage, and no separate pick-and-pack step.

Here's how the legacy supply chain model — that Temu and Shein don’t use — works:

1. Brands manufacture goods in China.
2. Goods ship in bulk via ocean freight to a US warehouse a few times per year — with six or more weeks of lead time.
3. Tariffs and duties are paid on the entire container load when they enter the country
4. Goods are inbounded, made available for sale, and then sit in domestic storage or warehouse until an order is placed.
5. An order is picked, packed, and shipped domestically to the customer with a last-mile delivery provider (like USPS)

In the direct-from-China model, steps two to four disappear. The result is a faster, leaner supply chain — and a fundamentally different cost structure.

Why air freight works for this model

The economics work because the products Shein, Temu, and similar brands sell are light relative to their sale price. Air freight on a 300g fashion item costs a few dollars. That cost is more than offset by eliminating months of warehousing, the carrying cost of pre-purchased inventory, and — for brands shipping through bonded facilities in China — a 13% VAT rebate that non-bonded routes can't access.

How Shein and Temu built their advantage on this model

Both brands built their supply chains around direct-from-China fulfillment from the start. The architecture is the same one any DTC brand manufacturing in China can use — Shein and Temu just proved it works at a massive scale.

Shein

Shein holds roughly 50% of the US fast fashion market and ships to over 25 countries, all without relying on a domestic warehouse network. Its supply chain is built on real-time inventory visibility across its manufacturer base, automated order routing, and direct air freight from China to customers internationally. It adds hundreds of new SKUs daily — a pace that would be impossible with a legacy fulfillment cycle.

Even after the US ended the de minimis exemption for Chinese imports in May 2025, Shein continues shipping directly from China. It's also expanded manufacturing to Turkey, Mexico, and Brazil to diversify away from China-origin tariff exposure. The model survived because the structural advantage — no domestic warehouse overhead, no bulk pre-purchase — doesn't depend on duty-free entry.

Temu

Temu launched in September 2022 and scaled faster than almost any Ecommerce platform before it. By May 2023 it had outpaced Shein on sales in several product categories. Its five Super Bowl ads in February 2024 — backed by $15 million in giveaways and the "shop like a billionaire" tagline — pushed it to the #1 spot on the App Store, with downloads rising 47% on game day alone according to Sensor Tower.

The model was the same: manufacture close to inventory, ship direct via air freight, route each order algorithmically to the fastest and cheapest carrier available.

Post-tariff, Temu took a different path than Shein. It shifted toward US warehouse fulfillment on its highest-volume SKUs, effectively marking direct-from-China items as out of stock for US customers. By 2026, Temu's US warehouses are projected to handle 20–25% of its US volume. The rest still routes through the direct model or semi-managed sellers.

Does Temu or Shein ship faster?

Both brands deliver significantly faster than legacy retailers fulfilling from domestic warehouses after a 60-day ocean freight inbound. But the real story is that direct-from-China fulfillment is genuinely fast in absolute terms — not just "faster than ocean freight."

The table below shows a side-by-side of Shein and Temu’s shipping models, along with what a brand using Portless or a legacy 3PL could achieve:

How a direct-from-China supply chain works

Real-time inventory visibility

Direct-from-China brands maintain a live view of manufacturing inventory across their supplier network. When demand spikes on a product, they pull from whichever factory or consolidation hub can fulfill fastest. This lets them respond to demand signals in days instead of weeks.

Automated order routing

Orders match to inventory location and carrier automatically. There's no manual pick, sort, or cross-dock step. Once placed, an order routes directly from the optimal fulfillment point to the customer's address. This removes the domestic warehouse layer entirely.

Multi-carrier optimization

Both Shein and Temu work with multiple carriers — postal services, private couriers, airline consolidators — and route each shipment algorithmically. A $12 order to California ships differently than a $35 order to New York. This per-order optimization adds up to significant savings at scale.

Duty payment on what sells, not what ships

In the legacy model, you pay duties on an entire container of inventory at the port of entry — before a single unit sells. If tariff rates change after you've paid, you're stuck filing protests to recover the difference. Direct-from-China fulfillment flips this: duties are paid per order at the shipment level, so you only pay on what's actually sold.

One inventory pool, 75+ countries

A legacy brand selling internationally needs warehouse infrastructure in every major market — or at minimum, separate inventory allocations for each region. Direct-from-China fulfillment centralizes your inventory in one location at the point of manufacture.

From that single pool, you can ship to any country via air. A customer in Germany, a customer in Australia, and a customer in Texas all pull from the same stock.

No regional pre-positioning, no splitting inventory across warehouses, no guessing which market will need units next. That's how Shein serves 25+ countries without a warehouse network — and it's the same architecture Portless offers to independent DTC brands across 75+ countries.

What happened when US tariffs changed

Until May 2, 2025, shipments from China under $800 entered the US duty-free under the de minimis exemption. When the exemption ended, Chinese-origin goods faced tariffs of up to 120% or a $100 per-package fee for postal items. The rate has since been adjusted. As of late 2025, postal items from China face a 54% ad valorem rate or $100 flat fee. On August 29, 2025, the US suspended de minimis treatment for all countries, not just China.

Both brands responded differently. Shein expanded manufacturing in Turkey, Mexico, and Brazil to diversify origin exposure while continuing to ship direct from China — absorbing tariffs on its high-margin core business. Temu, which operates as a marketplace with ultra-thin per-item margins, shifted its highest-volume US SKUs to domestic warehouse fulfillment to absorb duties in bulk rather than per-package. That's a scale play specific to Temu's marketplace model, not a signal that direct fulfillment stopped working.

Why speed matters as much as price

Most analysis of Shein and Temu focuses on low prices. Speed is equally important — and for DTC brands evaluating this model, the cash flow effect may matter even more.

A 2023 Capgemini study found that 72% of customers satisfied with their delivery experience increase their purchase levels with the brand by 12%. Direct-from-China fulfillment doesn't just compete on delivery speed, it competes on availability. In a legacy model, a new product isn't available for sale until it clears 60–90 days of ocean freight and warehouse inbounding. Direct fulfillment makes it sellable within days of production. That means faster launches, faster restocks, and fewer out-of-stock pages that send customers to a competitor.

Independent brands using the same model

Shein and Temu prove the model works at scale. But direct-from-China fulfillment isn't limited to platforms with hundreds of millions of users. Independent DTC brands are applying the same architecture to compete on speed and cost without domestic warehouse overhead.

Cosara switched to direct fulfillment from China with Portless after struggling with a slow fulfillment partner. The result: faster delivery, real-time inventory visibility, and $82K in new revenue in the first quarter.

Craft Club initially chose a cheaper direct fulfillment provider, then switched to Portless after experiencing operational issues. Since migrating, Craft Club has grown 3x — with no limiting factors on their ability to continue scaling.

Both brands proved what Shein and Temu operate at scale: when you remove the domestic warehouse from the equation, speed and margin improve at the same time.

Is China direct to consumer shipping right for your brand?

The model works best when:

• You manufacture in Asia and your products are lightweight relative to their value.
• You want to cut or eliminate domestic warehousing costs.
• You're carrying too much inventory risk or your cash conversion cycle is too slow.
• You sell products where delivery speed affects repeat purchase rate.
• Add: you want to expand into new international markets without having to pay and set up new fulfillment centers or infrastructure.

It's a harder fit for heavy or bulky goods where air freight economics don't work, or if your customers expect same-day or next-day delivery that only domestic stock can support. For most DTC brands in fashion, beauty, accessories, or consumer electronics manufacturing in Asia, the math favors going direct.

Start with the model, then scale it

Shein and Temu didn't invent direct-from-China fulfillment — they just proved it works at scale. The same architecture is available to any Ecommerce brand manufacturing in China. Portless ships directly from China to customers in 75+ countries with no domestic warehouse required, averaging 5-day delivery to the US.