Temu’s UK revenue jumped by 171 per cent to $171m last year, however changes to import rules that could push up the cost of its goods significantly.
Its UK business increased revenue from $63m in 2024 in the year to 31 December 2025, according to accounts reported by the Financial Times.
Profit rose from $3m to $6m, while Temu increased its UK headcount from no employees in the previous year, to 31.
However, the $171m revenue reported by its UK operation does not represent the total value of goods bought by British shoppers through Temu.
The business makes money by providing transaction and online marketing services to third-party merchants, with its UK entity describing its principal activity as providing corporate support to other companies in the group.
Estimates of Temu’s actual UK consumer sales are considerably higher. Research published by Barclays and Retail Economics this summer found UK shoppers were spending £4.7bn a year across ultra-low-cost marketplaces including Temu and Shein, equivalent to around five per cent of UK non-food ecommerce sales.
Temu’s growth has been helped by the UK’s treatment of low-value imports. Parcels worth £135 or less can currently enter the country without attracting customs duty, although VAT is still payable.
More than £3bn worth of customs-duty-exempt parcels were sent from China to the UK in 2024/25, up from £1.3bn a year earlier, according to HM Revenue & Customs figures cited by the FT.
That advantage now has an expiry date.
The government confirmed in July that it will remove the £135 customs duty relief and introduce a new system for low-value imports. The Treasury intends the new rules to take effect in 2028.
The change follows years of complaints from UK retailers that businesses importing individual low-value parcels have an advantage over companies that bring stock into Britain in bulk and pay customs duties before selling it.
For Temu, that creates a different challenge from the one it faced during its first years in the UK.
The platform has already proved it can attract large numbers of price-conscious shoppers. It now needs to show how much of that demand remains when the gap between its prices and those of domestic competitors begins to narrow.
It has already started to reduce its reliance on goods shipped individually from China by recruiting UK sellers.
It began bringing British merchants onto the platform in late 2024, with some now fulfilling Temu orders from UK warehouses. Leeds-based retailer Spot On-Line said last year that sales through Temu had grown to around £6,500 a day within six months of joining the marketplace.
The shift towards local sellers could become increasingly important once the new customs regime takes effect.
Temu has previously argued that corporation tax does not represent its full contribution to the Exchequer and that it also pays VAT and other taxes.
The UK is not alone in changing the rules around cheap ecommerce imports.
The European Union introduced an interim €3 charge on low-value ecommerce items in July and is also preparing a wider overhaul of its customs regime.
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