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Temu’s European Warehousing Push Is the Visible Part of a Larger Shift

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September 4, 2026

Two separate 80% targets describe two different models for Temu’s development in Europe. One concerns sales by local European merchants, while the other concerns orders fulfilled from warehouses located within the European Union. The second development is particularly relevant to European service providers because moving inventory into Europe also brings tax, product compliance, environmental obligations, returns and day-to-day operations with it.

Temu rapidly built significant scale in the European market by basing its growth on direct deliveries from Chinese manufacturers. The platform is now moving towards a model in which a growing share of the products sold through it is stored in Europe, bringing returns, customs clearance, tax, document verification and order fulfilment into the region as well.

In July, Chinese e-commerce industry outlet Ebrun reported that Temu was reorganising its warehousing operations in Guangdong province while accelerating the deployment of more than ten warehouses in Germany and Poland described by the outlet as self-operated. According to the report, the platform plans to require 80% of shipments handled through its European operations to come from local warehouses “by the third quarter”.

The wording does not establish a precise deadline within the quarter. The third quarter ends on 30 September, and there has been no public confirmation that the stated target has been achieved. The platform has also confirmed neither the number of warehouses reported by Ebrun nor the claim that it operates all of them directly.

The general direction is nevertheless consistent with Temu’s agreements with European logistics operators and its development of sales models that place inventory closer to the customer.

Which model creates demand for local services?

Discussions about Temu’s European strategy frequently refer to two separate 80% targets that should not be conflated.

The first comes from a joint Temu and DHL announcement published in April 2025. According to Temu’s expectations as presented in that announcement, as much as 80% of the platform’s European sales could eventually come from the local-to-local model. Under this model, local merchants sell products to local customers. When describing its launch in Poland, Poczta Polska stated explicitly that the model was intended to encourage Polish businesses to sell through the platform.

Local-to-local is therefore part of Temu’s European localisation, but it does not automatically describe Chinese merchants moving inventory into the EU. Its primary effect may be to increase the share of European businesses selling through the platform.

The second 80% target appeared in Ebrun’s July 2026 report and concerns the proportion of shipments fulfilled from local warehouses within Temu’s European operations. This is a logistics indicator rather than a measure of where the merchants come from. It is this model that may include Chinese companies which, instead of dispatching every parcel directly from China, import goods in larger batches and engage a European operator to store the inventory and fulfil individual orders.

The distinction matters to European service providers. The growth of local-to-local shows that Temu intends to establish the platform more firmly within the European market. Demand for services from Chinese companies arises primarily when a Chinese merchant holds inventory in the EU and must organise the resulting tax, logistics, environmental and regulatory processes.

The semi-managed model moves responsibilities into Europe

Under Temu’s original fully managed model, the platform assumed much of the logistics process, while the merchant delivered the goods to a designated location in China. The semi-managed model continues to give the platform access to the customer and control over parts of the sales process, but typically leaves the merchant with greater responsibility for inventory, delivery and returns.

For a larger Chinese exporter, this can shorten delivery times and provide greater control over its product range. It also requires the company to hold goods in Europe, carry the cost of financing that inventory until it is sold and work with a local fulfilment operator.

The scale of the platform means that even a partial shift towards this model could create substantial demand for supporting services. Temu’s transparency report, published under the Digital Services Act, shows that the platform had an average of 129.7 million monthly active recipients of the service in the EU during the second half of 2025. With an audience of that size, moving even a limited share of the product range into Europe could require the local handling of millions of orders.

A fixed €3 duty hits low-value goods hardest

Since 1 July 2026, the EU has applied a temporary €3 customs duty to low-value imports sold at a distance. The duty is calculated for each distinct item according to its tariff classification within a consignment valued at no more than €150, rather than for every individual unit. Five identical T-shirts therefore attract one €3 charge, while a T-shirt and a watch attract two charges.

The scope of the measure has been presented differently across EU documents. The Council’s December 2025 announcement initially associated its application with flows processed through the Import One Stop Shop, or IOSS, which the Council said accounted for approximately 93% of imported e-commerce.

The Commission’s June 2026 operational guidance describes a broader scope, covering goods in consignments of up to €150 sold at a distance regardless of whether VAT is accounted for through IOSS, the special arrangements or standard VAT. The guidance identifies a limited exception for certain goods benefiting from preferential trade arrangements where IOSS has not been used and the goods are declared under the H1 procedure.

The application of the duty should therefore not be assessed solely by checking whether a merchant uses IOSS. An adviser examining a particular import model should consult the Commission’s current operational guidance, which is maintained as a living document and may be updated as implementation develops.

The fixed amount matters particularly for inexpensive products. On a tariff line worth €5, a €3 duty corresponds to 60% of its value. On one worth €100, the proportion is 3%. The measure therefore places the greatest pressure on the part of the assortment that enabled platforms such as Temu to expand rapidly in Europe.

The temporary duty is scheduled to apply until 1 July 2028, when the new customs arrangements for e-commerce are expected to become operational. It may be extended if the necessary systems are not ready by that date.

Holding inventory in the EU does not remove customs duties or import VAT, but it changes how they are handled because customs clearance applies to a larger batch of goods rather than to every parcel individually. The merchant gains shorter delivery times while assuming the costs of storage, inventory financing, returns and local administration.

A warehouse triggers VAT, GPSR and EPR obligations

Goods stored in Europe are subject to a different set of processes from parcels dispatched directly from Shenzhen.

IOSS can be used to account for VAT on distance sales of goods imported from outside the EU in consignments not exceeding €150. Goods that have already been imported and placed in an EU warehouse no longer qualify as distance sales of imported goods for IOSS purposes.

Where goods already located in the EU are sold to a consumer through an electronic interface and the underlying merchant is not established in the EU, the platform facilitating the transaction is treated as having received and supplied the goods for VAT purposes. This deemed-supplier rule follows directly from Article 14a(2) of Directive 2006/112/EC and applies regardless of the value of the goods.

Consequently, when a product is sold from a warehouse in Spain to a consumer in France, the platform, rather than the underlying Chinese merchant, accounts for the VAT on the consumer sale. Cross-border sales of this kind can be reported by the deemed supplier through the Union OSS procedure.

This does not eliminate the Chinese merchant’s obligations associated with holding inventory. If the merchant imports goods in its own name, retains ownership of the inventory or moves it between warehouses in different Member States, it may need a VAT registration in the country of import or storage and may have to account for transactions involving its own stock.

VAT on the consumer sale, which is handled by the platform as the deemed supplier, must therefore be distinguished from the import and inventory movements for which the Chinese merchant may remain responsible.

Product safety creates another layer of obligations. For goods covered by the General Product Safety Regulation, or GPSR, the required documentation and labelling must be in place, together with a responsible economic operator established in the EU. Depending on the product, sector-specific legislation, CE marking requirements and obligations concerning the monitoring and recall of unsafe products may also apply.

The importance of these obligations was underlined by the European Commission’s decision of 28 May 2026 to fine Temu €200 million for breaches of the Digital Services Act, including an inadequate assessment of the risk of illegal products being distributed through the platform. Tests conducted for the proceedings found that a high proportion of the selected chargers failed basic safety checks, while some toys intended for young children presented medium or high safety risks. Product documentation and supplier verification are therefore no longer merely administrative additions to logistics.

Extended producer responsibility, or EPR, is another part of the process. A merchant placing packaged products on a national market may need to register locally, report packaging volumes and finance the management of packaging waste. These obligations are administered through national EPR systems, including LUCID under Germany’s VerpackG, BDO in Poland and equivalent registers in other Member States.

The precise obligations depend on the sales model, the type of packaging and which entity is the first to place the packaged goods on the relevant national market.

A warehouse consequently becomes one component of a wider process involving customs clearance, EU VAT registration for warehoused stock, GPSR, EPR, document verification, warehouse-system integration and returns management. A company can purchase these services from several specialised providers rather than immediately building a complete European team of its own.

Temu itself does not have to be the client

The most likely client for a European service provider is not the platform itself, which already has internal teams and major contracts with logistics operators. It is the Chinese merchant, manufacturer or brand owner which gains access to local inventory arrangements but retains part of the operational responsibility.

Such a client may need a contract warehouse in the EU, a VAT registration in the country where its goods are stored, support with inventory movements, registration under a national EPR system, a responsible economic operator under GPSR, a review of product documentation or returns management across several markets. The company will not necessarily know the name of the service it needs or understand which obligations can be delegated to an external provider.

Precise descriptions of services therefore have commercial value. General terms such as “market-entry consulting” or “business support” provide little guidance to a company looking for a solution to a specific problem. Phrases such as “EU VAT registration for warehoused stock”, “Union OSS”, “GPSR responsible person”, “VerpackG and LUCID compliance”, “national EPR registration” and “cross-border returns management” correspond more closely to the language used in searches, industry platforms and AI-based tools.

A European provider does not need to perform all these tasks. It must show clearly which part of the process it can handle, the countries in which it can operate, the information required to begin the engagement and the responsibilities it is prepared to assume.

Conclusion

Temu is likely to retain a hybrid model combining direct shipments from China, sales by local European merchants and order fulfilment from inventory held within the EU. The importance of each channel will depend on the product category, order value and cost of local operations.

For European service providers, the most important development is the growth of a model in which Chinese merchants hold inventory in Europe. Once the first substantial batch of goods arrives, obligations relating to VAT, GPSR, EPR, customs clearance, documentation, returns and warehousing begin to arise. Where the underlying merchant is established outside the EU, the platform accounts for the VAT on consumer sales as the deemed supplier, but responsibility for imports, inventory and product compliance does not disappear when a product is listed on a marketplace.

The shift taking place around Temu therefore extends beyond the location of individual parcels. A growing share of the infrastructure required to sell those products must operate within Europe. This is where demand arises for local service providers whom Chinese companies must first be able to find, understand and compare.

EnterChina operates Xijinmenhu (西进门户), a Chinese-language platform where Chinese companies look for service providers in Europe. We publish Chinese-language profiles of European service businesses, receive enquiries from Chinese companies and handle the initial contact between the parties. We do not broker goods transactions, provide legal advice or sell leads.

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