The Temu tax fallout: A boon for retailers, a budget bust, a blow to media revenues

Romania's homegrown tax on small parcels from outside the EU – scrapped on November 1st after a 10-month run, making way for EU-wide levies – left behind an unexpected casualty: a sharp slump in the online advertising market, at least on the consumer-facing end of things.

The revelation came courtesy of eMAG CEO Tudor Manea, who dropped the bombshell at the tail end of a presentation on this year's Black Friday prep – which the retail giant is running on November 6 in Romania, and November 13 in Bulgaria and Hungary.

Manea insists Temu never really gave eMAG a run for its money; not enough, anyway, to stand out from ordinary sales swings. "Where you really felt it – and I've got the numbers to back this up – was that the moment they showed up, digital marketing costs across the board jumped 30-40%. And the moment they pulled back on digital marketing, costs dropped by about 20%... the CPC," the eMAG chief told Standard readers.

There's no audited figure for exactly how big this market is, but estimates hover around €300 million, which suggests the savings likely run into the tens of millions, to share between all players. It's equally tough to pin down how much of that money never trickled down to publishers in the first place, given that major platforms often pocket the full amount.

Still, the 20% figure tracks with what publishers have been seeing and feeling on their "display" earnings, i.e. the cut platforms, mainly Google, share with content creators. That price drop often piles on top of a steep volume decline, since Google increasingly serves up an AI-generated summary ahead of search results, which can tank traffic to this segment by as much as 70-80%.

Lucian Sârbu, marketing director at agency Pinbud, backs up the numbers and the breathing room online retailers – big and small – have gotten. But he's not convinced it'll last.

"I've got clients who've seen sales bounce back, at least somewhat, now that Temu's toy is broken. One of them runs a haberdashery business, about €300k a year in revenue. When Temu hit, they were flat on the floor. Now they can afford to put €3k a month into advertising. But long-term, Romanian businesses still won't shake off foreign competitors, since plenty of them are setting up warehouses right here. I'm seeing more and more big players even from Western Europe – electronics, kitchenware, organic food. What I tell my clients is to flip the script: go abroad themselves, with some chutzpah. I've got one client I'm pushing into Greece, another into Bulgaria," Sârbu explains.

The reason prices didn't fall by more than 20% despite the pullback from Temu, Shein and similar players is that Trendyol stuck around – an operator that dodges the tariff barriers entirely since it keeps warehouses inside the EU.

Between January and June – the only period for which full consolidated figures, published by Libertatea are available – the Romanian state collected 320 million lei from the tax, less than a quarter of its full year target of 1.3 billion lei, (hence half of a prospective collection graph). Starting July 1, an EU customs duty of €3 stacked on top of the Romanian tax, making it unlikely collection picked up pace afterward. As of November 1, a further EU processing fee of at least €2 kicked in, though overall costs are still dropping now that the 25-lei Romanian tax is gone.

Another possible – if hard to pin down – knock-on effect concerns inflation, which for non-food goods has stuck above 6% year-on-year, versus just over 2% for food.

eMAG's leadership says it isn't factoring inflation into this year's sales forecasts, and insists per-unit prices have actually gone down. All told, the company is aiming to shift 1.04 million lei – nearly €200 million – worth of product in a single day, up 5% on last year. Based on consumer habits seen so far, the expectation is that Black Friday will deliver, in just 24 hours, sales volume on par with an entire average month. The company also says sales are running at least as strong as last year, particularly during the second half.

This article is being updated