China’s low-cost e-commerce exports, which have been expanding for the past six years, fell 10.9% in April to $9.81 billion.
Like most other sectors, China’s e-commerce push has also slowed down as a result of the Iran crisis. As jet fuel prices surge and demand from lower-income consumers in the West shrinks, Chinese giants like Shein, Temu and AliExpress have complained that profits are inevitably threatened.
Trump tariffs and the removal of the US tariff exemption for package shipments valued under $800 had already dented profit margins in the Chinese business model, which involves exporting clothes for as little as $5 worldwide. Known as the de minimus exemption, this tax exemption allowed tax-free import of goods priced below $800 into the US and has been instrumental in fostering small business growth on e-commerce marketplaces.
Delivery services like DHL Express have also hiked up service charges to make up for soaring logistics costs. While prices are increasing, the company’s Chief Executive Mike Parra recently confirmed in an interview that DHL Express Europe’s aviation fuel supplies are secure for the summer despite geopolitical turmoil and global scarcity concerns. Parra’s reassurance was a result of easing market pressures and diversified sourcing.
China’s low-cost e-commerce exports, which have been expanding for the past six years, fell 10.9% in April to $9.81 billion. Data analysts have pointed out that this is the fifth consecutive monthly decline compared to a year ago. Exporters are conveniently pushing the cost burden onto consumers in order to protect their profit margin, as shipping costs have increased. While there is a slow decline in demand, China’s producers agree that there is no need to change shipping arrangements right now.
Declining export values, along with cost compression, suggest that the big low-cost shopping platforms’ period of hyper-growth may be coming to an end. Instead of exporting straight from China, producers are more likely to ship more goods in bulk into warehouses for local distribution. Considering the price of air freight in relation to the commodity’s value, this is the most suitable course of action. In most cases, air freight is nearly 60% of the cost of the clothes.
Shein has been increasing the capacity of its warehouses around Europe, and last month it opened its third location in Cannock, Britain, close to Birmingham. Despite the unpredictability of international transportation prices, Alibaba is committed to preserving value-for-money pricing for customers and offering a stable environment for sellers and buyers.
However, all hope is not lost, as the numbers are still favourable. Chinese e-commerce exports are still higher than they were two years ago, and it must be noted that Beijing began 2025 with high tariffs being levied on its outbound shipments to Washington. But analysts are warning that given the recent political and economic developments, returning to the growth recorded in the past couple of years will be challenging.
This is because both Shein and Temu have gained significant market share, and their target consumers, mainly based in the US and Europe, are pinching their pockets as petrol prices spike. To further their woes, starting July 1, these online retailers will also be hit with a 3-euro customs duty fee on low-value parcels arriving into the European Union (EU) as part of the bloc’s efforts to crack down on cheap Chinese e-commerce. The duty will remain in place until a permanent solution is found to eliminate the de minimis duties exemption for online purchases below 150 euros.
According to market experts, jet fuel prices will stay inflated even after the Iran crisis is resolved. There is also speculation that if air freight becomes too expensive, these e-commerce companies may resort to alternative modes of transport or hold back some of their shipments.
