After six years of strong growth, online sales of cheap goods via platforms like Temu, Shein, and AliExpress have recently faced difficulties. In April, turnover decreased by 10.9% compared to April 2025, reaching 9.81 billion USD. This marks the fifth consecutive month of decline, according to analysis by Trade and Transport Group (Luxembourg), based on China Customs data.
China had previously achieved great success with this export method, using air freight to send cheap products, such as dresses costing only 5 USD, directly from Chinese factories to global consumers.
However, this model has been under pressure since US President Donald Trump imposed tariffs and ended tax exemptions on low-value packages last year. The European Union also plans to apply a 3 euro fee on low-value e-commerce packages starting July 1.
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Logos of Shein and Temu photographed on 22/8/2024. *Reuters* |
Concurrently, logistics costs have surged due to the Middle East conflict. Data and Reuters sources indicate that carriers like DHL Express have implemented significant fuel surcharges. Sharply rising fuel prices have also reduced the purchasing power of households in the US and Europe.
Diana Qiao, a women's clothing seller on Temu in Shenzhen, stated that sales saw a slight decrease after she raised prices by 2 USD per product, as the shipping cost per item increased by an average of 1 USD. "The burden ultimately falls on consumers", she said.
Judah Levine, head of research at Freightos transportation platform, predicts that air freight rates could remain high due to surging jet fuel prices, and it will take time for them to decrease, even if the Iran conflict ends.
According to analysts, the decline in online exports not only reflects cost pressures but also suggests that the boom era for cheap online goods may be over. The director of a freight forwarding company in China believes that cross-border e-commerce platforms are entering a slower growth phase.
To adapt, platforms are tending to shift towards shipping bulk goods to overseas warehouses for local delivery, rather than sending individual parcels directly from China by air, according to Frederic Horst, managing director of Trade and Transport Group.
"That makes complete sense considering air transport costs versus product value. For a shirt weighing 300-400 grams, air shipping costs can account for up to 60% of the price", he explained.
Shein is expanding its warehouse system in Europe. Last month, the company opened its third warehouse in Cannock, near Birmingham (UK). Shein and Temu did not comment on the cost pressures.
An Alibaba spokesperson, owner of AliExpress, said the company remains focused on "maintaining competitive prices for consumers and ensuring a stable business environment for both sellers and buyers, despite global transport cost fluctuations".
Martin Habisreitinger, director of air freight at Hellmann Worldwide Logistics (Germany), warned that if costs continue to remain high or increase, businesses might have to switch to other shipping methods or reduce export volumes.
By Phien An (Reuters)
