IN Brief:
- Chinese low-cost e-commerce exports fell 10.9% year-on-year in April.
- Higher airfreight costs are pushing sellers towards bulk shipping and overseas warehousing.
- The shift is changing fulfilment models for platforms including Temu, Shein, and AliExpress.
Temu, Shein, and AliExpress-linked sellers are facing growing pressure from higher logistics costs, softer Western demand, and tighter customs rules, accelerating a shift away from direct airfreight from China towards bulk shipping and overseas fulfilment.
China’s low-cost e-commerce export model has relied heavily on fast international airfreight, with products sourced from Chinese suppliers, processed through platform-led logistics systems, and moved directly to consumers in Europe and North America as low-value parcels.
That operating model is now being tested by high jet fuel costs, pressure on household spending, and reduced customs advantages for small parcels. Chinese low-cost e-commerce exports fell 10.9% year-on-year in April to $9.81bn, marking the fifth consecutive month of decline.
The market remains far larger than it was before the recent platform boom, but the decline points to a more constrained phase of growth. Freight cost, customs treatment, and inventory location are now central operating variables rather than background logistics functions.
Airfreight is particularly difficult for low-value goods where product margins are thin and parcel weight is low. A higher linehaul cost can quickly take a disproportionate share of the selling price, forcing sellers to raise prices, absorb margin pressure, or change the way stock enters destination markets.
Shein has been expanding warehouse capacity in Europe, including a third UK warehouse in Cannock near Birmingham. That move reflects a wider shift in cross-border retail supply chains, where direct-from-origin fulfilment remains useful for long-tail assortment but destination-country warehousing becomes more attractive when airfreight costs rise and customs processes tighten.
The same question of inventory placement is appearing further upstream. Amazon’s Shenzhen global warehousing hub is designed to pool inventory closer to origin before stock is allocated across export markets. China-linked e-commerce platforms are now moving in both directions at once: building better origin-side control while also increasing overseas fulfilment capacity where speed and customs certainty require local stock.
Overseas warehousing changes the cost structure of the model. It can reduce dependence on individual air parcels, smooth customs exposure, improve local delivery speed, and support faster returns handling. It also increases working capital requirements, raises demand-forecasting risk, and requires more disciplined stock allocation before demand has fully formed.
Those trade-offs are especially sharp for platforms built on rapid assortment change. Holding inventory overseas supports service levels, but it also reduces the flexibility that made direct-from-China e-commerce attractive in the first place. Slow-moving stock becomes harder to reposition, while fast-moving stock needs more accurate replenishment planning across multiple national markets.
Customs policy is adding another layer of pressure. The US removal of low-value parcel customs waivers has already changed the economics of direct shipment, while the European Union is preparing a fee on low-value e-commerce parcels. Border processes that once supported friction-light small parcel movement are becoming more expensive and more visible in the fulfilment equation.
The logistics flow profile is likely to become more mixed. Direct airfreight will remain useful for fast-moving, high-demand, or test-and-learn products, but more volume may shift into ocean freight, regional warehousing, parcel hubs, and returns centres. That change will place greater strain on inventory systems, customs planning, warehouse capacity, demand forecasting, and reverse logistics.
Large platforms with enough scale to operate local fulfilment networks may be better placed to absorb the change. Smaller sellers could face a harder choice between slower delivery, higher pricing, and reduced margin. Logistics cost has moved from an enabling condition of China’s low-cost e-commerce boom to one of the forces reshaping it.
