China’s exports of cheap online goods decreased

After 6 years of strong growth, exporting cheap goods online through Temu, Shein and AliExpress has recently encountered difficulties. In April, turnover decreased by 10.9% over the same period in 2025, to 9.81 billion USD, marking the 5th consecutive month of decrease, according to analysis by Trade and Transport Group (Luxembourg), from China Customs data.

The country has been very successful with the method of exporting low-cost products, such as $5 dresses, from Chinese factories directly to global consumers.

But the model is under pressure, since US President Donald Trump imposed tariffs and ended duty-free incentives for low-value packages last year. The European Union also plans to impose a 3 euro fee on low-value e-commerce packages from July 1.

Along with that, logistics costs are currently increasing sharply due to the Middle East conflict. Data and sources of Reuters shows that carriers such as DHL Express have imposed significant fuel surcharges. Sharp increases in fuel prices also reduce the purchasing power of households in the US and Europe.

Diana Qiao, a women’s clothing seller on Temu in Shenzhen, said sales decreased slightly after increasing the price by 2 USD per product, due to an average increase in shipping costs per item of 1 USD. “The ultimate burden is still borne by the consumer,” she said.

Mr. Judah Levine, Head of Freightos transportation platform research, forecasts that air freight rates may continue to remain high, due to sharp increases in jet fuel prices and will take time to decrease, even when the Iran conflict ends.

According to analysts, the decline in online exports not only reflects cost pressure but also shows that the boom of cheap online goods may be over. The director of a freight forwarding business in China said that cross-border e-commerce platforms are entering a slower growth phase.

To adapt, platforms tend to shift to shipping goods in bulk to warehouses abroad and then delivering them domestically, instead of sending each parcel directly from China by air, according to Mr. Frederic Horst, CEO of Trade and Transport Group.

“That is completely reasonable when considering the cost of air transport compared to the value of the product. With a shirt weighing 300-400 grams, air transport costs can account for up to 60% of the cost,” he stated.

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 cost pressures.

A spokesperson for Alibaba – 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 fluctuations in global transportation costs”.

Mr. Martin Habisreitinger, director of air transport at Hellmann Worldwide Logistics (Germany), warned that if costs continue to remain high or increase, businesses may have to switch to other modes of transportation or reduce export volume.