Major Chinese online shopping platforms are experiencing significant challenges as escalating jet fuel prices and reduced consumer spending power in Western nations connected to Middle Eastern conflicts impact their profit margins.
Popular platforms including Temu, Shein and AliExpress are feeling the pressure from these mounting costs, which affect their business strategy of shipping inexpensive items like $5 dresses directly from Chinese manufacturing facilities to customers worldwide.
These companies were already facing difficulties after the U.S. President introduced new tariffs and eliminated customs exemptions for small-value packages in the previous year.
Rising transportation expenses related to Middle Eastern tensions are creating additional challenges, according to industry data and experts, with shipping companies such as DHL Express implementing substantial fuel-related fees.
Data analysis from the Luxembourg-based consultancy Trade and Transport Group reveals that China’s budget-friendly e-commerce shipments, which had grown dramatically over six years, decreased by 10.9% in April to $9.81 billion, representing the fifth month in a row of year-over-year declines.
Diana Qiao, who operates a women’s clothing business on Temu from Shenzhen, explained that she increased her product prices by $2 due to a $1 rise in shipping costs per item.
“The final burden is ultimately borne by consumers,” Qiao stated, explaining that the price adjustment was necessary to maintain her profit levels, and while sales have dropped somewhat, she hasn’t yet found it necessary to modify her shipping methods.
Industry experts and analysts suggest that declining export numbers indicate not only financial pressure but also signal that the period of explosive growth for major discount shopping platforms may be ending.
Frederic Horst, who serves as managing director at Trade and Transport Group, believes these companies are likely shifting toward storing larger quantities of merchandise in regional warehouses for local distribution instead of flying everything directly from China.
“It would make sense given the air freight cost relative to the value of the product,” Horst explained. “If you’re buying a top that is 300-400 grams you’re getting to the stage where air freight is 60% of the cost.”
Shein has been increasing its European warehouse operations, recently launching its third facility in Cannock, located near Birmingham in Britain.
An Alibaba representative, which owns AliExpress, informed Reuters that the company continues to focus on “maintaining value-for-money pricing for consumers and providing a stable environment for sellers and consumers despite the volatility in global transportation costs.”
Neither Shein nor Temu provided responses to inquiries regarding how air freight expenses are affecting their operations.
While export levels remain significantly higher than two years ago, and early 2025 saw considerable advance purchasing before U.S. tariffs took effect, returning to previous growth rates will prove more difficult.
This challenge stems from Shein and Temu having already captured substantial market portions, while rising fuel costs are straining household finances across the U.S. and Europe. Additionally, the European Union plans to implement a €3 charge on small-value e-commerce packages starting July 1.
A China-based freight forwarding executive, who requested anonymity due to media restrictions, noted that while air freight expenses have an impact, the platforms are also experiencing a period of slower expansion, and international consumer spending is declining due to inflation.
Judah Levine, who leads research at freight platform Freightos, indicated that air freight prices will likely remain elevated due to jet fuel costs and will require time to decrease even if Middle Eastern conflicts resolve.
“If the costs stay very high, or even increase further, companies may switch to other modes of transport or hold back some of their shipments,” said Martin Habisreitinger, chief operating officer of airfreight at Hellmann Worldwide Logistics.
