More than 110,000 million packages of all sizes are moved each year from China. A figure that challenges the laws of logistics in the world's largest e-commerce market. The dimension of this phenomenon, key in the digital revolution of the second-largest economy, is possible thanks to the well-oiled machine of unparalleled efficiency of a system that integrates big data, artificial intelligence, and a network of millions of couriers tirelessly covering practically every corner, no matter how remote, of this vast country.
E-commerce in China, with an annual transaction volume of over 40 trillion yuan (around six trillion euros), has become a fundamental pillar for economic growth. This digital ecosystem is dominated by tech giants like Taobao, the main Chinese online shopping platform of Alibaba, JD.com, and Pinduoduo.
The Chinese model, which prioritizes a variety of products at ultra-competitive prices and fast delivery, has long been exported under different names beyond its borders to revolutionize global e-commerce supply chains. This is where Shein and Temu come in. The former sells to more than 150 countries. The latter exceeds fifty. Both platforms are Chinese, but in China, no one knows them.
The market for Shein and Temu is mainly in the United States and Europe. Both companies, leaders in the so-called "ultra-fast fashion", have thrived with their unbeatable prices thanks to aggressive marketing combined with algorithms that scour social networks for micro-trends, allowing brands to cut production time and replenish orders quickly. Traditional designers have been replaced by engineers who also knew how to engage young Western buyers with a strategy that works very well in China: combining low prices with the boost provided by well-known streamers within the platforms who sell the products live.
This week, Shein and Temu, along with the also Chinese AliExpress, have unexpectedly entered the new trade war unleashed by President Donald Trump after the US Postal Service announced it would stop accepting packages from China and Hong Kong, although it reversed the decision late on Wednesday. Beyond the exchange of blows between the two titans of the geopolitical board, the European Union has also scrutinized Chinese e-commerce.
Brussels aims to control the 12 million daily packages entering the EU, of which over 90% are from Chinese companies. In 2024, imports of so-called "low-value products" have multiplied, and the EU received 4.6 billion products - up from 1.9 billion in 2023 - mostly from China. According to the European Commission, this poses risks to the environment and health, in addition to increasing competition for local manufacturers.
Until now, these packages only paid tariffs if they exceeded 150 euros. Brussels now intends to extend the fees to all packages. The purpose is to increase controls and protect European producers, which will raise the cost of shipments from outside the bloc.
Additionally, Brussels has announced that it will open an investigation into Shein for "unfair and unjust practices", as it did last year in another investigation against Temu. A report published a few days ago by the European Consumer Organization, based on tests conducted in Denmark, Italy, and the United Kingdom, concluded that "a high proportion" of products sold on Temu did not comply with EU regulations. For example, a laboratory inspection of some children's toys sold on Temu claimed that they released illegal amounts of boric acid that could be harmful to health.
Some observers have seen a nod to the Trump administration with this European move to try to eliminate tax-free entry of small packages from China. The EU estimates that, with this protectionist measure, it could recover 1 billion euros in taxes by 2027.
Just as in Europe, Chinese retailers used a legal loophole - known as de minimis, which exempts shipments under $800 from import taxes - in the US market to save millions of dollars in import fees by sending small orders directly to American consumers, bypassing major retailers.
This commercial exemption, eliminated last weekend by Trump, benefited the over 1 billion packages sent to the US last year, a significant figure compared to the 140 million a decade ago. Almost half of all packages sent under the de minimis regime come from China. According to a report from the Peterson Institute for International Economics, Shein and Temu are responsible for approximately 30% of the packages sent daily to the US.
It was clear that when the Postal Service announced the temporary suspension - later reversed - of packages from the Asian country, it was a measure connected to the looming new trade war. First, Trump attacked with 10% tariffs on Chinese products, to which Beijing retaliated with tariffs of up to 15% on some American products and new restrictions on critical mineral imports.
US media have reported that after this front was opened against Chinese packages, Temu, part of the Chinese empire of Pinduoduo, Alibaba's main competitor, has been prioritizing many more products that come directly from US warehouses in its app showcase.