Cross-border E-commerce Risks Escalate in U.S. Market: Is Europe the Next Promising Market? | Exploring Overseas Consumer Markets (AI Translation)

跨境电商美国市场风险升级 欧洲是下一个好市场么？｜出海·消费

[para. 1] The article from Caixin Online discusses the challenges faced by Chinese cross-border e-commerce platforms due to changing international trade policies. In response to the U.S.'s removal of duty-free policies for Chinese small packages and a 10% tariff on all Chinese imports as announced by former President Trump, cross-border e-commerce companies are diversifying their market reach to reduce dependence on a single market, notably the U.S. [para. 2] These policy changes have introduced high risks for companies that rely heavily on exporting small packages to the U.S., creating a need for exploring other markets like Europe.

[para. 3] Platforms like Temu and SHEIN have shifted their focus to Europe, expanding operations aggressively in markets such as the UK, Spain, and Ireland. For instance, TikTok Shop has not only established a significant presence in the U.S. but is also expanding into Europe, despite the associated risks. [para. 4] Alibaba's activities in Spain, including the launch of the Miravia platform and the logistics service Cainiao, show a strategic push into the European market. Cainiao has developed a strong delivery network in Spain and Portugal, offering competitive services like next-day delivery.

[para. 5] An example of this expansion is SHEIN leasing significant warehouse space in Poland to establish a distribution center. This reflects the broader trend of Chinese e-commerce companies establishing large-scale warehouses across Europe to support their operations. While the U.S. remains the largest market for SHEIN, Europe is becoming increasingly important as a growth area. [para. 6] Europe's consumer purchasing power is comparable to that of the U.S., with anticipated e-commerce sales in 2024 reaching 958 billion euros, an 8% increase year-over-year.

[para. 7] The main European markets of focus for Chinese companies are the UK, France, Germany, Spain, and Italy. Spain has a high penetration rate for Chinese goods due to its economic level, and now France is starting to show similar trends. [para. 8] The European market is highly price-sensitive, especially in Spain, with an increasing attraction to discounts and second-hand transactions. Despite higher entry barriers than emerging markets, Europe represents a promising market for Chinese e-commerce platforms due to its strong purchasing power.

[para. 9] However, stringent compliance requirements, covering aspects like taxation, data security, and environmental standards, present significant challenges for entering the European market. [para. 10] The fragmented nature of the European market necessitates customized marketing strategies and significant investment in compliance and marketing efforts, varying from one country to another.

[para. 11] Policy dynamics are also shifting, with new regulations aiming to enhance consumer protection and tackle unfair competition. The Digital Services Act (DSA) subjects large platforms with over 45 million monthly active users to stringent regulations, impacting Chinese platforms like AliExpress, TikTok, SHEIN, and Temu. Recent investigations by the European Commission into Temu and SHEIN for possible regulatory violations highlight these challenges.

[para. 12] In response to concerns about the environmental and competitive impacts of low-value package imports, the European Commission has proposed new actions. This includes potential customs reforms and measures to ensure product safety, as imports of low-value goods expected to reach 4.6 billion in 2024 pose risks to local businesses and the environment. The European Commission is urging regulatory changes to level the competitive field for European sellers and ensure compliance with high product standards.