China's e-commerce export boom is losing momentum as the Iran war drives up jet fuel costs and dampens demand from lower-income consumers in the West, putting profits at risk for major retailers including Temu, Shein and AliExpress.
The business models, based on flying $5 dresses from Chinese factories to shoppers around the world, were already under pressure after U.S. President Donald Trump introduced tariffs and axed customs waivers on low-value parcels last year.
Soaring logistics costs stemming from the Middle East conflict are adding to the strain, data shows and industry insiders say, with shippers like DHL Express imposing hefty fuel surcharges.
China's low-cost e-commerce exports, which have surged over the past six years, fell 10.9% in April to $9.81 billion, the fifth consecutive month of declines compared to a year ago, according to an analysis of Chinese customs data by Luxembourg-based consultancy Trade and Transport Group.
Passing on costs to consumers
