China's low-cost cross-border platforms, including Temu, Shein, and AliExpress, are being squeezed as the Iran conflict drives up jet fuel costs and demand from lower-income Western shoppers softens, with China's cheap e-commerce exports down 10.9% year-over-year in April, a fifth straight monthly decline. The strain compounds earlier hits from U.S. tariffs and the end of customs waivers on low-value packages, with shippers like DHL Express adding fuel surcharges that sellers pass on to customers. In response, the platforms are leaning harder into local warehousing for nearby dispatch, such as Shein's new UK warehouse near Birmingham, rather than shipping everything directly from China, a shift hinting that the era of breakneck low-cost growth may be cooling.
