The trend: In the wake of the US closing the de minimis loophole, several large Chinese ecommerce and logistics firms have been investing in European warehouses to offset US losses, per Bloomberg.
- Chinese companies have leased over 2 million square feet of warehouse space in the UK this year, with JD.com alone taking roughly 900,000 square feet, per CoStar. Other major investors include Super Smart Service, Top Cloud Logistics, and Daals.
- The same pattern is emerging across continental Europe. CTP NV, the region’s largest publicly traded industrial property developer, reports rising demand from Chinese makers of computers and furniture.
That aligns with a shift we identified earlier this year, when fast-fashion giants Shein and Temu boosted European ad spend in April as part of a pivot away from the US market.
The challenge: While the US has grown increasingly inhospitable, Europe isn’t exactly rolling out the red carpet.
- In July, the European Parliament voted to scrap the €150 ($174.58) customs duty exemption for low-value imports and impose a €2 ($2.33) levy on small parcels shipped directly to consumers.
- Beyond squeezing margins, the policy is designed to raise compliance costs and strengthen enforcement of EU rules, including the General Product Safety Regulation and Digital Services Act.
- Several firms are already under pressure from European regulators. Temu, for instance, has been accused of failing to protect users from illegal products—a potential breach of EU safety rules that could derail its plan to lean on Europe to offset US losses.
Our take: The days of rapid growth for Chinese ecommerce companies may be over. Europe might soften the blow from US losses, but it is unlikely to replace them—especially given the weak economic outlooks in France and Germany.