The model of overseas warehouse stocking will become a key driver of future growth for cross-border e-commerce. On November 25, Trump posted on Truth Social his intention to impose an additional 10% import tariff on China, in addition to the already planned tariffs. In July, during his U.S. presidential campaign, Trump was also reported to have considered increasing tariffs on Chinese imports to 60%.

In response to Trump's statement, Wang Shouwen, China’s Vice Minister of Commerce and International Trade Negotiation Representative, said at a State Council briefing that cross-border e-commerce is a vital force in international trade, both globally and within China. Despite the cancellation of preferential treatment for small packages, the inherent characteristics of cross-border e-commerce remain intact, meaning the sector continues to maintain strong competitiveness.

Cross-border e-commerce is expected to maintain rapid growth in 2024. According to data released by the Shenzhen government on July 26 regarding the economic performance for the first half of 2024, Shenzhen's export volume increased by approximately 360 billion yuan year-on-year, with cross-border e-commerce exports increasing by about 140 billion yuan, accounting for 18.6% of total exports. This proportion was only 10.57% in the same period last year. Additionally, general trade imports and exports grew by 46.5%, while cross-border e-commerce imports and exports grew by 1.3 times! In recent years, cross-border e-commerce has become a new driving force for foreign trade and is one of the few industries in China still experiencing rapid growth.

Cross-border e-commerce enables online transactions that bring factories with complete product manufacturing capabilities and brand owners into the global supply chain, bypassing intermediaries, thus improving the quality and efficiency of international trade. The sector’s success has attracted an increasing number of players to the global e-commerce market.

1、Structural Growth Path of Cross-border E-commerce

The development of cross-border e-commerce has been a continuous process, evolving through various stages based on the business models of major e-commerce platforms. During the evolution of these platforms, there has been diversification in the seller groups, enrichment in logistics fulfillment models, and continuous improvements in customer experience.

For example, before 2017, many Amazon sellers used direct small-package logistics for fulfillment, especially those selling large quantities of SKUs with unpredictable sales. These sellers, in order to reduce the financial pressure and inventory risks of stocking in overseas warehouses, typically chose direct small-package shipping. However, after 2017, as the number of Chinese sellers on Amazon grew and some early entrants scaled up, the volume of FBA (Fulfillment by Amazon) shipments via sea freight increased, and sea freight became the dominant logistics method.

Currently, sea freight has become the primary mode of transportation for FBA shipments, while airfreight and express shipping for FBA are decreasing. What is the reason for this shift?

First, airfreight is expensive. In 2024, airfreight prices on transatlantic and transpacific routes remain above 40 yuan per kilogram, with prices generally staying high since 2020 due to supply chain disruptions caused by the pandemic and the long-term mismatch between demand and supply in the industry. According to statistics from the XiaoSheng Research Institute, the weight of cross-border e-commerce parcels exported daily via air from China has exceeded 10,000 tons, requiring at least 200 long-haul wide-body freighters per day. However, there are only around 600 such freighters globally, and they must also carry commercial cargo, so they can't be exclusively used for cross-border e-commerce packages.

If the demand for airfreight is growing rapidly, why can't airlines simply purchase more planes? The issue is more complex. Boeing, the main supplier of long-haul wide-body freighters, can only increase production by a limited number of new aircraft each year, making it difficult for the growth in aircraft capacity to keep up with the expanding demand for cross-border e-commerce.

2、Analysis of the Overseas Warehouse Fulfillment Model

As small-package direct shipping faces high costs and limited capacity, e-commerce platforms have deliberately slowed the development of fully managed models (direct air freight) and shifted more resources towards semi-managed models (sea freight + overseas warehouse fulfillment).

For example, if you're a new Amazon seller, you may start by listing a few products and running ads to test the market. If you receive orders, you may choose air freight direct shipping, which avoids the need for overseas inventory management. This model works for beginners who want to minimize costs and risk.

However, as the industry evolves, a more structured approach is needed. With the increasing cost of air freight, new sellers can use sea freight services for FBA shipments. The supply of global sea freight capacity is generally abundant, and shipping time for sea freight is improving due to an increase in express routes. Furthermore, local delivery resources and services after customs clearance in destination countries have also become more abundant. With Amazon's push for a split warehouse policy in 2023, sellers can more efficiently stock inventory in FBA warehouses closer to customers, ensuring faster delivery times.

Amazon’s Supply Chain by Amazon (AWD) solution, launched in 2023, also improves inventory management by automatically replenishing stock at various fulfillment centers based on real-time algorithms. This system ensures better logistics efficiency and customer experience.

3、Progression of E-commerce Seller Logistics Fulfillment Models

As more factories join the cross-border e-commerce market, the scale of sellers continues to grow. Cross-border e-commerce is transitioning from the traditional product export model to one focused on branding and supply chain management. This evolution encourages sellers to integrate manufacturing capabilities with supply chain management and build a global sales and fulfillment system.

In the future, cross-border e-commerce will increasingly integrate with local e-commerce platforms, merging online and offline retail. The scenario of "one warehouse for multiple sales channels" in overseas warehouses will become more common. Ultimately, cross-border e-commerce will return to its essence—trade and retail, and cross-border logistics will evolve to support global fulfillment capabilities.

China’s companies are seizing the historic opportunity for global expansion in cross-border e-commerce!