Cross-border E-commerce: Growth in volume, gaps in profit

The illusion of shopping like a billionaire

By the time this feature reaches its readers, the e-commerce world will have continued to be stirred by a curious paradox. According to Trade and Transport Group it will be known that consumers have been invited to “shop like a billionaire”. This has been a bold slogan used by one of China’s most aggressive online marketplaces. At the same time, the very logistics that have enabled this strategy are being found to mirror the thin financial margins that plague the airline sector. This has cast a long shadow over the cheer of inexpensive goods.

The surge in cross-border E-commerce

This narrative has been shaped by the remarkable expansion of low-value cross-border e-commerce, most of which is shipped from China. It has been revealed that over the past three years, the five key platforms, including giants like Alibaba, Amazon, eBay, Pinduoduo and Shein, have grown the share of international air cargo from around 15% to an estimated 25-30% of all international freight by volume.

The spike in air cargo directed from Asia to Europe and to the United States has been particularly striking. In the data offered, air cargo volumes from the Asia-Pacific to Europe have been seen to climb by 47%. In the US, they have risen by 37% compared with the end of 2019. That growth has been powered in large part by the flood of low-value items such as cheap electronics, fashion accessories and basic homewares purchased through e-commerce platforms.

The five giants of cross-border trade

According to the report published by Trade and Transport Group, there are five most important platforms in this business that have come to dominate the movement of parcels across borders. They have also reshaped the role of international logistics.

Alibaba has remained one of the most powerful drivers of the trade. Its consumer-facing arm, AliExpress, has connected millions of Chinese small and medium sellers directly with overseas buyers. This direct-to-consumer model has bypassed traditional retail networks. Goods have moved in vast volumes by air at prices that undercut conventional sellers. For air cargo, Alibaba’s scale has meant consistent demand for lift, especially on routes into Europe, the Middle East and Latin America.

Amazon has played a different role. Although headquartered in the United States, its global marketplace has been increasingly filled with Chinese vendors. It has been estimated that more than half of third-party sellers on Amazon have been based in China. This has pushed cross-border shipments, both by air and sea, steadily higher. Amazon’s strict service standards have required sellers to depend heavily on air freight in order to meet delivery promises. For carriers, this has created a constant flow of parcels at tight schedules.

eBay, one of the pioneers of online selling, has continued to hold importance in the cross-border business. While its growth has been slower than newer platforms, it has maintained a significant base of international buyers looking for inexpensive items. Chinese sellers have used eBay as an accessible channel to reach Western consumers. This has ensured steady volumes of parcels. For airlines, eBay’s business has translated into smaller but reliable cargo flows that support overall trade.

Pinduoduo, known globally through its international app Temu, has been the most disruptive entrant in recent years. With its aggressive “shop like a billionaire” campaigns, Temu has used heavy subsidies and advertising to win consumers worldwide. Its promise of free shipping and deep discounts has been sustained by large losses, but it has driven massive parcel growth. For air cargo, Temu has created sudden surges in demand, particularly on Asia–US and Asia–Europe lanes. Millions of low-value parcels have been pushed into international networks.

Shein, the fast-fashion giant, has reshaped how clothing is bought and shipped. Its business has been built on speed, with designs moving from factory floor to consumer in a matter of weeks. That rapid turnover has made air freight indispensable. Shein has relied on international parcel networks to deliver low-cost clothing directly to buyers. It has avoided traditional retail and distribution systems. Its reliance on air logistics has been critical, making it one of the largest contributors to the increase in e-commerce cargo.

Together, these five platforms have changed the scale and shape of global logistics. Their business models have depended on keeping prices low, relying on volume, and pushing enormous quantities of parcels through air cargo systems. While consumers have benefited from cheap goods and fast delivery, airlines and logistics providers have been forced to handle greater volumes at thinner margins.

A billionaire’s dream, a carrier’s nightmare

Consumers around the world have been tempted to see themselves as billionaires, because goods have been offered at near rock-bottom prices. Yet it has become clear that behind the cheerful branding, a deeper financial struggle has been unfolding.

Airlines, which have long faced their own battles with razor-thin margins, have begun to see patterns familiar to them in e-commerce logistics. Much of the cross-border business has been conducted at negligible profit or outright loss for both the selling platforms and the carriers. It has been observed that, while growth in volume has been spectacular, profitability has very rarely followed.

Concerns within the air cargo sector

In response, experts in the air cargo sector have started to raise alarms. The risk has been assessed. If e-commerce cannot yield healthy returns, the stability of air logistics could be undermined. The question has been posed: can the sector continue to absorb the cost of moving such large quantities of low-value goods if they fail to contribute meaningfully to revenues?

The structure that has been supporting this growth is rooted in direct-to-consumer models. Sellers based in China, often manufacturers themselves, have attacked foreign markets directly. This has bypassed traditional distribution networks. The arrangement has created astonishingly low consumer prices, but it has also put immense pressure on warehousing and delivery costs.

Temu and the billionaire illusion

Temu, as an example, has been showcased as a star performer of this model. Its “shop like a billionaire” slogan has been spread through million-dollar Super Bowl campaigns. Its app has soared to become the most downloaded free app in the US during 2023. That aggressive push has dominated consumer awareness and spending habits. It has been bolstered by free shipping and “lightning deals” that have made buying feel urgent and opportunistic.

In global markets such as Europe, North America and beyond, consumers have embraced the low-cost convenience. But that enthusiasm has been feeding into a fragile system.

Volume without profit

Air cargo providers and financial analysts have started to emphasise that this surge in parcel movement is not rooted in sustainable profitability. It has been suggested that the current model, reliant on massive volumes of inexpensive goods, must soon be re-examined if long-term earnings are to be preserved. The industry has been pressed to consider whether it is simply servicing volume growth at the expense of sound fiscal health.

Meanwhile, commentators on both sides of the Atlantic have compared the situation to airline economics. Airlines have often struggled with low fares and heavy operating costs. E-commerce platforms have been in a similar position, jeopardising their margins while pushing prices ever lower.

The fragile promise of cheap goods

Global consumers have been drawn in by the “billionaire” illusion. It has been painted that lavish spending can be emulated by anyone with an app and a Wi-Fi connection. Yet logistically and financially, the systems behind it have become as brittle as the airlines. Failure to sustain yields can lead to sudden collapse.

It has been signalled that if profits remain elusive, the burden could shift back to consumers. This could happen through slower delivery, reduced selections, or the absorption of costs via surcharges.

A cautionary global tale

In considering the world’s experience with this new model, it remains true that markets have been enchanted by bargains, no matter how uncertain the rationale. The strategy has succeeded in driving engagement, but at a substantial cost. It has been highlighted that growth without profit is unsustainable. Consumers are being entertained at the expense of viability.

Through global eyes, the picture is one of caution. Ultra-low-price temptation has been effective in attracting shoppers worldwide. But it has been uncertain whether “shopping like a billionaire” can remain a viable option if the financial systems behind it and the logistics that enable it are forced to adjust.

The interlocking truths

In the end, this story has been framed by two interlocking truths. Flashy slogans and cheap deals can drive world-beating user numbers. Yet the cost of delivering those deals has begun to unravel the financial fabric of both e-commerce platforms and the air cargo industry. Growth, if not matched by profitability, is ultimately unstable. This is true in the skies, and across the globe.