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AsianFin -- Global cross-border e-commerce is entering a new era—less defined by hypergrowth, more by hard-won margins.
In the first quarter of 2025, escalating trade tensions and shifting tariff policies under a second Trump administration sent shockwaves across the $800 billion cross-border e-commerce sector. Industry giants from Amazon to Temu and Shein are now recalibrating strategies amid rising operational costs, regulatory scrutiny, and slowing demand in key Western markets.
Data compiled by Global Expansion Reference reveals a sharp moderation in revenue growth and a mounting focus on profitability. The era of blitzscale expansion is giving way to a more disciplined phase of high-quality development.
Amazon reported $57.41 billion in global e-commerce revenue in Q1, up 5% from a year earlier—its slowest growth rate in three years. North American sales rose 7.6% to $92.89 billion, a deceleration from 12% in Q1 2024. Yet net income surged 64% to $17.1 billion, buoyed by AWS and advertising.
eBay, which has leaned into tariff-resilient verticals like auto parts and collectibles, saw net profit rebound 14.8% after a steep decline last year. Alibaba's international arm, AIDC, posted RMB 33.58 billion in revenue—up 22% year-on-year but down sharply from 45% growth in the same period last year. Losses narrowed slightly, though AIDC remains deep in the red.
PDD Holdings' Temu, once the sector's fastest-growing disruptor, reported just 10.2% revenue growth in Q1, down from 130.7% a year ago. Transaction service growth—home to Temu—slowed to 6% from 327%. Q1 net profit for PDD fell 45% to RMB 16.9 billion, with analysts citing widening overseas losses.
"This is no longer a land-grab game," said Liu Jun, VP of Finance at PDD. "The environment has fundamentally changed."
AIDC's FY2025 revenue grew 29%, far below the 46% jump a year earlier. Annual losses widened to RMB 15.14 billion, and adjusted EBITA plummeted 88%.
Temu parent Pinduoduo posted 59% FY2024 revenue growth—down from 189% in 2023. Transaction service growth fell to 108% from 241%. Meanwhile, Shein's valuation dropped to $45 billion from a 2022 peak of $100 billion. Profit fell over 70% in the first half of 2024, according to The Information.
ByteDance's e-commerce expansion also faces headwinds. TikTok Shop's global push lifted ByteDance's overseas revenue 63% in 2024 to $39 billion, but profit growth slowed to 6%, as margins narrowed from 26% to 21% amid AI and logistics investments.
Market Reorientation: Europe in Focus, Southeast Asia Rises
Amid cooling U.S. growth and tariff headwinds, platforms are shifting capital toward Europe and Southeast Asia.
Temu increased digital ad spend in France by 40% in April, while Shein boosted UK and French campaigns by over 35%. Temu's EU sales jumped 60% YoY in early May, while Shein posted double-digit gains across the region.
TikTok Shop plans launches in Germany, France, and Italy this year, with Brazil and Japan on deck. Alibaba's Jiang Fan reaffirmed AIDC's focus on Southeast Asia and the Gulf, alongside fresh investments in Europe.
Amazon, meanwhile, consolidated its Southeast Asia operations, naming Vietnam as its regional hub and expanding local hiring to bolster merchant acquisition.
As growth slows, competition is intensifying not only for users—but also for sellers.
Temu is pressuring suppliers to undercut Amazon on price, while Shein runs over 150 merchant roadshows annually. TikTok Shop slashed entry barriers in late 2024, and AliExpress launched a "10 Billion Yuan Subsidy" program targeting major Chinese brands.
Amazon has cut apparel commissions and expanded seller recruitment events across China. More than 20% of merchants on Shein and Temu are also active on Amazon, according to Seller Sprite.
New operational models are emerging. Platforms are shifting from fully managed to semi-managed models to ease seller onboarding. But this requires heavier investment in warehousing and logistics, pushing up platform costs and compressing margins.
Sellers Face Rising Costs, Shrinking Margins
Even as revenue rises, many listed sellers are watching profits erode.
