For years, American consumers have enjoyed a steady stream of incredibly cheap Chinese goods flowing directly to their doorsteps. The $10 t-shirts, $15 electronics, and $5 household items that populated platforms like Temu and Shein seemed almost too good to be true. And in a way, they were – propped up by a little-known trade provision called the “de minimis exemption” that allowed packages valued under $800 to enter the United States completely duty-free.

But as of May 2, 2025, that era of Chinese import tariff-free bargain hunting has abruptly ended. President Donald Trump has officially closed this loophole, meaning those same goods could now cost more than double as they face tariffs of up to 145%. The $10 t-shirt you ordered last month might now cost $24.50. The household gadget that was once $20 could balloon to nearly $50. The seismic shift has sent e-commerce giants scrambling to adapt their business models and left American consumers facing a new reality: the days of ultra-cheap Chinese imports are over. As Temu blocks US shoppers from seeing Chinese import products and Shein quietly incorporates the cost from tariffs into its pricing, we’re witnessing nothing less than a fundamental restructuring of global e-commerce dynamics.

What was the de minimis exemption?

The de minimis exemption, introduced in 1938 as Section 321 of the Tariff Act of 1930, allowed packages valued under $800 to enter the United States duty-free. The provision was originally designed to facilitate trade by eliminating the administrative burden of collecting negligible duties on low-value goods at a high cost to the government. Over time, this exemption became what a Congressional Research Service report called the “primary path” for Chinese exports to enter the US market From 2018 to 2023, the value of low-value e-commerce exports from China ballooned from $5.3 billion to $66 billion, according to a February report from the Congressional Research Service. US Customs and Border Protection processed a billion such packages in 2023, the average value of which was $54.

Why did Trump end the exemption?

In a cabinet meeting at the White House on Wednesday, Trump referred to the loophole as “a big scam going on against our country, against really small businesses,” he said. “And we’ve ended, we put an end to it.” The Trump administration cited multiple reasons for eliminating the exemption:

• Fentanyl concerns: President Trump in February said he would eliminate the loophole because he didn’t believe China was taking sufficient action to stem the flow of fentanyl into the US The administration said drug traffickers were “exploiting” the loophole by sending precursor chemicals and other materials used to manufacture fentanyl into the United States without having to provide shipping details.
• Protecting American businesses and jobs: The growing use of the loophole also threatened US jobs in warehousing and logistics. It encouraged major American retailers to ship more products directly from China to consumers’ doorsteps, avoiding larger shipments that were subject to tariffs and then distributed through US warehouses and delivery networks.
• Supporting domestic manufacturers: Kim Glas, the president of the National Council of Textile Organisations, which represents American textile makers and fought to eliminate the loophole, said it had “devastated the US textile industry.” Glas said it had allowed unsafe and illegal products to flood the US market duty-free for years.

How are retailers responding?

Major Chinese e-commerce platforms are already adapting their business models:

• Temu announced a dramatic shift to its business model. “All sales in the USare now handled by locally based sellers, with orders fulfilled from in the country,” the company said in a statement to CBS MoneyWatch. The company said on Friday that it would no longer ship products from China into the United States. Temu saidthat it “has been actively recruiting USsellers to join the platform,” and that “all sales in the USare now handled by locally based sellers, with orders fulfilled from in the country.”
• Shein announced it would begin adjusting prices on April 25. The company’s website tells shoppers that tariffs are “included in the price you pay.”
• Other retailers have started displaying tariff surcharges in their online shopping carts to help consumers understand where added fees are coming from.

Impact on consumers and markets

The end of the de minimis exemption will have far-reaching consequences:

• Higher prices: According to The New York Times, Gabriel Wildau, a China analyst at Teneo, an advisory firm, said the change would “take a bite out of Chinese exports” and “force online retailers whose main selling point is dirt cheap prices to raise their prices dramatically.” Wildau warned, “It’s a price shock for price-sensitive US consumers who really enjoyed access to cheap goods.” The same article notes that goods coming into the United States from China via private carriers like DHL or FedEx will be subject to tariffs of at least 145% – for example, adding $14.50 of duties to a $10 T-shirt.
• Potential product availability issues: Mary Lovely, an international trade expert and senior fellow at the Peterson Institute for International Economics, told CBS News “You’ll see a much-diminished market and at some point, it won’t be worth it to import to a small market,” so you’ll see products disappearing. As reported by Wired, Temu is currently blocking US shoppers from seeing products shipped from China, effectively narrowing the number of goods for Americans to choose from.
• Shipping delays: Ryan Young, a trade policy expert at the Competitive Enterprise Institute, explained to CBS MoneyWatch that “It will be an administrative nightmare, so you will see a lot of delays.”
• Changing consumer behaviours: According to CBS News, PwC consumer markets industry leader Ali Furman expects to see consumers start “trading down” by swapping name brands for store labels or even turning to resale platforms to stretch budgets.

Potential loopholes and enforcement challenges

Despite the administration’s intentions, several potential issues remain: Goods that come into the US from China via private carriers like DHL or FedEx will be subject to tariffs of at least 145%. But shipments that come in through the Postal Service face either a tariff of 120% of the value of the goods or a fee of $100 per package, which increases to $200 in June. The Postal Service appears to face less scrutiny for collecting tariffs on goods shipped from China to other countries and then into the US through foreign postal services. However the Postal Service has not been legally required to collect information on where products originate, and neither are foreign postal services. That could lead to an increase in schemes that try to bypass China tariffs by using the post office. Experts also question whether the government has enough CBP agents to efficiently inspect packages and enforce policies. Ram Ben Tzion, CEO of Publican, a company that authenticates shipment documentation, told CBS MoneyWatch: “As these adjustments are made, a key question remains, which is the ability of CBP to effectively regulate and enforce these measures. As of today. CBP does not have that ability.”

Who benefits?

While consumers may face higher prices and delays, certain groups stand to benefit from this policy change: Companies that sell goods made in the US could face less competition as previously cheap China-made goods rise to new price highs. Larger corporations with bigger profit margins, or more diversified businesses, will likely fare better than smaller retailers that operate on thin profit margins, making it difficult to re-jigger supply chains.

The future of e-commerce

As both retailers and consumers adjust to this new reality, the landscape of online shopping is fundamentally changing. Ben Tzion said to CBS MoneyWatch, “the way we shop online will never be the same.” Specifically, “everything will take more time, cost more money, and everything that’s price-sensitive won’t be available,” he said. For Asian businesses exporting to the US, this represents a significant shift in the economics of cross-border e-commerce. Companies will need to reassess their supply chains, and pricing strategies, and possibly even consider establishing US-based operations to remain competitive in this new environment where the days of duty-free Chinese imports under $800 are now firmly in the past. The Chinese import tariffs policy change marks not just the end of an era of ultra-cheap online shopping, but also signals a broader realignment of global e-commerce dynamics that will continue to unfold in the coming months and years.

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Zebra Technologies wants to change how AI-powered frontline operations to reshape Asia Pacific’s business landscape in 2025, as Asian organisations face pressure to maximise efficiency. The transformation comes at a important time – CISQ estimates that poor software quality cost US businesses alone $2.41 trillion in 2022, underscoring the urgent need for practical, purpose-driven technology solutions that deliver accurate results.

“Elements of our three-pillar strategy have been around for quite some time, but what’s changing the frontline today is intelligent automation,” said Tom Bianculli, chief technology officer at Zebra Technologies, speaking to reporters at a briefing during Zebra’s 2025 Kickoff in Perth, Australia. “We’re not just digitising workflows – we’re connecting wearable technology with robotic workflows, enabling frontline workers to interact with automation in ways that were impossible just five years ago.”

Changing retail with AI-powered frontline operation

The transformation is already yielding results in real-world applications, according to Zebra Technologies. Bianculli highlighted a recent co-innovation with a major North American retailer: “You snap a picture of a shelf in one second, the traditional AI identifies all the products on the shelf, identifies where there’s missing product, maybe misplaced product. Then it makes that information available to a genAI agent that then decides what should you do.” What traditionally required multiple manual steps now happens automatically. “If it sees what’s missing and there’s back stock, it automatically generates a task for someone else, the right person, to fill that back stock,” Bianculli explained. He said the automation enables retailers to accomplish with three people what previously required four.

APAC’s strategic transformation

The APAC region is proving to be particularly receptive to these types of innovations. According to IBM research presented at the briefing, 54% of APAC enterprises now expect AI to deliver long-term innovation and revenue generation opportunities. The region’s 2025 AI investments reflect that optimism:

• 21% of investment is focused on enhancing customer experiences
• 18% is directed at business process automation
• 16% is invested in sales automation and customer lifecycle management

Ryan Goh, senior vice president and general manager of Asia Pacific at Zebra Technologies, showcased practical applications already in use: “We have customers in e-commerce using ring scanners to scan packages, significantly improving their productivity compared to traditional scanning methods,” he said.

Technology at the edge

Zebra’s approach to frontline operations focuses on:

1. AI devices: Built with native neural architecture to support on-device AI models
2. Multimodal experiences: Models that can see, hear, interpret, and speak just like a cognitive human being
3. GenAI agents: Models that distribute workload between device and cloud for specific workflows

“We are also working [running] some of these large language models actually down on the device,” Bianculli revealed, presenting solutions for environments where there is no internet connectivity. “If we can run the model down on the mobile computer, we can still enable those use cases in those environments.”

Market-specific solutions

The company’s regional strategy addresses distinct markets in the APAC’s diverse economic landscape. Ryan expressed optimism for the region’s key markets, particularly as now follows a period of market adjustment during which customers had previously overbought. Technology adoption is surging in India, for example, where GDP is projected to grow by 6.6%, with manufacturing showing 7% year-over-year growth. 96% of Indian organisations surveyed by WEF are running AI programs, the press were told, and the company’s focus is on enhancing operational efficiency through foundational technologies.

“Tech – from barcodes and RFID, will enable sectors like logistics to overcome challenges and grow,” Goh explained, stating how basic automation can drive digital transformation.

Japan presents unique opportunities, with a projected 1.2% GDP growth and 70% GDP derived from services. Transport and logistics and rising domestic and tourist retail activity are the primary growth-drivers. The country’s distinct challenge with labour shortages and an ageing workforce is accelerating automation adoption. This has led to unexpected applications of some of Zebra’s solutions, particularly in the tablet sector.

“We used to think that tablets are for retail, but the Bay Area proved us wrong,” Goh said. “A lot of [tablets] are in manufacturing. We have also recently launched our new tablet portfolio. KC50 is a kiosk that enables retailers to move the task of scanning payment right to customers rather than having staff do it.” The shift exemplifies how market-specific challenges are driving innovative application of existing technologies. For example, in regional implementations, Goh said customers can unexpectedly optimise workflows. “We have a customer optimising workflow in their warehouse with RFID. That helped improve [and] optimise workflow, drive efficiency and reduce mistakes.”

Future-ready operations

According to Gartner’s projections, by 2027, 25% of CIOs will use augmented connected workforce (ACWF) initiatives to reduce training times by 50% for certain roles. This aligns with Zebra’s recent announcement of its Z Companion that uses generative AI and large language models. It’s set for pilot deployment with select customers in Q2 of this year. With approximately $5B in global sales, 120+ offices in 55 countries, and 10,000+ channel partners across 185 countries, Zebra is positioning itself in the middle of the region’s transformation.

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Engage allows marketers to follow a “learn, adapt, convert” approach, gathering insights on visitor interactions and behaviour through detailed profiling and analytics. Users can then adapt these insights to test different content versions (A/B testing) to personalise user experiences. Then, marketers can improve their content based on this data to increase visitor engagement, conversion rates, and return of investments (ROI).

Umbraco Product Communications Manager, Rune Strand, emphasised the immediate impact and benefits Engage offers to marketing teams, saying, “as soon as Engage is installed on existing or new sites, marketing teams can instantly see how well web content is performing. Pageview analytics and statistics are all at their fingertips in the Umbraco CMS interface.”

Strand also observed the benefits of heat maps, a feature provided by Engage. “Being able to see heat maps that show precisely how users interact with your site can be game-changing for identifying which content is working well and which needs to be retired, refreshed, or personalised.”

Mats Persson, Umbraco CEO, said the new add-on lets Umbraco’s partners and end-clients “meet the growing demand for tailored digital experiences.” Persson continued, saying, “personalisation and content optimisation, that work in practice, are now essential for driving conversion rates and ROI,” something a recent study by McKinsey & Company discovered.

The benefits of personalisation

According to the research, 76% of consumers are more inclined to buy from brands that offer personalised interactions, and 78% are more likely to recommend these brands to others. This highlights the powerful impact of personalisation on consumer behaviour and business performance.

According to the study, personalisation can have a significant impact on cost efficiency and revenue growth, helping companies lower their customer acquisition costs by up to 50% and increasing revenue by 5% to 15%. Personalisation can also boost ROI by 10% to 30%, enhancing overall profitability.

In addition, the same study indicates success for digitally-native direct-to-consumer (D2C) brands who focus on first-party data to understand their customers. By personalising interactions, the study found around 25% of their revenue was generated from such efforts.

uMarketingSuite acquisition

The release of Ubraco Engage to general availability follows the company’s acquisition of uMarketingSuite, a software package to designed to meet customer requirements for content personalisation, in August 2024. Popular in healthcare, financial services, and public sectors, uMarketingSuite has been a valuable tool where privacy regulations limit the use of third-party data. The release of Umbraco Engage further benefits organisations already using the existing UMarketingSuite, with support from a larger team at Umbraco.

Umbraco Engage has been designed to help businesses produce dynamic digital content based on real-time interactions. Leon de Wildt, the founder and solution architect of uMarketingSuite, and Umbraco Engage Commercial Product Manager, highlighted how Umbraco Engage can “help organisations tailor digital experiences in response to their own interaction data.”

Designed to integrate with other Umbraco add-ons like Umbraco Forms and Umbraco Commerce, Umbraco Engage enables digital marketers to access order histories for each visitor profile. The integration means e-commerce sites can deliver personalised shopping experiences to increase sales and encourage conversions.

As the name suggests, Engage promises to help brands not only attract but actively involve customers through a personalised shopping journey, keeping them engaged and ready to convert.

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The growing phenomenon of chatbot review bias is undermining the reliability of online shopping platforms, according to groundbreaking research from European business schools. The systematic distortion in customer feedback could have far-reaching implications for e-commerce trust and transparency.

The comprehensive study on chatbot review bias, published in the Journal of the Academy of Marketing Science, reveals that when consumers interact with chatbots to leave reviews – particularly those with human-like characteristics – they consistently provide higher ratings while writing shorter, less helpful reviews compared to traditional form-based feedback methods.

“Online reviews are critical for consumers to make good purchase decisions. For this to happen, online reviews must be helpful, and ratings must accurately reflect product quality,” explained Dr Dimitrios Tsekouras, Senior Lecturer at Rotterdam School of Management. “But if ratings are better than they should be, and not very detailed, this can mislead consumers and harm the reputation of online selling platforms.”

The research team conducted multiple experiments, including field tests, to understand how chatbot review bias manifests in real-world scenarios. Their findings identified two fundamental mechanisms driving bias: interaction enjoyment with moderately human-like chatbots and social presence with highly human-like chatbots. Both factors contributed to inflated ratings, with reviews collected through chatbots showing consistently higher scores than those collected through conventional methods.

Perhaps most concerning is the impact on review quality. Dr Tsekouras and his colleagues found that chatbot-collected reviews were significantly shorter and less detailed, making them less valuable for potential buyers seeking authentic product information. This aspect of chatbot review bias poses a particular challenge for platforms like Amazon, where detailed customer feedback plays a crucial role in purchase decisions.

The implications of systematic bias extend beyond just numbers. Dr Dominik Gutt, one of the study’s co-authors, points out, “Low-quality sellers could abuse chatbots to boost their ratings and disguise the low quality of their products.” The potential for manipulation raises severe concerns about the transparency and reliability of online review systems.

The researchers suggest that platforms and policymakers consider whether chatbots should be permitted to collect online reviews. Their findings indicate that the current trend toward automated review collection might be undermining the very purpose of customer feedback systems.

Key findings from the study include:

• Chatbot review bias consistently resulted in higher product ratings,
• The more human-like the chatbot, the higher the rating inflation,
• Chatbot-collected reviews were shorter and contained less detailed information,
• The bias was particularly pronounced for lower-quality products.

“If ratings are better than they should be and not very detailed, this can mislead consumers and harm the reputation of online selling platforms,” warned Dr Tsekouras.

As online retail grows, addressing chatbot review bias presents a crucial challenge for the industry. While chatbots offer efficiency and cost savings in customer service, their impact on review integrity suggests that businesses might need to reconsider their implementation in feedback collection processes.

The study recommends that e-commerce platforms and retailers carefully weigh the benefits of automated review collection against the potential costs of review quality and accuracy. Dr. Irina Heimbach from WHU – Otto Beisheim School of Management – suggests that the research should inform policymakers designing feedback mechanisms.

For consumers, the message is clear: be aware that reviews collected through chatbots might not tell the whole story. Be wary of mostly-short and mostly-positive reviews – they may be subject to the bias the researchers unearthed. As AI continues to reshape online retail, understanding and mitigating chatbot review bias becomes increasingly crucial for maintaining the web of trust that’s essential for e-commerce ecosystems to prosper.

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The European Commission has launched a formal investigation into the popular Chinese e-commerce platform Temu, marking one of the first significant enforcement actions in the EU under the Digital Services Act (DSA). The probe, announced on October 31, 2024, centres on concerns ranging from selling illegal products to potentially manipulative platform design features that could harm consumers.

Temu’s meteoric rise in the European market since its launch in April 2023 has caught regulators’ attention. The platform, which was designated as a Very Large Online Platform (VLOP) on May 31, 2024, reported a staggering 92 million monthly users as of September 2024—more than double the 45 million threshold required for VLOP status. The rapid expansion has brought increased responsibility under the DSA’s stringent regulations.

Key areas of investigation

The Commission’s investigation will focus on four primary concerns:

1. Product compliance and seller verification

The investigation focuses on Temu’s system for preventing the sale of non-compliant products in the EU. Regulators are concerned about the platform’s ability to prevent suspended rogue traders from returning to the marketplace and stop the reappearance of previously identified non-compliant goods.

2. Addictive design features

The Commission will scrutinise Temu’s game-like reward programs and other potentially addictive design elements. There are concerns that these features could negatively impact users’ physical and mental well-being, raising questions about the platform’s responsibility for protecting consumer interests.

3. Recommendation systems

The EU investigation will examine how Temu recommends content and products to its users. Under the DSA, platforms must be transparent about their recommendation algorithms and provide users with at least one easily-accessible option that isn’t based on personal profiling.

4. Research data access

The Commission is also investigating whether Temu has met its obligations to provide researchers access to publicly-available platform data, an essential requirement for transparency under the DSA.

Regulatory framework and potential consequences

If the Commission’s suspicions are confirmed, Temu could face significant consequences for violating Articles 27, 34, 35, 38, and 40 of the DSA. Executive Vice-President for Europe Fit for the Digital Age, Margrethe Vestager, emphasised the importance of compliance, stating, “We want to ensure that Temu is complying with the Digital Services Act. Particularly in ensuring that products sold on their platform meet EU standards and do not harm consumers. Our enforcement will guarantee a level playing field and that every platform, including Temu, fully respects the laws that keep our European market safe and fair for all.”

The road ahead for Temu in the EU

The Commission’s investigation follows preliminary analyses of Temu’s risk assessment report, dated September 2024, and responses to formal information requests made in June and October 2024. While the investigation has no set deadline, the Commission has indicated it will be treated as a priority.

The probe doesn’t automatically indicate guilt, and Temu will have the opportunity to address the concerns through committing to remedy issues. The investigation will involve gathering additional evidence through information requests, monitoring actions, and interviews.

Th investigation represents a significant test of the DSA’s enforcement capabilities and could set important precedents for other online marketplaces operating in the EU. It’s worth noting that the Commission’s action doesn’t preclude separate enforcement measures by national consumer protection authorities or market surveillance bodies, particularly under the upcoming General Product Safety Regulation, which takes effect on December 13, 2024.

The case against Temu demonstrates the EU’s commitment to enforcing its digital regulations and ensuring that rapid business growth doesn’t come at the expense of consumer safety and any platform’s responsibilities to its customers. As the investigation unfolds, it will likely serve as a benchmark for how the DSA can be used to regulate large online platforms and protect European consumers in the digital marketplace sector.

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In the bustling landscape of logistics in Southeast Asia, Teleport is a potential game-changer, striving as it is to achieve 24-hour or next-day delivery at a lower cost. As the logistical arm of Capital A Bhd, Teleport wants to challenge the status quo of the industry.

But amid the region’s rapid economic expansion and escalating consumer demands, the critical question looms: can Teleport truly revolutionize the delivery landscape of Southeast Asia? 

Teleport’s growth has been impressive. The company has rapidly expanded its presence across key markets in Southeast Asia, including Malaysia, Thailand, Indonesia, Philippines, India, Singapore, and China. This strategic expansion has allowed Teleport to tap into the region’s burgeoning e-commerce market, catering to the growing demand for seamless and efficient delivery services.

In a recent interview with Tech Wire Asia, Pete Chareonwongsak, the CEO of Teleport, shared insights into how the company is employing innovation to tackle future challenges in Southeast Asia.

How do you view the logistics industry in Southeast Asia amid rising demand for faster, cheaper deliveries?

I think we do not have enough homegrown Southeast Asian logistics companies. When someone says Southeast Asia logistics, the names that typically come to mind are J&T and Ninja Van. The former initially started in Indonesia and is funded by the Chinese, so it’sexpanded to where 90% of its business now comes from China, not Southeast Asia. So it’s never really been born and bred here.

The same is true with Ninja Van, which started in Singapore and expanded to all the Southeast Asian countries. That’s the closest, but it’s funded by global venture capital.

That is why I’ve always felt we, Teleport, have an opportunity as we were born and raised here in Southeast Asia. Our DNA, infrastructure, and everything in between is here; we will not leave this part of the world. 

So my understanding of Southeast Asia logistics is that many great companies come and go: their focus starts here but eventually moves elsewhere. Our mission has been to connect Southeast Asia better than anyone else, especially in performing next-day delivery.

Has Teleport proven its viability in its current market, or does it still have much to prove to establish a more substantial presence?

There’s a lot more. Based on statistics, we could reach about five million SMEs of a specific size in the region and give them access to our services. Everyone always talks about the SME opportunities in Southeast Asia, only to eventually realize that the money’s not there. But the opportunity is there. If you’re here long term, then at some point, you have to do something that allows collaborations to happen. 

So, there are still opportunities in the long term. We currently serve at most 10,000 clients, but five million SMES are within the region. That means we have a long way to go in making it accessible.

Why do logistics companies frequently expand beyond Southeast Asia? What do they look for elsewhere that they need help finding here, especially given the region’s abundance of SMEs and MSMEs?

What is missing is the total addressable market. That’s why they go elsewhere because, undeniably, there are many larger markets that exist elsewhere today. So, at some point, when they’re funded a certain way or aim to grow a certain way, they need to go and find a large market to justify their reach and growth. That makes it hard for Southeast Asia-focused companies to stay here. There’s always something else, somewhere else. 

We have an understanding of the region that some other companies lack, and our dedication and focus is here, today and tomorrow. So that’s what we see that they don’t see, perhaps making sense of their move to look elsewhere for markets. But if no one builds like we are doing, connecting Southeast Asia in a cheaper, faster, and better way, then SMEs will never have a real opportunity to grow. 

Many of the Southeast Asian brands, e-commerce, and even supply chain operators never really have something that changes their capacity to grow. They have to flow with the market,  still to this day. So we’ve got to find some angle to serve them, and that’s really where Teleport’s focus is.

Which is Teleport’s biggest addressable market at the moment?

It is China into Southeast Asia. The region is the triangle between Kuala Lumpur, Singapore, and Bangkok. The cross-border opportunities between these three countries, in particular, are mature.

Next-day delivery at a significantly reduced cost is a bold proposition. How is Teleport working towards this goal?

If you look at the top three reasons why somebody would be willing to use Teleport, the first is price, the second is reliability, and the third is speed. You have to hit all three, and that is very hard. But that’s what we’re trying to do. How do we bring the actual cost down? Then, once we’ve brought the cost down, how do we make money? People need to understand what it costs us to enable next-day deliveries.

Our view on life now is pretty simple: how do we get the cost down? And the way to do that is to not start the business model by buying a lot of stuff. So our first question was how do we build the business model we want without owning anything initially? The most important thing about next-day delivery is sending things between two borders. How do we do that in a next-day fashion? It’s got to go on a plane. 

So, how do we put stuff on a plane? There are only two ways. One is you buy some aircraft, and FedEx, DHL, and UPS have bought hundreds of planes. So they’ve signed up for that visibility, and if we want to do that, we would have to compete against them over time with a better cost solution. 

But what are other ways to put stuff on planes? Well, you and I fly everywhere, and every time a plane flies, a little bit of space is left over. That’s called the belly. How do we get access to that space across Southeast Asia? We need partnerships, and that’s where AirAsia came in. That’s how we built the business, off AirAsia’s belly. We wouldn’t be here without it, because it gave us the most extensive Southeast Asian network.

With those spaces overnight, we then had to figure out how to build a business model on that space, which is very cost-effective. Because passengers have paid for the seats and baggage allowances, we need to figure out how to bolt that little bit of space onto the rest of the business model, which is end-to-end delivery. Essentially, that was how we built the business. So it becomes much easier when you don’t own the thing. 

The second thing is figuring out how to partner so you can gain access to the asset you need. The third is then how you tie it all together and do it.

Does Teleport have specific growth goals for its portfolio regarding the number of businesses?

We set a 24-month goal. Around two million e-commerce parcels a day are coming into Southeast Asia, and we want to capture most of that. For perspective, two million a day would be on par with our esteemed competitors. The amount is undoubtedly huge on a global scale, but we are looking towards that direction.

What role can technology play in facilitating the transformation of the logistics industry to meet the demands of faster and more affordable deliveries?

My view on addressing that this year is to slow down the growth slightly, which is shocking to most people. But if we don’t build these foundations with the right technologies, we won’t reach the two-year goal of two million deliveries, for example. So this is the year where we figure out the value of Gen AI or any AI solutions to our operations.

How many airplanes are in the fleet you use?

Airasia has 204 passenger aircraft, which will all be fully re-activated by the end of the first quarter. Teleport owns three freighter planes in Malaysia. On top of that, we have 30 airline partners based in Asia and Southeast Asia.

What changes do you anticipate in the competitive landscape if Teleport achieves its vision, and what adjustments might other logistics companies need to make in response?

A couple of things. Firstly, in this region, there are a lot of low-cost carriers that would eventually think about how to continue to improve their business. Like how Teleport built the company off AirAsia’s back, many other low-cost carriers will do the same – spin off a logistic business from their airline operations.

Even in China and Latin America, people have started to spin off their logistics business. So, the multimodal angle is going to be an essential trend.

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Smaller businesses must find some way to sustain their profitability or face market exclusion and eventual closure. One such lifeline is the presence of Chinese suppliers which offer access to a wide array of products at competitive prices. In February, the country reported that its manufacturing activity had expanded at the fastest pace in more than a decade.

The allure of these suppliers lies primarily in their ability to offer cost-effective manufacturing solutions without compromising quality. Small businesses can expand their product ranges, maintain margins, and acquire unique items that set them apart from mainstream marketplaces. Business owners can access these suppliers through online B2B marketplaces, like 1688, or may choose to travel in person to trade fairs in China, like the Canton Trade Fair. At the fair, an array of China-produced products are showcased by their manufacturers, many of which could spur business growth. Approximately 200,000 foreigners attended the November 2023 event in person, and the online platform was attended by 6.6 million overseas visitors.

1688, an Alibaba Group business, serves as a B2B platform connecting international manufacturers and wholesalers with wholesale buyers in China. Specialising in diverse industries like apparel, electronics, and home furnishings, it facilitates sourcing and online transactions, providing businesses with access to a broad range of products for bulk purchasing.

“We decided to start sourcing from 1688 as we found there was a huge range of factories from China on this platform that can really enable savings from their competitive costs, without making any compromises on quality,” said Mark Brookfield from Sunrise Accessories. “We could select products that are in the range of goods that we usually buy to wholesale in Australia.”

The challenges of switching suppliers

Travelling to China to source new suppliers can be expensive for Australian and New Zealand businesses, especially when it comes to attending trade fairs of global interest that last weeks. It involves the costs of travel, accommodation, and time spent away from managing the day-to-day operations of their business. The language barrier can hinder face-to-face negotiations, while cultural differences and differing business practices might complicate agreements and contracts. Even conducting business purely online can be subject to the same problems.

After a deal is struck, things may not necessarily be smooth sailing. Vetting suppliers for quality, reliability, and ethical standards to ensure compliance with bodies like the Australian Competition and Consumer Commission (ACCC) is crucial but also challenging from a distance. Coordinating logistics, ensuring quality control, and managing shipping and customs processes add layers of difficulty, too.

Reliance on foreign suppliers, particularly those in China, introduces risks related to geopolitical tensions, trade regulations, and unexpected disruptions such as those seen during global crises or natural disasters. For example, in August 2022, a heatwave in the country led global manufacturers like Volkswagen and Foxconn to suspend their operations to save power after a spike in demand for air conditioning put pressure on the local grid. Issues like intellectual property protection and maintaining ethical manufacturing practices also pose challenges when dealing with suppliers from different countries.

Despite the risks, Australia and China continue to have a strong relationship, with a study by the University of Melbourne finding that 58 per cent of Australian companies still identify China as a top three priority for global investment. Indeed, in November 2023, Prime Minister Anthony Albanese visited China and said that “significant progress” was made in relations after talks with President Xi Jinping. China is also planning to remove tariffs on a number of Australian products to help improve the relationship between the countries.

Easing the transition with WorldFirst

While the source of some challenges may be out of a business’s hands, steps can be taken to ease the transition to Chinese suppliers. Choosing to do business remotely and hiring local sourcing agents can reduce travel costs and marginalise unreliable suppliers. Human translators are also vastly more valuable than online tools for communication, and the risk of unexpected supply chain disruptions can be mitigated by diversifying product lines, conducting thorough risk assessments, and keeping abreast of geopolitical developments.

But an integral part of success is the smoothing over of international payment processes to ensure that business owners deal with invoices efficiently and suppliers are paid quickly. Paying manufacturers in their local currency eases the financial burden of currency conversion fees and FX fluctuations, improves supplier relations and trust, and enhances operational efficiency – ultimately giving businesses more scope to tackle other challenges they cannot prepare for.

Leading global fintech company WorldFirst connects businesses around the world with fast and affordable payments, and offers an easy way to achieve smoother commerce with its World Account, explicitly designed for cross-border businesses trading in multiple currencies. With their World Account you have access to local sort codes, account numbers, and IBANs, working to reassure partners, minimise conversion charges, and reduce fees associated with cross-border trade. They also aid businesses in currency risk management by offering tailored hedging solutions, enabling e-commerce businesses to protect themselves from currency volatility and maintain stable pricing during economic uncertainty.

WorldFirst is currently the only provider in the market to connect to the cross-border payment solution for 1688. This purpose-built link to 1688’s network of ten million suppliers in 1,700 categories provides businesses with direct access to a wide array of products at competitive wholesale prices.

The integration also supports global selling on major marketplaces like Amazon, Wish, AliExpress, Lazada, and Shopee and facilitates direct deliveries to warehouses in China or international shipments managed by logistics partners. Online sellers can pay suppliers and collect from various marketplaces all within a single account, making reconciliation and preparation of tax returns much simpler. Furthermore, once the World Account is synched to Xero or NetSuite, businesses benefit from streamlined financial management, saving on time and accountancy fees.

With WorldFirst’s competitive exchange rates and transparent fees at lower rates than local banks, businesses can optimise costs while ensuring swift and reliable payments. There are no transaction size limits or hidden charges, and payments are transferred on the same day and fully comply with international trade regulations.

“WorldFirst has been a great help with this transition as we found most of the smaller factories in China did not have US accounts to pay their invoices,” said Mr Brookfield. “This way we could transfer CNH straight to their Chinese account, which is much easier for us.”

WorldFirst is a global fintech that connects businesses around the world with fast and affordable payments, access to international marketplaces, flexible currency risk management tools, working capital, and a deeper understanding of cross-border payments and global markets. The latter enables its relationship managers to provide insights into payment trends and preferred trading methods in different regions, helping businesses adapt their strategies. The Australia-based team is ready to help with any inquiries or visit the WorldFirst website, or for more information. Discover how you can take advantage of overseas suppliers with WorldFirst today.

The post The rise of Chinese sellers in sustaining small business profitability appeared first on TechWire Asia.

In the global smartphone market, two tech giants, Apple and Samsung Electronics Co., have been locked in a long-standing battle for supremacy. Their flagship devices, the iPhone and Samsung Galaxy series, have become synonymous with innovation and style. But in a significant turn of events and for the first time since 2010, Apple has outperformed its longtime rival, Samsung Co., in global smartphone sales.

The iPhone dethroned the Samsung Galaxy to become the best-selling smartphone series globally, marking a notable shift in the industry’s competitive landscape. According to preliminary data from the International Data Corporation’s (IDC) Worldwide Quarterly Mobile Phone Tracker, the iPhone accounted for a substantial fifth of the global smartphone market, with nearly 235 million shipments in the past year. 

“The last time a company not named Samsung was at the top of the smartphone market was in 2010, and for 2023, it is now Apple. A shifting of power at the top of the largest consumer electronics market was driven by Apple’s all-time high market share and a first time at the top,” IDC’s report reads. In other words, the unprecedented market share demonstrates Apple’s ability to capture a significant portion of consumer demand. It solidifies its position as a frontrunner in the highly competitive smartphone industry.

Apple’s dominance during the holiday quarter has been a recurring theme in recent years. However, its unprecedented lead over Samsung throughout the year indicates that Apple is navigating the challenges of an industrywide slump more effectively than its competitors.

Apple vs Samsung: a decade-defying achievement

While Samsung remains a formidable player in the smartphone market, its shipments experienced a double-digit slump, totaling 226.6 million. “The overall shift in ranking at the top of the market further highlights the intensity of competition within the smartphone market,” said Ryan Reith, group VP with IDC’s Worldwide Mobility and Consumer Device Trackers. 

Reith believes Apple played a part in Samsung’s drop in rank, but that the overall Android space is diversifying. “Huawei is back and making inroads quickly within China. Brands like OnePlus, Honor, Google, and others are launching very competitive devices in the lower price range of the high-end foldable, and increased discussions around AI capabilities on the smartphone are gaining traction. Overall, the smartphone space is headed towards an exciting time,” he added.

Apple’s surpassing Samsung in global smartphone sales signifies a crucial moment in industry rivalry. It highlights the enduring popularity of the iPhone series and Apple’s ability to connect with a diverse global audience. Consumers can expect more innovations and intense competition between these tech giants as the smartphone landscape evolves.

Global smartphone sales

Overall, IDC said the global smartphone market remains challenged, but momentum is moving quickly toward recovery. According to initial findings, 2023 witnessed a 3.2% decline in global smartphone shipments, reaching 1.17 billion units. It is also the lowest full-year volume in a decade, primarily driven by macroeconomic challenges and elevated inventory early in the year,

The latter half of the year brought a surge, solidifying expectations for a robust recovery in 2024. IDC noted that the fourth quarter saw 8.5% year-over-year growth and 326.1 million shipments, higher than the forecast of 7.3% growth. “While we saw some strong growth from low-end Android players like Transsion and Xiaomi in the second half of 2023, stemming from rapid growth in emerging markets, the biggest winner is clearly Apple,” said Nabila Popal, research director with IDC’s Worldwide Tracker team. 

“Not only is Apple the only player in the Top 3 to show positive growth annually, but it also bags the number 1 spot annually for the first time. All this despite facing increased regulatory challenges and renewed competition from Huawei in China, its largest market. Apple’s ongoing success and resilience is largely due to the increasing trend of premium devices, which now represent over 20% of the market, fueled by aggressive trade-in offers and interest-free financing plans.”

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In a sudden twist of events roughly two months ago, TikTok, the widely embraced social media platform from China’s ByteDance, temporarily suspended its e-commerce services in Indonesia. The decision was prompted by regulatory mandates instituted by the Indonesian government to protect local merchants’ interests.

Fast forward to this week, and TikTok has orchestrated a remarkable strategy in the archipelago, unveiling plans to invest over US$1.5 billion and secure a 75% stake in Tokopedia, the nation’s largest e-commerce platform. 

TikTok’s decision to temporarily shut down its e-commerce services in Indonesia reflects the complex interplay between regulatory compliance, market dynamics, and strategic investments. But the social media giant did say it would recalibrate its approach to navigate the evolving regulatory landscape.

That said, the strategic move to collaborate with Tokopedia underscores TikTok’s commitment to the Indonesian market. It allows the company to continue its ‘Shop’ operations, showcasing the platform’s resilience in navigating regulatory challenges.

The Indonesian government mandated TikTok to halt its e-commerce services temporarily in October this year; the move was solely to ensure a level playing field for local merchants and protect their interests within the fiercely competitive e-commerce sector.

For TikTok, it was a detrimental move, especially for TikTok Shop, considering Southeast Asia is the app’s biggest market in terms of users, and Indonesia, the region’s biggest economy and most populous nation, is the most significant market for the platform. 

In fact, Indonesia was so critical to TikTok’s plans that it was the first nation to pilot the app’s e-commerce arm, TikTok Shop. The country of 278 million people was supposed to be a template for a global expansion from the US to Europe. When talks on the new ruling were making waves, TikTok argued that separating social media and e-commerce would hamper innovation and hurt millions of merchants and consumers. 

According to the country’s Director General of Public Information and Communications of the Ministry of Communications and Informatics, Usman Kansong, Tiktok Indonesia has two permits from his ministry. “There are two permits: social media and e-commerce. But with Minister of Trade Regulation No. 31 of 2023, Tiktok must separate social media from e-commerce,” he added.

TikTok has a new strategy in Indonesia

When the ByteDance-owned TikTok unveiled its strategic move on Monday, it said the plan was to invest US$1.5 billion in a unit of Indonesia’s GoTo, aiming to salvage its shopping business following regulatory challenges in the country. In a letter to investors, GoTo said TikTok will secure a controlling 75.01% stake in Tokopedia, an e-commerce unit within the GoTo umbrella. 

As a part of this transaction, Tokopedia is set to acquire TikTok Shop’s Indonesia business for US$340 million, expanding its footprint in the dynamic Indonesian e-commerce landscape. “As part of the agreement, Tokopedia and TikTok Shop Indonesia’s businesses will be combined under the existing PT Tokopedia entity in which TikTok will take a controlling stake. The shopping features within the TikTok app in Indonesia will be operated and maintained by the enlarged entity,” GoTo’s statement reads.

The arrangement will allow TikTok and GoTo to serve Indonesian consumers and MSMEs comprehensively. “GoTo will benefit from the growth of the enlarged entity and will remain an ecosystem partner to Tokopedia through its digital financial services via GoTo Financial and on-demand services via Gojek. GoTo will also receive an ongoing revenue stream from Tokopedia commensurate with its scale and growth,” GoTo noted.

What will unfold next?

According to both companies, the strategic partnership will kick off with an initial pilot period conducted in close collaboration with and under the supervision of relevant regulators. The Beli Lokal initiative’s inaugural campaign is scheduled to launch on December 12, aligning with Indonesia’s National Online Shopping Day (Harbolnas) — a government initiative to foster the country’s digital economy by bolstering local MSMEs. 

“This campaign, accessible on both TikTok and Tokopedia, will spotlight a diverse array of merchants, placing a significant emphasis on Indonesian products. Going forward, TikTok, Tokopedia, and GoTo will transform Indonesia’s e-commerce sector, creating millions of new job opportunities over the next five years,” GoTo added. The transaction is expected to close in the first quarter of 2024.

The coming months will unveil how TikTok’s bold moves will shape the narrative of e-commerce partnerships and regulatory compliance in this dynamic market.

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Chinese fast fashion giant Shein has had quite the jounrey, from China to its current headquarters in Singapore, and in its latest evolution, aiming to file a US IPPO.

Founded by Chinese entrepreneur Chris Xu, within a decade of its inception, the company achieved a valuation of US$100 billion during an April 2022 fundraising round – a value higher than Zara’s owner Inditex and H&M combined. By 2022, Shein was the world’s third most valuable startup.

Fast forward to this week, when the fast fashion giant confidentially filed to go public in the US, one of its largest markets.

In May this year, the company experienced a valuation dip to slightly over US$60 billion, but if it goes ahead with its initial public offering (IPO), Shein is still on course to emerge as the most valuable China-founded company to go public in the US. So far, only Didi Global, the Uber of China, has come close, delivering one of the year’s biggest IPOs in 2021, at a US$68 billion valuation.

Still, the move to discreetly file for an IPO in the market from which it receives the most scrutiny is being seen as an audacious move by Shein. Around the world, the company has faced scrutiny for issues including reported subpar working conditions in factories, alleged copyright infringement concerning independent artists’ designs, and criticism of the environmental impact associated with fast fashion. Shein, however, has consistently refuted these accusations.

In the US specifically, Shein is under constant, ongoing scrutiny – no matter what it does to stay on the good side of US lawmakers. Most recently, Shein and its rival Temu were accused of “building empires” by a US House committee in a report on firms exploiting legislative loopholes to evade US import taxes and sanctions checks.

Other concerns raised by critics center around the possibility that Shein might engage contract manufacturers located in China’s Xinjiang region, where advocates and governments have made allegations of the internment of Uighurs and other predominantly Muslim minority groups. Beijing, however, denies any such abuses.

Shein and its lobbying effort for its US IPO

Persuading regulators about the integrity of its supply chain is expected to be a significant regulatory hurdle for Shein as it seeks approval from the US Securities and Exchange Commission (SEC) for its IPO. Earlier this year, a bipartisan effort led by a congresswoman urged the SEC to postpone Shein’s IPO until the company’s supply chain could be verified free from forced labor. 

Additionally, a coalition of Republican attorneys general from 16 US states has called for an SEC audit of Shein. The company has faced scrutiny from two separate Congressional committees for its sourcing practices and utilization of a trade loophole that lets most of its products into the US duty-free.

In its latest social impact report, Shein emphasized its collaboration with Oritain, a firm employed by the US government to examine cotton connections to China’s Xinjiang region. As previously disclosed to Reuters, Shein conducts tests on samples from every third-party cotton mill with which it collaborates. Between June 1, 2022, and July 11, 2023, the company conducted 2,111 tests.

Nevertheless, critics argue that the testing procedures fail to adequately scrutinize the millions of garments Shein exports worldwide each year. A separate Reuters report noted that Shein allocated US$1.28 million for Capitol Hill lobbying this year in anticipation of its public debut. The company also engaged in private meetings with lawmakers, including prominent critics, aiming to reshape its image in Washington, as per insights from Congressional aides.

In addressing concerns about its supply chain, Shein representatives underscored the company’s commitment to diversifying its sourcing from China to include other nations, notably India. They also highlighted the company’s efforts to increase the number of Chinese goods coming to the US via conventional container shipping, acknowledging the payment of tariffs on these items.

“Shein is fundamentally a Chinese company; investors should approach Chinese offerings with extreme caution. Its attempt to go public should prompt a closer look at its business practices, especially its links to slave labor and its evasion of US customs laws,” Republican Sen. Marco Rubio told Reuters. “I will closely monitor Shein’s disclosures in the lead-up to its IPO,” added Rubio, who criticized the retailer’s lobbying efforts in a letter distributed to other senators in June.

The Wall Street Journal, the first to break the news on Shein’s IPO, said that Goldman Sachs, JPMorgan Chase, and Morgan Stanley have been hired as lead underwriters on the offering, which could happen in 2024.

How will Beijing treat Shein’s US IPO?

Since a broad crackdown on overseas listings, fewer Chinese IPOs have been in the US. As part of Shein’s ongoing efforts to prepare for its inaugural share sale in the US, the company strategically positions itself as a global entity despite its Chinese origins. It started in 2022 when Shein relocated its headquarters to Singapore and initiated the expansion of manufacturing facilities beyond its Chinese base. 

The e-commerce giant eventually established distribution centers in the US, Canada, and Europe to enhance shipping efficiency in these regions. Notably, the company acquired the British online brand Missguided in October and secured a stake in the fashion retailer Forever 21 owner in August.

There remains the possibility that Chinese regulators will subject Shein’s listing to scrutiny and mandate the company to seek approval. After all, Chinese securities regulations necessitate companies to register for the sale of shares abroad, subjecting them to screening for state security and other potential concerns. Such regulatory processes could introduce further delays to Shein’s IPO proceedings.

The post Did Shein finally make the bold move and file for a US IPO? appeared first on TechWire Asia.

Over the past decade, Chinese consumers have gained a reputation for their unwavering passion for electronic gadgets, with mobile phones becoming an indispensable part of daily life. Apple, recognized for its performance and premium pricing, has enjoyed notable success in the Chinese market, particularly with the iPhone. It has seamlessly transformed a smartphone into a status symbol within the country’s social circles. However, a significant shift is underway as formidable domestic players Huawei and Xiaomi are rising to prominence. 

Armed with innovative features, competitive pricing, and diverse product offerings, these companies are reshaping the dynamics of the Chinese smartphone market and challenging Apple’s long-standing dominance. Smartphone sales in China surged by 11% compared to the previous year in the opening four weeks of October, giving a noteworthy indication of the market’s rebound from an eight-month decline. Even more notable though is the fact that leading domestic brands outpaced Apple in terms of growth during the period.

According to a report published by Counterpoint Research, Xiaomi, Honor, and Huawei Technologies were the main forces behind the growth in the Chinese smartphone market. Huawei saw sales rise 90% year-on-year (YoY) during the period. The increase in overall demand indicated that China’s smartphone market is close to exiting an extended slum.

Apple has been under pressure to meet demand for its new devices, all while Huawei and Xiaomi released their latest flagship smartphones. “The clear stand-out in October has been Huawei, with its turnaround on the back of its Mate 60 series devices,” Counterpoint China analyst Archie Zhang said in the report, referencing the Shenzhen-based company’s latest handsets launched in late August, including the Mate 60 Pro. 

Despite US sanctions intended to stifle access to such technology, that device is equipped with an advanced made-in-China 5G chip. On the other hand, Xiaomi’s latest flagship, the Xiaomi 14, released on October 26, experienced a 33% sales surge in China within four weeks. The company achieved over one million unit sales in under two weeks, as Xiaomi founder and CEO Lei Jun reported on Weibo. 

Despite receiving less media coverage than Huawei’s Mate 60 Pro, the Xiaomi 14 is notable for being the world’s first device powered by Qualcomm’s Snapdragon 8 Gen 3 chipset and running Xiaomi’s new Android-based operating system, HyperOS.

Apple vs. Huawei vs Xiaomi: who did it better for Singles’ Day?

During this year’s two-week Singles’ Day sales event, smartphone unit sales in China grew by 5% YoY, indicating a positive fourth quarter, according to Counterpoint’s report. “This is a good start to the rest of the quarter,” says Mengmeng Zhang, senior analyst for China. “Huawei is continuing its strong run along with Xiaomi, which is enjoying a further spike in sales with the launch of its new 14 series devices.”

Apple appears to be struggling from hiccups regarding supply, Ivan Lam, senior analyst for manufacturing at Counterpoint, added. He added that Apple is improving compared to last year. “Considering last November’s supply snafu was an anomaly, the YoY numbers could move into positive territory as current supply tightness normalizes,” he concluded.

In total, the number of Apple smartphones sold declined 4% YoY during the two-week sales from October 30 to November 12, the research consultancy said last Thursday. In comparison, the number of units sold by Huawei and Xiaomi grew 66% and 28% YoY, respectively, over the same period.

A Reuters report indicated that the price for Apple’s latest iPhone 15 model starts at 5,999 yuan (US$832), while Huawei’s Mate 60 smartphones start from 5,499 yuan (US$763). Xiaomi’s latest Mi 14 smartphone is priced at 3,999 yuan (US$555). E-commerce giants like Alibaba and JD.com refrained from disclosing Singles’ Day sales figures this year, continuing a practice adopted last year.

JD.com did share that the transaction volume for Apple products on its platform exceeded 10 billion yuan (US$1.39 billion). Meanwhile, Xiaomi reported a cumulative gross merchandise value of more than 22.4 billion yuan for the shopping event.

Apple is navigating a fiercely competitive landscape in China’s smartphone market, especially since the launch of the iPhone 15 collection.

Traditionally a dominant player, the tech giant is now contending with challenges posed by formidable domestic rivals, reshaping the dynamics of the world’s largest smartphone market.

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