The rise of cross border e-commerce has been dramatic in 2024, and this will remain a key driver for demand growth in 2025.

The International Trade Administration of US Department of Commerce estimates global B2C and B2B e-commerce to grow 14% annually until 2026, with South Asia and Southeast Asia to experience the fastest growth.

China accounts for more than one third of global e-commerce volume, with growth of 35% in the first 10 months of 2024.

Regulation could hamper growth

Increasing regulatory scrutiny could impact e-commerce growth.

The EU is investigating Chinese e-commerce platform Temu for a potential breach of the Digital Service Act which could result in fines as much as 6% of its global turnover (source: DW).

Indonesia, Southern Asia’s largest economy, has gone further by banning Temu over fears it is hurting local small and medium enterprises (source: CNA).

The US is increasing scrutiny by tightening customs and border checks on vaguely described shipments. It is also proposing new de minimis legislation, which is seen as a loophole allowing large volumes of e-commerce goods from China to enter the US without incurring import duties.

Geopolitical factors

President-elect of the United States, Donald Trump, will return to the White House in January and has vowed higher tariffs on imports from China (and the rest of the world) so e-commerce will inevitably come into sharper focus.

Given the US represents a quarter of China’s cross border e-commerce volumes and occupies more than half of air freight capacity between these nations, any efforts by Trump to put up blockers to this type of trade will have significant implications.

If political intervention dampens growth in e-commerce volumes from China to the US, airlines would need to recalibrate the capacity and demand balance on this fronthaul corridor.

The impact of slower capacity growth on the fronthaul could impact the backhaul trade, with higher freight rates to send shipments from the US to China and nearby regions which transit via China.

Political uncertainties could create opportunities for other sectors. For example, airlines and freight forwarders may find reassurance in those shippers in the traditional air freight market if there are increasing uncertainties around e-commerce regulations.