(Yicai) June 17 -- With the European Union about to impose import duties on small e-commerce parcels that previously entered the region duty-free and the United States having already done so, Chinese cross-border sellers are embracing artificial intelligence, branding, and local warehousing to maintain margins, speed, and scale, according to industry insiders.

“The cost of exporting low- and mid-priced goods will increase significantly, posing challenges for some small and medium-sized merchants selling labor-intensive products," Yang Yi, head of overseas brand marketing at Alibaba Group's AliExpress, told Yicai at a cross-border e-commerce trade fair yesterday. “The export product mix will change substantially.”

Localization and branding are the main coping strategies, Yang said. AliExpress has overseas warehouses in 27 countries to help vendors move exported goods into local warehousing and strengthen logistics fulfillment.

“In-stock goods are the trend,” noted Liu Gang, initiator of the Zhongshan Lighting Factory Cross-border Spot Goods Alliance, which has brought together more than 40 factories in the industry to supply overseas e-commerce sellers through overseas warehouse inventory, helping export higher-value lighting products.

The alliance has built its own US warehouse and has leased such facilities in Germany, the United Kingdom, and Canada, Liu said. The next issue the industry must address is how overseas warehouses can develop in full compliance with local rules, Liu noted.

“Compliance will be the real test,” Yang pointed out. “We must push Chinese goods overseas as brands, not just as commodities, if they’re to command a premium and absorb the higher tariff costs.” AliExpress plans to help 2,000 Chinese brands double their overseas scale, he added.

The end of de minimis customs duty exemption for small parcels entering the EU on July 1 and the US last year has triggered a chain reaction, with policies in many countries, including Brazil and Vietnam, being tightened, Liu Feina, executive president and secretary-general of the Guangdong E-Business Association, told Yicai. This has forced cross-border e-commerce firms to prioritize compliance as the first step in their overseas expansion, Liu noted.

AI can cut costs and increase efficiency, Yang noted. It is already being used in cross-border e-commerce for product listings, translation, customer service, and customs declarations, significantly reducing operating and labor costs, Yang added.

Some leading cross-border e-commerce firms used to be able to run businesses in only seven or eight countries, but in the future they may be able to serve hundreds of national markets at once using AI, Yang pointed out.

AI can generate images and videos as well, Liu said. Some AI-native stores can even use just one person to do the work of hundreds, making cross-border e-commerce more equitable, Liu noted.

Editor: Martin Kadiev