Appeals don’t help
The initiative of the six governments escalates a conflict that has become increasingly heated in recent months. The EU has already twice demanded that platform operators provide precise data on their suppliers and forward it to the EU customs authorities, though without much success. The e-tailers are also required to ensure that their products comply with European consumer protection regulations. The legal basis for this step is the Digital Service Act. EU Regulation 2022/2065. It states: “[…] an infringement (of the Regulation) occurs if an online platform fails to display clearly the identity of the trader, as required by this Regulation, where an online platform withholds the identity or contact details of the trader until after the conclusion of the contract concluded between the trader and the consumer, or where an online platform markets the product or service in its own name rather than in the name of the trader who will supply that product or service.”
45 million EU customers – per month
If the e-commerce platforms do not comply, Brussels has announced severe penalties based on the Digital Service Act.
But even if Shein, Temu, and AliExpress do adhere to the legal requirements, this will hardly change the mass import of cheap Chinese toys, bracelets, apparel items or accessories. Currently, every single working day, 5,000 tons of e-commerce shipments are flown to Europe from Hong Kong’s airport Chek Lap Kok alone; most of them stemming from the three e-traders, reports Olaf Oczkos, editor of the trade journal, PalettenReport. If flights from Shanghai, Guangzhou or Zhengzhou are added, the total volume easily doubles. The shipments come directly from production facilities and are loaded onto freighters or into the lower deck compartments of passenger airplanes at Chinese airports, arriving 12 or 15 hours later in Liège, Madrid, Budapest or Frankfurt. The e-commerce segment reports a phenomenal growth rate in most countries, reaching between 6% and 10% p.a. Temu alone receives orders from 45 million European customers every month. Product demand is likely to be similarly high for Shein or AliExpress. In 2023, cross-border e-commerce sales in Europe amounted to 255 billion EUR. According to data available, to date, around 4 billion parcels are expected to be delivered to European shoppers by the end of 2024, 80% of which will come from China.
Many small shipments generate big money
This trend might please consumers, however, it is a nightmare for European customs agencies and EU treasurers. This is because Shein and Co. split up larger shipments, making them small in order to avoid paying customs duties. The upper limit for charges set by the EU Customs Directive stands at 150 EUR per shipment. Hence, most e-commerce items pass the EU borders without any customs dues. Although there are random checks after arrival, due to the huge volume of e-commerce products, the authorities are simply overstretched in terms of personnel and administration to carry out effective supervision. But even this could soon come to an end. The EU is planning to establish a unified European customs authority with far-reaching powers. A central part of the reform package is also the abolition of the 150 EUR duty-free limit. As a result, the products ordered by consumers on e-commerce platforms based outside the block of 27 EU member states, will become more expensive in future.
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Publish date : 2024-11-03 10:51:00
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