On June 1, 2026, the first day of AliExpress Overseas 618, in the core European market, Chinese cross-border sellers relied on cross-border direct delivery of small packages for ten years, and for the first time, their order share lost to overseas warehouse delivery.
On the other hand, the European Union will officially cancel the tax exemption for small packages under 150 euros on July 1. Each order will cost an additional 5 to 8 euros. The old method of low-price direct mail has basically been sentenced to death.
On the one hand, the policy is “closing down”, on the other hand, the platform data is “reversing”. This is not a small fluctuation in the industry, but a major change in China-Europe cross-border e-commerce that has not been seen in ten years – the era of making money through low-priced direct mail is completely over, and stocking goods in overseas warehouses has become the only way to survive.
Let’s use the most straightforward vernacular to explain the ins and outs of this matter, its real impact, and the seller’s way out.
Let’s look at the cruel reality first: starting from July 1st, direct mail packages will be completely “unprofitable”.
The EU’s policy, which was unanimously approved in February and is firmly implemented, will be officially implemented on July 1, 2026, with a two-year transition period (2026.7 –
2028.6); the core change is to cancel the tariff exemption for small packages under 150 euros, and all packages must pay tax regardless of the value; the transition period tax is a fixed tariff of 3 euros for each type of goods (multiple categories are superimposed), plus about 19% VAT, and a customs clearance fee of 2 euros will be added from November, and the cost of single direct mail has skyrocketed by 5-8 euros; there will be no tax exemption threshold in the long term (after 2028), and the tax will be fully taxed like large goods.
To give a real example, I used to sell a mobile phone case for 9.9 euros, and only paid VAT for direct mail, and the profit could be 3-4 euros.
After July, the tariff + customs clearance fee alone will be 5 euros, plus VAT, the 9.9 euros of goods will directly become a loss, and there will be no profit margin for low-price direct mail.
What is even more worrying is that the global cross-border small package tax-free bonus is collectively “closing down”. In April 2025, the United States canceled small-amount tax exemptions for Chinese goods. The United Kingdom will abolish tax exemptions below 135 pounds in 2029. Japan and Brazil are also following suit. The road to direct mail is getting narrower and narrower.
The industry has undergone a major reversal: AliExpress’s European warehouse sales exceeded 50% for the first time, and Cainiao’s warehouse exploded.
On June 1, 2026, the first day of AliExpress’ overseas 618, in core markets such as Spain, France, and Poland, the proportion of orders shipped from European local warehouses exceeded 50% for the first time, exceeding cross-border direct orders.
This is a historic moment. In the past ten years, platforms such as AliExpress, SHEIN, and Temu have seized the European market by relying on “China direct shipping + low-price duty-free”. Now Warehouse has overtaken it, which shows that both platforms and sellers are frantically turning to overseas warehouses.
Looking at Cainiao’s data, in the first three months of 2026, the outbound volume of Cainiao’s European overseas warehouses soared 32% year-on-year. The French warehouse capacity utilization rate is close to saturation, and warehouses in Poland and Spain are also accelerating expansion.
Overseas warehouses are suddenly popular because compared with direct mail, it saves money, is more stable, and has a higher conversion rate: the cost is more stable, although there is no additional tax and customs clearance fee for direct mail, and the long-term cost is lower; the timeliness is faster, local warehouse delivery takes 3-5 days, direct mail takes 15-30 days, returns are also convenient, and buyers are more willing to buy; if there is traffic tilt, AliExpress will mark “Local” for orders shipped from warehouses
+” tag, the search is weighted, the official warehouse orders are 25 times the daily; it is compliant and safe, prepare goods in advance for customs clearance, no need to worry about being detained or fined midway, the risk is much smaller.
Now the “four overseas little dragons” are all spending money to expand their European warehouses.
The seller’s real dilemma: If you don’t open an overseas warehouse, you will die. If you do, you will be afraid of having your capital chain broken.
Due to policy pressure and platform tilt, overseas warehouses seem to be the only way out, but countless small and medium-sized sellers are stuck in the middle and are in a dilemma.
Mike, a seller in Shenzhen, specializes in 3C accessories under 20 euros. He has made money through direct mail for three years. After the New Deal, each item cost 7 euros more, and the original 5 euro profit was directly transferred to him.
“If you don’t do overseas warehouses, you will have no orders after July; if you do overseas warehouses, you have to spend a lot of money to prepare goods. If you can’t sell them, the inventory will be lost, and the capital chain will be cut off.” This is a true portrayal of 80% of small and medium-sized cross-border sellers.
Some sellers complained that the threshold for overseas warehouses has been raised, and small sellers simply cannot handle it.
But the reality is that the conversion rate of warehouse-delivered goods is 40% higher than that of direct mail, and the return rate is 25% lower. Buyers are increasingly accustomed to the fast delivery of local goods, and no one buys direct mail no matter how cheap it is.
The future is determined: cross-border e-commerce bids farewell to “barbaric growth” and enters the “era of intensive farming.”
This change will eliminate the “flat sellers” who rely on distribution, low prices, direct mail, and dropshipping; leaving behind sellers with funds, supply chains, and understanding of operations, competition will change from “fighting prices” to “fighting supply chains, services, and products.” Platforms such as AliExpress will further increase investment in overseas warehouses, and traffic will tilt toward warehouse sellers; China’s cross-border e-commerce has entered a new stage of “branding and localization” from “low-price OEMs” to “global brands.”
Three practical suggestions for small and medium-sized sellers: Don’t wait and see, hurry up and try small batch stocking, choose 1 now –
For 2 hot-selling categories, prepare small batches in AliExpress official warehouses or reliable third-party warehouses to test sales and familiarize yourself with the process; give priority to the platform’s official overseas warehouses. AliExpress official warehouses have traffic weighting, storage fee exemptions, and after-sales guarantees, which are suitable for small and medium-sized sellers to get started; abandon low-price inclusion, make cost-effective products, and choose products with good quality, differentiation, and sufficient profit margins.
From the outbreak of cross-border e-commerce in 2016 to the end of small package tax exemption in 2026, in ten years, the industry has gone from “barbaric growth” to “compliance and intensive cultivation.”
AliExpress’ European warehouse sales exceeded 50% for the first time. This is not a statistic, but the end of one era and the beginning of another.
In the past, we relied on luck, low prices, and policy dividends to make money. Now we must rely on strength, supply chain, and localization capabilities to survive.
If you don’t transform, you will be eliminated. This is the reality that is happening.
