Source | Benyuan Finance

Author | Li Youshan

Over the past three decades, China has become deeply integrated into the global industrial division of labor system and is one of its greatest beneficiaries. Products marked 'Made in China' have been continuously exported through cross-border e-commerce channels, warming consumers in Japan, South Korea, Southeast Asia, Europe, the Americas, and even around the globe. However, the regulatory and compliance risks that accompany rapid growth have always lurked beneath the surface, never truly dissipating.

In the increasingly competitive landscape, Chinese cross-border e-commerce platforms have gradually realized that the real challenges may not come from overseas competitors in the same Track ( Track can be translated as 'field' or 'sector' but kept as pinyin for cultural context), nor from domestic peers. Instead, the decisive variable lies with the 'referees' who adopt a 'laissez-faire approach when convenient and intervene when necessary': the boundaries of rules and enforcement logic are flexible, with scales that shift unpredictably, making them difficult to anticipate or defend against.

Just as the domestic e-commerce industry begins to stabilize, regulatory turbulence arises overseas: On July 20, the European Commission imposed a €550 million fine on AliExpress under the Digital Services Act (DSA), marking the highest penalty since the law's enactment. The reason cited was failure to adequately assess and mitigate risks associated with the sale of illegal, unsafe, or counterfeit products on its platform.

A spokesperson for Global AliExpress responded, 'We disagree with the [European Commission's] decision and the disproportionate fine.' A Ministry of Commerce spokesperson also firmly opposed the EU's use of platform regulation as a pretext to erect digital barriers, calling it an act to suppress the normal operations of Chinese e-commerce enterprises.

Opposition aside, condemnation aside, AliExpress's development and pressures in European and American markets reveal that for Chinese e-commerce platforms aspiring to become the next Amazon, and for Chinese brands seeking to replicate Coca-Cola's global success, the journey may require enduring far more than '81 difficulties.'

Brand Globalization Initiative

Beginning with Alibaba.com's establishment in 1999, the history of Chinese cross-border e-commerce is one of digital upgrading in China's foreign trade and the global export of China's supply chains, e-commerce models, and digital technologies.

Among the 'Four Little Dragons,' Shein disrupts traditional fast fashion with a flexible supply chain, TikTok Shop replicates China's proven livestream e-commerce and short-video marketing models globally, and Temu rapidly penetrates European and American markets through full-service management and ultra-low prices.

AliExpress, the earliest entrant among the four with the most mature infrastructure, officially launched in 2010 and began cross-border retail operations in 2012. Initially relying on a third-party marketplace model, it leveraged Alibaba's factory and merchant advantages to grow its user base from just over one million to over 100 million.

After Alibaba's IPO, AliExpress began aggressively removing non-compliant small merchants in 2016 to promote branding. At the time, the platform's localized infrastructure was incomplete, failing to meet overseas consumer demand for long periods, resulting in low repurchase rates and visible fatigue. By late 2021, overseas business was elevated to a group strategic priority, with Jiang Fan—Alibaba's youngest partner at age 33—taking charge, underscoring the task's gravity.

For years, Amazon has been the dominant 'home field' in narratives about Chinese merchants going global. Internally, AliExpress believes competing on price alone cannot win and is determined to follow Amazon's path of 'branding.'

Notably, AliExpress aims to do more than poach top Chinese brands from Amazon. It seeks to replicate its domestic brand-serving experience, enabling Tmall and Taobao merchants to sell overseas.

In 2025, AliExpress officially launched its 'Super Brand Globalization Initiative,' attempting to fill the ecological niche for mid-to-high-end quality e-commerce. This transformation is 'arsenic' for white-label sellers relying on low-price volume but 'nectar' for branded sellers.

On the cost side, it emphasizes 'building global brands at half Amazon's cost.' Platform commissions typically range from 5%-10%, lower than Amazon's 15%-25%. Centralized logistics and managed operations reduce merchants' labor and logistics costs, attracting brand merchants to diversify inventory.

For operations and marketing, in late September 2025, AliExpress launched a prominent Brand+ section on its homepage. Over 2,000 branded products received exclusive badges, gaining traffic exposure and marketing support. Offline, it deeply penetrated local markets, such as collaborating with brands on product reviews in Poland, hosting a trendy toy music festival in Spain, and organizing fan viewing events in London bars, helping brands quickly establish overseas recognition.

On the fulfillment side, it made 'brand globalization + overseas managed services' its annual strategy. It fully promoted Choice, using platform-controlled inventory to lower front-end prices; launched the 'Saiya Plan' in the U.S. market and expanded overseas warehouses by 2.5x; provided exclusive traffic support for brand merchants in South Korea; and matched Amazon FBA's fulfillment experience through Cainiao's global warehouse network.

For user experience, it emulated Amazon Prime with services like free shipping, price protection, and fast returns, aiming to boost user trust and repurchase rates, closing in on Amazon's high user stickiness.

AliExpress disclosed that in 2025, platform brand GMV grew over 40%; in the first half of 2025, the number of settle in (zhùrù, 'onboarded') brands increased 70% year-on-year, with over 10 million-dollar brands generating higher global sales on AliExpress than on Amazon.

At a closed-door brand meeting in Shenzhen in April 2026, AliExpress President Jing Shi confirmed plans to double down on brand strategy, expanding from Amazon's established brands to domestic Tmall new brands; transitioning from a sales channel to brand-growth infrastructure.

The Ruthless B-Side

Citing data from business analysis media VISUAL CAPITALIST, 36 krypton reported that by 2025, the top three global e-commerce platforms by traffic had become a tripartite standoff between Amazon, Temu, and Alibaba's AliExpress.

According to Q4 2026 earnings, Alibaba International Digital Commerce Group (AIDC) reduced its adjusted EBITA loss from ¥3.574 billion to ¥138 million, with AliExpress identified as the primary driver.

Facing Temu's 'ultra-low-price' offensive, AliExpress was dragged into price wars but gained little advantage. Differentiating through 'asset-heavy branding' requires lengthy investment cycles.

Against Amazon, competing in the incumbent's territory, AliExpress remains relatively weak in foundational capabilities.

Compared to Amazon's 20-year deep cultivation (shēnggēng, 'deep cultivation') in Europe and the Americas, Cainiao's overseas warehouse delivery density lags, and its overall market scale is still catching up. Sellers may operate on multiple platforms, but revenues remain concentrated on Amazon. Additionally, AliExpress's brand service ecosystem is still under construction, with AI tools lacking maturity and alignment.

Meanwhile, Amazon has countered with its low-price channel Haul, infiltrating the value market. This year, Amazon slashed fees on its European site, reducing commissions for clothing and accessories to as low as 5% and FBA delivery fees by €0.32 per item on average, expanding discounts to products under €20. This defends AliExpress's core price advantage, further squeezing its branding headroom.

Deep-seated market perception and cultural symbol barriers pose another obstacle.

Amazon users primarily engage in purpose-driven shopping, while industry estimates suggest over 80% of AliExpress's traffic comes from recommendations, with users leaning toward impulsive, price-sensitive purchases. A long-standing low-price stigma makes brand premium pricing difficult, naturally lowering conversion rates for mid-to-high-end goods compared to Amazon. While membership tied to trust could replicate Taobao's 88VIP model domestically, overcoming cultural and management radius limits remains a pressing challenge in the branding journey.

Greater risks stem from compliance and regulatory frictions.

AliExpress's rapid growth in its first decade after 2010 essentially capitalized on a 'laissez-faire' period in global cross-border e-commerce regulation. During this phase, regulators worldwide generally adopted Hayekian stances, treating cross-border micro e-commerce as a consumer supplement, rarely imposing market entry barriers or platform liabilities, allowing asset-light models ample room to grow.

Around 2021, as cross-border e-commerce scales expanded, impacts on local taxation, manufacturing, and consumer rights became increasingly apparent. Europe and the United States (Ōuměi, 'European and American') regulators collectively shifted toward strong intervention, with Chinese go overseas (chūhǎi, 'going global') platforms becoming key enforcement targets. Policy crackdowns imposed compliance and cost pressures across the entire supply chain for platforms and merchants.

In 2025, the U.S. eliminated tariff exemptions for sub-$800 parcels (T86). In 2026, global tariff policies saw severe turbulence: the U.S. proposed additional tariffs, the EU revoked exemptions for sub-€150 parcels, and the UK, Thailand, and Mexico simultaneously tightened thresholds for small-package imports.

Tightening tax policies marked the 'referees'' first intervention, directly targeting cross-border e-commerce's core competitive edge: price advantage.

Digital compliance inflicted even greater damage. The EU's €550 million fine on AliExpress on July 20 for 'failure to fulfill obligations in managing risks of illegal goods' is a prime example.

The EU investigation identified three systemic failures at AliExpress: (1) severely distorted risk assessments that deliberately underestimated risks of counterfeit and unsafe goods circulation due to inadequate manual reviews; (2) weeks-long delays in removing non-compliant products, with algorithms continuing to promote them; and (3) ineffective penalty mechanisms for non-compliant merchants, failing to impose meaningful constraints.

The €550 million fine far exceeded the quarterly loss reduction amplitude (fúdù, 'magnitude') of Alibaba International Digital Commerce Group, nearly erasing years of operating gains in Europe for AliExpress.

Previously, the EU had also enforced the Digital Markets Act, fining Apple €500 million for violating anti-steering obligations and Meta €200 million for its 'pay-or-consent' ad model. Facing fines and rectification orders, both Apple and Meta adopted a 'rectify while appealing' strategy, highlighting the EU's concentrated enforcement efforts as unavoidable.

Compliance costs represent long-term rigid expenditures. AliExpress must expand its content review and compliance teams severalfold, overhaul algorithm recommendation systems, establish full-supply-chain product traceability, and regularly submit independent audit reports, incurring annual compliance investments in the hundreds of millions—costs never imposed by market competition.

AliExpress's plight is not unique but reflects a shared challenge for all Chinese cross-border platforms. The 'referees'' policy shift mirrors rising global trade protectionism and digital sovereignty competition, meaning compliance capabilities have transformed from a platform 'cost item' to a 'core competitive advantage.'

Looking ahead with broad vision, understanding regulatory cycles, anticipating policy shifts, proactively mitigating operational risks, and building localized compliance capabilities have become more critical survival lessons than outcompeting rivals.

As *A Tale of Two Cities* opens, 'It was the best of times, it was the worst of times.' From information matching to transaction closures, from wild growth to compliant development, from low-price dumping to brand globalization, the future of cross-border e-commerce will hinge on comprehensive competition in supply chain capabilities, technological prowess, and branding strength.

For AliExpress, this elephantine dance may require even more time from Jiang Fan.

|References [1] 'Brand Wars Go Global: AliExpress, JD Joybuy, and Xinpingmu Choose Different Paths' – LatePost Finance [2] 'When Chinese Infighting Makes Koreans Cry First' – Yuanchuan Institute [3] '2026 China Export Cross-Border E-Commerce Development Trends White Paper' – Data Operations/Yu Shuya, Design/Yan Weier *All rights reserved. No reproduction without authorization.

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