An increasing share of international air cargo and most of the industry’s growth expectations are riding on the movement of low value cross border e-commerce items, mainly out of China. The five major platforms have massively increased cross border volumes over the past 3 years and while the transpacific has copped a beating over the past months, growth to Europe and some other markets has more than made up for that. However, e-commerce companies consistently lose or make very little money on this business. That is a problem that the air cargo industry needs to think about.
This article looks at the international operations of Alibaba, Amazon, eBay, Pinduoduo, Shein with a focus on the financial performance, geographical scope and implications for the air cargo business.
E-Commerce is Cool, General Freight is Boring
Our latest forecast could see non express carrier e-commerce traffic accounting for 25-30% of international air cargo volumes, up from about 15% today. Since 2017/2018, cross border e-commerce has been the primary driver of airfreight growth as traditional general air freight traffic stagnated.
In recent years, both Asia to Europe and Transpacific air cargo volumes have benefited from high growth in mostly low value e-commerce shipments originating out of China. APAC to EU and APAC to US volumes this year were 47% and 37% higher, respectively, than at the end of 2019.
Transpacific volumes dropped following the end of the de-minimis exemption in May, but growth in traffic from Asia to Europe has filled that gap. Chinese customs statistics show a surge in outbound low value and e-commerce shipments particularly between May and July, which are likely to be reflected in traffic statistics as they start to become available.
Five Platforms Dominate the Cross Border Business
Cross border e-commerce is dominated by a handful of platforms that account for about 70% of cross border purchases. Every January, the International Postal Corporation puts out an excellent report on the results of their annual cross border shopper survey.
The five most important platforms in the cross-border business are:
- Alibaba, through Ali Express and regional offerings such as Lazada. The company’s international business accounts for about 13% of overall net revenues. Within the international business B2C generates 70% of revenues.
- Amazon, which generates about 30% of group revenue from its international business, of which Germany, the UK and Japan are the most important individual markets. International does not necessarily mean cross border and a lot of cross border business is between neighbouring countries within the EU or within North America. The company does state, however, that Chinese sellers account for a “significant portion” of the cross border business.
- eBay, which also has a large number of China based sellers that serve its main markets. About half of eBay revenues are generated in the United States and a further 26% in the Uk and Germany. Due to lack of growth eBay has lost share to other platforms but is still important particular in the US, UK, Germany and some smaller markets like Australia.
- Pinduoduo which includes the hottest and fastest growing cross border platform Temu. Temu launched operations in 2022 in the US and subsequently expanded to Europe and other countries. Today, the platform serves around 90 markets. The company appears to have well over 20% of the global cross border market. Temu is now the most visited shopping site after Amazon (~631m visits vs ~2.32b) visits per month. Although listed Pinduoduo does not provide a breakdown of international vs domestic revenues.
- Fast Fashion e-tailer Shein was founded in 2008, but has really only seen substantial growth in the last four years. The privately owned company is headquartered in Singapore but has been mulling different IPO options over the past years, most recently in Hong Kong.
We also track other platforms such as Shopify, jd.com, among others, but cross border volumes for these companies are limited compared to the top five listed above.
Who’s Making Money?
Most of these companies provide very limited information on the scale and performance of their cross-border operations, even though four – Alibaba, Amazon, eBay and Pinduoduo are listed. Alibaba provides the greatest level of information and commentary on its international business – the others very little. Shein currently only submits financial filings to the Singapore company registry but is expected to provide more information in the future post IPO.
Apart from their lack of disclosure all five share three key features:
- At a company level, all five are profitable. This was not always the case.
- Domestic commerce and particularly cloud services generate the bulk of company profits (and the means to cross subsidize international operations).
- International or cross border operations generally lose or make very little money. 2024 appears to have been an unusually good year, but that is likely to disappear with the market volatility that we are experiencing in 2025.
For example, in the most recent year Pinduoduo generates $18.4b in pretax income from its PRC based operations but only $0.9b from its non-PRC based businesses. 2024 was also the first year where the non-PRC business made a profit. That’s about as far as we can peer under the bonnet. In 2024, Amazon’s international businesses generate 30% of group revenues but only 6% of profits, which are primarily driven by Amazon Web Services (the cloud computing arm) and more recently by its North American business. Alibaba’s international business which accounted for 13% of revenues in the most recent financial year consistently loses money. Shein is an outlier is that financial filings show moderate profitability over multiple years. eBay is highly profitable, but it’s unclear how much of this profit is linked to cross border sales.
To sum it up – the air cargo business has tied its fortunes to customers who are not really making money on the volumes they are carrying. Time to start thinking about sustainability.