Cross-border small parcel tax exemption nearing an end; for the first time, over half of AliExpress shipments from European overseas warehouses

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Author | Huang Yu

As the EU's cancellation of the tax exemption policy for cross-border parcels under 150 euros (July 1st) is rapidly approaching, the demand for overseas warehouses is experiencing a surge.

Wall Street News has learned that AliExpress, Alibaba’s cross-border e-commerce platform, on the first day of its overseas 618 campaign in 2026, saw the proportion of orders shipped from local warehouses in Europe exceed 50% for the first time in core markets such as Spain, France, and Poland, surpassing direct cross-border orders.

Wall Street News also obtained data from Cainiao showing that in the first three months of this year, Cainiao's overseas warehouse shipments in Europe increased by 32% year-on-year. Taking Cainiao's French warehouse, which serves a major platform, as an example, its overall capacity utilization rate in the first quarter was close to saturation.

An insider in the e-commerce industry told Wall Street News that as the EU tightens tax policies on low-value parcels, the small parcel model that relies on direct cross-border shipping is facing rising customs clearance costs and compliance pressure, making the shift of fulfillment to local European warehouses a new choice. “The Four Small Overseas Dragons,” including AliExpress, SHEIN, and Temu, are all accelerating their local warehousing layout in Europe.

The small package tax exemption policy was once a booster for the rapid expansion of cross-border e-commerce. However, since 2024, countries including the US, EU, UK, Japan, Vietnam, and Brazil have all canceled or proposed canceling the small package exemption policy.

Since the US canceled the "small package exemption" policy for Chinese goods in April 2025, overseas warehouses have seen a wave of demand growth as companies respond to external uncertainty.

Wall Street News learned from Cainiao that its global overseas warehouses processed 32% more orders in 2025 compared to the previous year.

Bruce, the Singapore & Malaysia Country Manager for Cainiao Global Supply Chain, told Wall Street News that the demand from brands going overseas is shifting fiercely from direct cross-border shipping to overseas warehouses.

The so-called overseas warehouse refers to storage facilities where, in cross-border trade, multinational companies transport goods in bulk to the target market country, establish or rent a warehouse locally, and then store the goods there. Goods are sorted and shipped directly from the warehouse according to local sales orders.

A cross-border logistics professional told Wall Street News that by establishing overseas warehouses in target markets, logistics efficiency is significantly improved, with orders able to be shipped the same day or next day after being placed by consumers; direct cross-border shipping takes at least several days or even longer. For larger brands, the overseas warehouse model offers a better customer experience, with highly efficient and stable fulfillment that supports sales growth.

After AliExpress first launched its semi-managed model providing logistics and warehousing services in 2024, it quickly ramped up its “overseas managed” model. Under this model, merchants only need to connect goods to the overseas warehouse, while the platform handles marketing, user operations, and local fulfillment. This is regarded as an important service model for local operational management.

According to Wall Street News, over the past half year, AliExpress has accelerated the development of its warehousing and distribution system in Europe, currently covering Spain, France, and Poland, with an official warehouse in Germany under construction.

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