Chinese e-commerce platforms such as SHEIN and Temu are gaining a larger foothold in the U.S. market, driven by a strategic plan backed by the Chinese state, a report by the Information Technology and Innovation Foundation (ITIF) suggests. ITIF describes itself as a leading think tank on science and technology policy.
The report outlines how Chinese platforms benefit from substantial subsidies, logistical advantages, and favorable regulations, allowing them to expand quickly and offer lower prices, challenging U.S. counterparts. These platforms also exploit loopholes in American import regulations, raising concerns over product safety issues, data security threats, and counterfeit goods.
"Chinese e-commerce platforms are growing rapidly and are increasingly popular with U.S. consumers. They are innovative and adaptive, but their rise is not just the result of market forces—it’s also deeply intertwined with state-backed industrial policy," said ITIF Policy Analyst Eli Clemens. "This creates two major risks: It puts U.S. e-commerce companies at a competitive disadvantage, and it exposes U.S. consumers to potential harm."
Among the benefits Chinese platforms enjoy are state-backed subsidies and tax incentives for AliExpress, while SHEIN receives financial exemptions and logistical advantages. The report adds that these platforms have faced investigations for selling counterfeit goods and committing labor violations.
China's support for its e-commerce platforms is seen as a strategy to enhance national power by 2035, integrating e-commerce more closely with the nation's broader military logistics framework.
To defend U.S. consumers and companies against these practices, ITIF recommends several policy measures for U.S. legislators. These include addressing the de minimis loophole, enhancing customs enforcement with AI, enforcing reciprocal market access, and promoting U.S. e-commerce infrastructure investments.
"The future of e-commerce is not just about consumer choice, but also about global power dynamics," Clemens said. "China’s strategic use of e-commerce platforms as tools for economic and geopolitical dominance has created a high-stakes race. If policymakers fail to address the advantages leveraged by Chinese state-backed platforms, they risk not only compromising the competitiveness of U.S. businesses but also ceding influence over critical data assets to America’s strategic competitor."
Nicole Hinojosa, [email protected]