Air Freight Costs Are Soaring: Why Chinese E-Commerce Giants Like Shein, Temu Are To Blame
Portfolio Pulse from Surbhi Jain
Chinese e-commerce giants Shein and Temu, owned by PDD Holdings Inc (NASDAQ:PDD), are significantly increasing air freight costs due to the volume of packages they send to the U.S. daily. TikTok Shop and Alibaba Group Holding Ltd (NYSE:BABA) also contribute to the air cargo demand. Temu's expansion in Korea and Japan has led to a substantial increase in subscribers, challenging traditional e-commerce platforms and further pressuring air cargo capacity.
February 21, 2024 | 2:14 pm
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NEUTRAL IMPACT
Alibaba Group Holding Ltd also contributes to the demand for air cargo, though to a lesser extent compared to Shein and Temu, indicating its ongoing relevance in the e-commerce and logistics sectors.
While Alibaba's contribution to air freight demand is noted, its impact is less pronounced compared to Shein and Temu. This suggests a neutral short-term impact on BABA's stock, as it remains a significant player but is not the primary driver of the current dynamics.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
PDD Holdings Inc, owning Temu, is directly impacting air freight costs due to the high volume of packages sent to the U.S., and its aggressive expansion in Asia could further increase its influence on global e-commerce and logistics.
PDD Holdings' ownership of Temu, which is significantly contributing to increased air freight costs and challenging traditional e-commerce markets in Asia, suggests a positive short-term impact on PDD's stock due to its aggressive growth and market disruption.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90