Trade has changed form in recent years on various levels.
(a) On the one hand, online purchases are increasing their percentage year after year, exerting a lot of pressure on physical stores, but at the same time giving much more choices to consumers.
(b) At the same time, the rise of China and the expansion of its influence in various parts of the world seems to pass through the control of trade routes, with the result that the country has gradually gained control of a large number of ports and ownership of logistics.
(c) Finally, the recent trade war, involving the US, China and the EU, has changed the balance and has redirected exports to other markets, targeting a different consumer audience.
Rise of online shopping
According to recent statistics, 63% of purchases start online, even if purchases are made in a physical store at the end. Consumers check product details, read reviews, and compare prices before deciding where to buy from.
According to the findings of a recent survey in Greece, for online consumers, online purchases represent an average of 10% of their total purchases. At least 1 in 3 online consumers are now considered highly advanced, since their online purchases account for more than 20% of their total purchases.
As far as Cyprus is concerned, the percentage of online purchases is still quite small, since it amounts to only 6-7%. However, over time this will inevitably increase, but without – at least for the time being – threatening physical stores.
Some other interesting data in relation to online shopping indicate that: 37.9% of consumers buy after viewing ads on social media. From viral beauty products to the most popular gadgets, social platforms are shaping shopping habits more than ever.
While social media drives online shopping, online vs. offline marketing statistics indicate that offline interactions, such as promotions and in-store events, significantly influence purchasing decisions.
In the U.S., $80.55 billion was spent on social media advertising, while experts predict spending will reach $82 billion this year as companies continue to invest in social media for audience engagement and sales. Facebook dominates the market among these platforms, accounting for over 80% of social media advertising spend.
China's Sovereignty
Not long ago, EU Trade Commissioner Maroš Šefkovic proposed a €2 fee on all small parcels entering the EU from low-cost Chinese e-retail platforms, such as Temu, Shein and Alibaba.
The fees will apply to parcels worth less than 150 euros, according to a letter sent by Šefkovic to national governments.
Parcels that go to warehouses or distribution centers will still have the same fee, i.e. 50 cents. Of course, before this decision, EU countries made sure to give ownership of a large number of ports to Chinese companies, so that they are now able to control most of the trade routes.
The control of the ports
Chinese companies — mostly state-controlled giants such as COSCO Shipping Ports (CSP), China Merchants Port Holdings (CMP) and Hong Kong-based private Hutchison Ports — have gained substantial control over critical European port infrastructure. While this is presented as a trade strategy, their operational models reveal broader targets – and the European Union is finally beginning to realise the size and risks of this penetration strategy.
China's expansion into European ports is not just about freight, it's about strategic power projection. That is why Europe must choose whether to continue to cede vital infrastructure to competitors or to claim its sovereignty and strategic autonomy. By August 2023, Chinese companies had an investment presence in 31 container terminals in Europe:
The 23 are controlled by COSCO and China Merchants (majority or strategic minority), while 8 operate under Hutchison Ports. The geographical dispersion covers 13 countries, including locations next to NATO bases and critical military infrastructure. Among these investments are the ports of Piraeus, Valencia and Bilbao in Spain, Vando Ligore in Italy, Hamburg in Germany, Rotterdam in the Netherlands, Marseille and Le Havre in France and many others.
Warehouses within the EU
As for the issue of the tax (surcharge) that the EU is attempting to impose on products from China, it seems that Chinese companies have found a solution here too, by creating warehouses within the EU.
As a result, they reduce delivery times and save EU fees. In particular, Temu, the fast-growing e-commerce platform known for its low prices and wide variety of products, has made another drastic move in the European market.
By opening local warehouses, Temu aims to reduce shipping times and costs, providing an even more seamless shopping experience for its customers. For European consumers, this development means faster deliveries and easier returns, while for domestic retailers it represents another challenge to remain competitive in an increasingly globalised market.
By creating warehouses closer to its customers, Temu can: Deliver products faster, often within days instead of weeks. Simplify and speed up returns, addressing one of the main points that afflict online consumers. Reduce supply costs, allowing for further price reductions or improved profit margins.
The trade war
The dispute between the US and China over the imposition of tariffs on the one hand, on the one hand, proved that the two superpowers rely largely on each other, but on the other hand, it gave the opportunity, especially to China, to turn to other markets. In particular, the world's two largest economies have a trade balance between them which based on official data for 2024 was $585 billion. The U.S. imports much more than it exports to China.
Chinese imports to the U.S. in 2024 were $440 billion, with their exports being about 1/4 smaller, $145 billion. The trade balance between the world's two largest economies was $295 billion and is in deficit for Washington, which gives about 1 percent of its GDP to Chinese coffers.
China, with four times its exports to the U.S., was more exposed to this measure of tariffs. Its own products became more expensive in the US, with the risk of a significant drop in sales in a market that is not the largest for Beijing, but is one of the "heaviest" in volume.
China now has the way, based on the exposure of American industry on its territory, to exert substantial pressure on the heart of the American economic system. Apple's example, in addition to being indicative of the immediate consequences, is also revealing of how far Xi and China can go.
To transfer just 10 percent of the company's total device production from the dozens of factories the company has to Chinese territories back to the U.S. today, it needs to invest more than $30 billion and it takes at least 3 years. An iPhone that the American currently buys for $1,000 – if the situation continues as it is – will cost US users 3.5 times more...
The impact on small European businesses and their choices
The seizure of European markets by China tightens the noose around mainly small, European companies. Given this, these companies cannot compete with Chinese companies, especially as the landscape has been shaped by China's control of a plethora of European ports, the creation of warehouses in Europe and the dominance of Chinese apps such as Temu and Shein.
What European businesses can do: (a) Retailers need to focus on selling more than just a product. By emphasizing the story behind their offerings and creating unique experiences, they can add value to their products that the standardized approach of Chinese companies cannot replicate.
(b) Local businesses have the opportunity to build lasting relationships with their customers by offering personalized services, loyalty programs, and community engagement.
(c) As sustainability and ethical consumption become more important to consumers, domestic small-scale retailers can highlight their closeness and commitment to the community. An emphasis on smaller supply chains, better working conditions, and eco-friendly practices can attract quality-conscious buyers who value responsible purchasing decisions.
SOURCES: protothema.gr / aqurate.ai/el/blog / crisismonitor.gr / qrcode-tiger.com
