CITIC Construction Investment: The overseas warehouse model will replace direct mail as the mainstream, and end-to-end integrators with full chain capabilities will eventually win

The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that cross-border e-commerce logistics is undergoing a profound transformation from “cross-border” to “localization.” The overseas warehouse model is expected to overtake direct mail for the first time in 2026 and become mainstream. Its driving force is mainly due to the impact of the new European and American tariff policies (the US abolishes the $800 tax exemption and the EU cancels the 150 euro tax exemption) on the cost effectiveness of direct mail, which forces platforms and sellers to adopt localized fulfillment. Furthermore, due to the strategic retreat of traditional giants (UPS/FedEx/USPS), there is a structural gap in US last-end delivery, which has become a core competitive barrier for cross-border e-commerce logistics. In the future, single-link logistics providers will face pressure, and end-to-end integrators with the full chain capability of “China Direct Mail+Overseas Warehouse+Local Terminal” will eventually win.

CITIC Construction Investment's main views are as follows:

The overseas warehouse model will replace direct mail as the mainstream

(1) In the past five years, the CAGR of China's cross-border e-commerce logistics industry was 11.9%, while the growth rate of SHEINGMV reached 43.3%, reflecting structural dividends. According to Frost & Sullivan data, the overseas warehouse model is expected to surpass the direct mail model (10.7%) in the next 5 years, and the market size is expected to surpass direct mail for the first time in 2026, accounting for 50.6%.

(2) The core competitiveness of the direct mail model is “duty-free small package+zero inventory,” but the new European and American tariff policies (the US abolishes de minimis in May 2025, and the EU abolishes the 150 euro exemption and imposition of fixed tariffs in July 2026) directly impacted its cost performance ratio. The direct mail model also faces three major weaknesses: low gross margin (about 7%), high dependence on major customers (Yanwen's largest customer accounts for 51.9% in 2023), and large fluctuations in air freight costs.

(3) In order to meet the challenges, cross-border e-commerce platforms are promoting triple adjustments: localized implementation, multi-brand stratification, and supply chain advancement, which directly boosts demand for overseas warehouses. Overseas warehouses accounted for 88% of shipments in 2025, and the growth rate of the number of overseas warehouses increased to 40% under the influence of tariffs. Changes in SHEIN's revenue structure also confirm this. The share of semi-hosting and POP models continues to rise, and the company is vigorously developing local warehouses in the US and Europe.

The reason why SHEIN's single ticket fulfillment cost is much higher than the price of Yan Wen's single ticket

In 2025, SHEIN's single ticket fulfillment cost was 18.3 US dollars, while Yan Wen's single ticket price was only 6.2 US dollars, a difference of about 12 US dollars. The reasons are divided into four points:

(1) The scope of services is different. SHEIN covers the entire link (from factory to consumer), while Yanwen mainly undertakes the cross-border main line+customs clearance section. The cost of this section only accounts for 35-40% of the total link cost.

(2) Differences in package attributes. SHEIN packages are heavier (multiple packages), and the destinations cover 160 markets, including a large number of high-cost Latin American and Middle Eastern routes, while 90% of Yanwen's business is concentrated on mature routes in North America and Europe. (3) The bargaining position is different. Yan Wen provides extremely low prices to obtain orders from large customers (such as TEMU), resulting in the gross margin of large customers being only 3%, far lower than that of small and medium-sized customers. After the withdrawal of large customers in 2024, their overall gross margin increased. (4) Tariff responsibilities are different. SHEIN includes tariffs in the cost of contract implementation, and estimates that the impact of single tariffs in 2025 is about 0.2 US dollars. In the future, the EU New Deal will increase by about 1 US dollar, while Yan Wen only provides customs clearance services and is not responsible for tariffs. Quantitative attribution shows that differences in service coverage contributed to the 45-70% gap.

The industry accelerates the layout of US last-haul delivery

(1) China's cross-border e-commerce logistics market is extremely fragmented (CR5 is only 8.1%), which is due to the fact that most companies only “outsource” a portion. In the whole chain, trunk line transportation, overseas warehouses, and final delivery are the core value links, while final delivery has become the focus of competition for Chinese companies due to its strong landing characteristics and the reluctance of overseas companies to do it.

(2) The US late stage market is experiencing a “once in 30 years” structural shift: on the one hand, platforms such as SHEIN and TEMU bring a large number of low-value parcels (an average of about 3 million pieces per day), which require extremely high last-range delivery costs (3-5 US dollars/piece); on the other hand, the traditional Big Three UPS/FedEx/USPS are strategically retreating due to factors such as low profits and trade union costs, and USPS is facing huge losses, leading to a structural “shortage of supply” in the market. New forces (such as GoFo, UniUni, Yan Wen, etc.) have verified replicability through the “self-operated sorting+crowdsourced capacity” asset-light model and entered at a lower price than USPS. The competitive dimension of the industry is shifting from “price” to “end control” capability.

risk analysis

1. Continued tightening of European and American tariff policies and risk of a “double kill” effect; 2. Risk of fluctuating air capacity costs and declining profitability of direct mail models; 3. Increased industry competition, high customer concentration, and the risk of return on investment in new businesses