FedEx Expands Chinese eCommerce Delivery Service to U.S. and Europe

FedEx Expands International Service: Key Insights

• Expanding FedEx International Connect Plus: Formerly just available within the Asia-Pacific region, FedEx now offers a delivery service for Chinese sellers to include destinations in Europe and the U.S. to arrive in 2-3 business days.

• Growing Demand for Chinese Products: Pioneered by Shein and Temu, larger retailers in the U.S. and Europe are following the strategy to source a growing number of low-cost products from Chinese factories. The FedEx service will help significantly reduce delivery times.

FedEx is expanding its cross-border service for eCommerce merchants in China, Hong Kong and Japan to encompass destinations in the U.S. and Europe. The service, called FedEx International Connect Plus (FICP), has been widely available to sellers within the Asia-Pacific region, typically delivering packages within 2-3 business days. The expansion of destinations to Europe and the U.S. would significantly reduce current delivery times.

Growing Cross-Border Demand for Products Sourced in China

The new expansion move responds to the growing cross-border demand for shipments in China to be delivered to European and U.S. markets, which has been driven on a larger scale by players like Temu and Shein. Now that Amazon has announced the launch of a discount segment on its own platform, demand for products from China to the U.S. and Europe is likely going to increase further.

FedEx’s Service Would Reduce Delivery Times

Initially, Amazon stated that delivery times would range from 9 to 11 days, a period that is expected to be significantly reduced with the expansion of FedEx's service. Amazon's decision to introduce the discount segment is consistent with Shein's success in global markets, as evidenced by Shein’s expected lead over Amazon in U.S. fashion eCommerce.

Amazon’s move comes at a time when its market leadership is being chipped by low-cost competitors with a strategy that leverages the C2M model and factories in China to undercut most other manufacturers’ prices. Shein is one of the most prominent examples. Temu is another retailer with a comparable strategy. While longer delivery times have so far been a downside of ordering from these providers, the new FedEx service could turn this aspect into a competitive advantage.

Sources: FedEx: 1 2 – Parcel and Postal Technology – Reuters – Supply Chain Dive