Middle East Emerges as E-Commerce Haven Amid U.S. Tariff Turmoil

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TMTPOST -- The U.S. decision to impose reciprocal tariffs and revoke the "de minimis" T86 rule for parcels under $800 has sent shockwaves through China's cross-border e-commerce ecosystem. As a result, a growing number of Chinese merchants are now pivoting to the Middle East, viewing the region as the next frontier for global expansion.

According to long-time Middle East logistics provider United Alliance Logistics, the shift has been swift. "Since the tariffs were announced on April 2, we've been receiving hundreds of new business inquiries daily. Many sellers have already begun shipping to the region," a company spokesperson told TMTPost.

The Middle East wasn't traditionally on the radar for China's cross-border sellers, who historically prioritized the high-spending U.S. and European markets, or the cost-efficient and culturally familiar Southeast Asia. Fragmented infrastructure, limited market openness, and high logistics costs once made the region an afterthought.

But that's quickly changing.

Despite its population of over 500 million across 33 countries, the MENA (Middle East and North Africa) region remains a complex, fragmented market. Trade inefficiencies—even among the tightly knit Gulf Cooperation Council (GCC) countries—mean goods must clear customs repeatedly, adding time and cost. Logistics providers say challenges persist in Egypt and Turkey, where protectionist policies complicate cross-border fulfillment.

Infrastructure bottlenecks, from underdeveloped road networks to non-standardized delivery addresses, have long dampened ROI in the region. And while many Middle Eastern consumers once preferred cash on delivery—accounting for as much as 80% of transactions—high rejection rates and lengthy cash cycles made the market a tough sell.

Still, experts say it's time to rethink Middle East ROI.

"In markets like Saudi Arabia, traditional ROI metrics don't fully capture the opportunity," said a senior executive from a leading Chinese tech company. "The real value lies in capitalizing on the honeymoon period of Sino-Arab relations and securing early market presence."

Middle Eastern e-commerce is entering a high-growth phase, underpinned by an expanding digital infrastructure and surging consumer demand. The region's weak manufacturing base creates a natural dependency on imports—an area where China excels.

Global platforms have taken notice. Amazon entered the region in 2017, Shein in 2015, and more recently, TikTok Shop and Temu launched local operations. Data shows the MENA e-commerce market grew at a 32% CAGR from 2018 to 2022. In 2023, growth clocked in at 11.8%, with Saudi Arabia leading the surge.

Local digital adoption is accelerating. Saudi Arabia's electronic payment rate hit 79% in 2024, up significantly from prior years. Logistics players such as iMile and J&T Express are investing heavily, with iMile reporting a 52% year-over-year order increase during Ramadan 2025 and a COD delivery success rate of over 91%.

Meanwhile, Amazon reports that FBA (Fulfillment by Amazon) inventory from international sellers in its Middle East station more than doubled in 2024.

High-spending, tech-savvy millennials and Gen Z consumers are helping fuel the growth. According to Amazon, demand for gaming peripherals, smart home devices, and tech accessories surged during Ramadan and Eid. Brands like Anker saw average order values for smart home appliances rise by 23% year-over-year.

Luxury and lifestyle segments are also booming, aided by a growing base of female consumers entering the workforce and an expatriate population that makes up over 30% of Saudi Arabia's population and 88% in the UAE. These demographic shifts are unlocking new categories of demand, from home security to digital gifts.

The Ramadan online gift market GMV jumped 203.7% in 2025, according to a joint report by Flowwow and Admitad.

While the Middle East may not be a perfect market, its rapid digitalization, favorable demographics, and growing appetite for imported goods make it a strategic second front for Chinese cross-border sellers facing headwinds in the U.S.

With the right positioning and local partnerships, merchants who move early may gain a long-term foothold in what could become one of the world's most dynamic e-commerce battlegrounds.