Three Post-Election Ecommerce Predictions

With the 2024 Presidential election behind us and a new US president elected, we can anticipate several changes over the coming months and years, driven by the policies the new administration has outlined. Because changes in political policies can have a big impact on ecommerce businesses, it’s essential for sellers, manufacturers, fulfillment companies, and other supply chain stakeholders to stay informed about potential shifts to strategize effectively. 

In recent years, ecommerce has experienced tremendous growth, with direct-to-consumer (DTC) channels diversifying rapidly. Social commerce platforms, such as TikTok, YouTube, and Instagram, have become major sales channels, especially for brands aiming to connect with younger audiences. 

The globalization of ecommerce continues to gain momentum, creating unprecedented ease for buyers and sellers to connect across borders. While Amazon remains dominant in US ecommerce, marketplaces like Temu and Shein have rapidly gained global and domestic market share. These newer players have utilized favorable trade policies, especially the use of Section 321, to ship goods directly from China to the US without incurring tariffs, enabling them to offer highly competitive prices. As a result, they have seen significant growth in sales, with an estimated 60% of imports now coming directly from China. 

Section 321 will Change but Won’t Go Away

Section 321 allows duty-free entry of shipments valued under $800, offering brands a cost-effect way to sell directly to US consumers by shipping from other countries, which can significantly reduce expenses. The popularity of section 321 has drastically increased from 140 million shipments to over one billion shipments per year over the last ten years. This has led to increased scrutiny by the US government, as Section 321 was initially intended to promote trade between North American countries – not allow others to bypass import tariffs.  

Over the last few years, the popularity of Chinese-based ecommerce marketplaces like Temu and Shein has skyrocketed. It’s estimated that 60% of the US imports today are from China and over one million packages per day are entering the US via section 321, tariff free. In 2024, the Biden Administration has stated that it will limit or change the use of Section 321 for imports from China. 

To add complexity to the matter, Trump has stated that he plans to increase import taxes on products imported from China. This is possible under section 301, which gives the US government the authority to raise or implement specific tariffs. While tariffs might go up for Chinese imports under Section 301, companies can take advantage of Section 321 to circumvent those tariffs through importing via non-direct China to US routes. The proposed blanket increase on Chinese import taxes will directly impact all US brands that manufacture their products in China and sell them in the US. 

These pending changes will require affected US companies to reassess their supply chains. Many businesses have already taken proactive steps by shifting their manufacturing from China to countries like Vietnam, Taiwan, and Mexico to mitigate the impact of rising US tariffs on Chinese goods. Additionally, companies are exploring the use of Section 321 through Canada or Mexico to sidestep higher import tariffs. 

With the expectation of higher tariffs, some expected to increase by as much as 60%, we may see companies stock piling inventory soon to get ahead of rising product costs from China. Obviously, this could have downstream ripple effects throughout the supply chain.  and the consumers themselves in the form of higher prices. 

Social Commerce is Poised for Continued to Growth

Social commerce platforms, like TikTok, Whatnot, and Instagram, have experienced remarkable growth over recent years. In 2024, TikTok unexpectedly emerged as the 9th largest ecommerce sales channel in the US. Companies are increasingly relying on these platforms to engage and sell to the next generation of consumers. 

Despite TikTok’s rapid growth and its adoption as a key element in brand strategies, it has faced its own set of challenges. The Biden administration has raised concerns about the security of the Chinese-owned platform, issuing an ultimatum for TikTok to either sell its US operations or separate from its Chinese entity. There is some speculation that the President-elect may allow TikTok some leeway to maintain competitive diversity in the social commerce space, especially with Meta holding a strong position in the US market. 

Social commerce platforms are still in a very nascent phase, we only know how essential these sales channels are becoming for many brands, particularly those that have embraced these platforms early. Brands will increasingly need to allocate resources (including high-quality omnichannel fulfillment) to maximize their presence and effectiveness in this evolving space. 

More Competition for Ecommerce Marketplaces

Amazon has long held a dominant position in the US ecommerce market, now accounting for nearly 40% of online sales with more than a million active sellers. To online shoppers, it is its own verified search engine. Operationally Amazon has continually expanded its offerings through Amazon Seller Central, providing services like Fulfilled by Merchant (FBM), Fulfilled by Amazon (FBA), and Multi-Channel Fulfillment (MCF). This ecosystem has created a thriving marketplace for both sellers and buyers. However, Amazon now faces intensifying competition. 

Walmart and Target have leveraged their strong brand presence and extensive retail infrastructure to challenge Amazon directly. Among major US retailers, Walmart is the only one outpacing Amazon in e-commerce growth, with sales increasing at 13.6% compared to Amazon’s 10.5%. Like Amazon, both retailers offer same-day and next-day shipping, but they also have an advantage that Amazon lacks—in-store pick-up options, physical stores for customers to touch and feel the products, and an equally loyal customer base. This allows them to deliver a “Prime-like” experience that can often meet or exceed customer expectations, drawing new consumers to their platforms.  

Additionally, international marketplaces like Temu have rapidly emerged as significant players. In just three years alone, Temu has become the second-largest ecommerce marketplace in the US and globally. Changes to Section 321 from goods from China will force Temu to adapt by selling and fulfilling more US goods. Initially focused on low-cost goods, Temu is now collaborating with US brands to sell on their platform. Temu has gotten the attention of Amazon which launched its competitive low-cost store, Amazon Haul, to challenge Temu and Shein. With a substantial US customer base, it provides a compelling new sales channel for American companies looking to diversify their online presence. 

Bottom Line

As we look ahead, the ecommerce landscape is on the cusp of some substantial changes under the new US administration. Businesses across the board—from sellers and manufacturers to fulfillment providers—will need to stay nimble and informed to keep pace.  

The growth and virality of social commerce, the changes in global trade, and the rise of new ecommerce marketplaces are creating an exciting but challenging environment. Adapting to new regulations, especially around tariffs and trade rules, will be crucial for brands that want to stay competitive.  

By proactively adjusting their strategies and exploring new ways of getting to customers, ecommerce businesses can turn potential obstacles into opportunities, positioning themselves to not only survive but thrive in the evolving marketplace. 

Tags: Expert Advice & Tips, Omnichannel Fulfillment