An e-commerce platform where individual sellers with personal storefronts sell handmade or vintage items in the tradition of an open craft fair probably never expected their success to be defined by geopolitics. Yet, Etsy’s Seller Handbook now has a long section explaining what global tariffs mean for shop owners and what they should do about them. How is geopolitics rewriting the rules for e-commerce?
The digital revolution has made cross-border e-commerce more accessible and convenient. Whether it is eyelash serums, soccer balls, cameras, or millions of other products, customers increasingly turn to online retailers, even those located in a different country. Scroll through different options, place an order, and expect your package at your doorstep.According to one estimate, the size of the global B2C cross-border e-commerce market was expected to reach a staggering $7.9 trillion by 2030, up from just 785 billion in 2021.
Geopolitics, however, can change the trajectory of that growth. And its impact is visible in the shopping options you see, how you order, and the delivery of your package.
Shopping Options
Cross-border e-commerce was supposed to democratize shopping. Everyone could reach for a product, sold by any retailer, located anywhere in the world. As long as it could be packed up and shipped, any customer could, in theory, get it. Companies like Shein made us believe.
Shein, a global e-commerce platform specializing in fast fashion, offers as many as 600,000 items on its platform and ships to 150 countries around the world. But Indian customers couldn’t access Shein products for five years.
In 2020, Shein was one of several Chinese companies banned by India following clashes between India and China along the Himalayan border. Before the ban, the app was popular in India; it offered Indian customers a variety of trendy designs at affordable prices. But once it was blocked, customers had to look elsewhere.
In 2025, the company reentered the market in partnership with the Indian company Reliance Retail. Under a long-term licensing deal, Shein’s technology would support the sale of products manufactured and sourced in India. Unlike five years ago, when clothes were imported from China, style options for a customer in India look different.
Order and Payment
The premise of cross-border e-commerce was that a customer can buy from (and hence pay) a seller in a different country. But payment interoperability is still an issue. According to one study, about a third of firms in Southeast Asia reported losing online export sales because they were unable to accept payments from foreign customers. In other words, these sellers couldn’t accept payments the way buyers wished to pay.
But which payment system should they adopt? Research finds that geopolitically distant countries are much less likely to interlink payment systems. In a world of rising geopolitical tensions, there is growing competition among payment systems that are backed by different governments vying for efficiency and supremacy.
Package Delivery
If you found what you were looking for, and managed to pay the seller, you might expect your cross-border e-commerce experience to end with the package at your doorstep.
But when the US suspended the “de minimis” rule that allowed imported items below a certain threshold to avoid customs duties, many shipping services across the world paused deliveries. They needed time to revamp their paperwork and payment processes. Small Etsy vendors based outside the US now have to re-evaluate their prices.
Customs proceduresand cross-border shipping remain a challenge, with the risk of delays and added costs. Customs clearance can be delayed if a seller fails to attach the right documentation. Not assigning the right code can be devasting for small sellers whose margins are slim.
Given the central role of customs procedures in e-commerce, geopolitical tensions can incentivize governments to use administrative policies in blunting the competitiveness of products from certain countries. Ask Dutch farmers, who are major producers of tulip bulbs. At one point, the Netherlands exported tulip bulbs to almost every major country in the world except Japan. As it turned out, Japanese customs officials took particular interest in Dutch tulips. Perhaps hoping to shore up their own domestic producers – Japanese farmers were once major tulip growers themselves – customs officials insisted on checking every single bulb by cutting it vertically down the middle. Even Japanese ingenuity couldn’t stitch them back together and bring them to market.
Srividya Jandhyala is a Professor of Management at ESSEC Business School. She is the author of The Great Disruption: How Geopolitics is Changing Companies, Managers, and Work.
This article originally appeared in the Cross-Border/Global 2025 Issue.
