The e-commerce market is currently undergoing a clear shift: international e-commerce players are gaining market share, while small and mid-size operators, especially those in commoditised marketplaces, are being squeezed.
The shift is not only happening across Europe, including in major economies like Germany, but also in Southeast Asia.
The latest report on Germany’s e-commerce market highlights that the median online revenue of small stores earning below 50,000 euros has dipped by 12.3 per cent, while bigger ones topping 1 million euros in annual revenue are growing at 7.6%.
The trend reflects a clear consolidation in the market where commoditised products are being pushed away by fiercely price-competitive platforms with international presence, specifically Chinese e-commerce players like Alibaba, Temu, Shein, and TikTok Shop.
“German e-commerce is not shrinking: it is reorganising. Those who differentiate through quality, specialisation, and customer proximity can still grow,” says Julian Craemer, CEO & co-founder of uptain, whose latest report tracks the German e-commerce market landscape in 2026.
Germany’s E-commerce Consolidation
Uptain’s study, based on data from over 3,000 operators who command around 30 million users across Germany, shows the country’s median online sales have fallen 22% since 2023, from 14,510 euros to 11,305 euros.
A consolidation phase has started in the e-commerce space, with larger international players gaining more market share. While the overall sales are dipping across Germany, the order values are rising, from 76 euros in 2024 to 83 euros in 2025, primarily due to higher inflation.
The shift is being seen in other places as well. In France, another big Western European country, the e-commerce sector has generated total revenue worth 196.4 billion euros, but the average basket value in the country dropped 3% to 62 euros due to pressure on prices. The decline affected both products (-4%) and the services sector (-3%).
The situation is no better in the UK either. The young demographic in Britain has been affected the most due to geopolitical tensions, which are stopping them from trying new brands and products.
Small Brand Owners Are Feeling The Pressure
The first quarter of 2026 has been brutal, a lot of small and indie operators claim on Reddit. For some small operators and solopreneurs, the first quarter was down 30% compared to last year, while ad expenses have dramatically increased.
Primary reasons are post-holiday drag, rising ad costs, global uncertainty, and high inflation, forcing people to curb their discretionary spending. Algorithm changes in key social media platforms, TikTok or Meta, have led to fewer people seeing your ads, which clearly translates to fewer conversions.
To add to the woes, social reach, which used to be one of the biggest revenue generators for brands, has turned less predictable than before. Brands with deep pockets, especially Chinese companies, are expanding rapidly across all growing economies like Indonesia, Malaysia, Vietnam, and Singapore.
Chinese companies, led by the likes of Alibaba, ByteDance’s TikTok Shop, PDD’s Temu, and Shein, are fast spreading beyond China.
How Chinese E-commerce Giants Are Reshaping Global E-commerce
The Chinese e-commerce market is the biggest in the world, commanding $2.32 trillion in gross merchandise volume (GMV), twice that of the US, making it a case study for other emerging and mature markets.
Chinese e-commerce brands, the likes of Shein, Temu and a handful of other brands, are currently dominating half of the world’s e-commerce market, primarily in Asian countries like Indonesia, Thailand, and the Philippines.
After winning home markets with rapid innovation and speedy logistics solutions, Chinese giants Alibaba and PDD are now directly competing with Amazon across territories outside China and the US. Their highly popular shopping festivals like Singles’ Day and Black Friday sales are raking in big numbers in emerging markets like India and Indonesia.
Why Small Brand Owners Must Rethink Growth In 2026
China, the US, and Western Europe are the largest contributors to global e-commerce. Sales from these three regions totalled over $5.17 trillion in 2025.
If you are a small brand owner, there are three key reasons your business is suffering in 2026. First, inflated baseline demand. If you are benchmarking your current numbers with post-COVID growth, it was pent-up demand, and people splurged on discretionary items after being stuck inside for months.
That post-pandemic earning spike eventually settled in the next three years over rising geopolitical tensions and high inflation, so brands expecting similar success may not be able to replicate it.
The second reason is a steady rise of 30-50% in customer acquisition cost (CAC) on Meta and Google ad spend. It’s killing your margins even when revenue may remain steady.
The third is the China effect: a host of Chinese brands, like Temu and Shein, have reset buyer expectations across mass markets. If you are competing in these markets, your only shot is to win through authenticity rather than playing the volume and margin game.
The current global scenario seems bleak; despite this, the projections on the e-commerce industry are positive. Shopify’s 2026 report on global ecommerce sales shows sales could hit $6.4 trillion by the end of 2026, a new benchmark, and $7.89 trillion in 2028.
The e-commerce market share in the overall retail space is increasing every year. The industry is supposed to hit 58.1% penetration by 2030, with the number of users estimated to rise to 4.1 billion. These are encouraging numbers to see, even if you are a small business owner.
