Marketplace Briefing: Tariff turmoil spurs online merchants to look abroad
This is the latest installment of the Marketplace Briefing, a weekly Modern Retail+ column about the ever-changing e-commerce marketplace landscape. More from the series →
As U.S. tariffs on imports continue to squeeze margins, a growing number of online merchants, including Amazon sellers, are turning to international marketplaces to diversify revenue streams and reduce risk.
At Pattern, an e-commerce accelerator with hundreds of brand clients, international expansion requests from brands have risen 47% since tariffs were announced earlier this year, according to the company’s chief international officer, Brett Bardsley. He said the trend picked up after the latest tariff hikes were announced.
“Brands started [asking], ‘Where do we need to sell elsewhere for us to be able to avoid the headwinds and also future-proof our business?’” Bardsley told Modern Retail in an interview.
Amazon itself has encouraged sellers to consider Europe as a tariff workaround. As Modern Retail previously reported, one email sent from Amazon to online merchants prompted the company’s European marketplaces as an alternative for U.S.-based sellers impacted by tariffs. The email touted Europe’s projected $900 billion e-commerce market by 2028 and offered potential launch incentives and fee credits.
Mustafa Kothawala, who sells home and kitchen goods through his business Simpli-Magic, said his company is among those taking up the offer. “Amazon Europe reached out to us to become a vendor there in the European Union,” Kothawala said. “We’re in negotiations with them to get onboarded there.” Kothawala added that tariffs “definitely [have] something to do with it,” when it comes to the decision to diversify internationally.
These international expansions are unfolding as key trade negotiations and tariff decisions continue to shake out. On Wednesday, President Trump announced via Truth Social that the U.S. had reached a trade deal with Vietnam ahead of the July 9 deadline when his “reciprocal” tariffs resume. Meanwhile, the E.U. has reportedly agreed to accept a 10% duty on many of its exports, while seeking lower rates on automobiles, steel and aluminum. China is on a separate timeline, with its 90-day tariff pause running until mid-August, though the two sides have already reached a limited deal.
For U.S.-based brands, Bardsley said Amazon’s international marketplaces are the “lowest hanging fruit” for global expansion because of sellers’ existing familiarity with the platform. But companies are also looking beyond Amazon.
“For Europe, you’ve got Amazon, but then you have country marketplaces that are quite powerful,” Bardsley said, citing bol.com in the Netherlands and local marketplaces in Poland. In Asia, he noted, brands are eyeing platforms like Coupang in Korea and Tmall in China.
Adam Wilkens, founder of Amazon consultancy Dotcom Reps, which advises about 30 clients, confirmed that more sellers are eyeing global markets — though many are finding the process harder than expected.
“They thought it would be simpler,” Wilkens said. “They start to realize that there are a lot of moving parts — the compliance and language barriers.”
Wilkens said about 10% of his clients have successfully expanded to Europe so far, with two others currently in the process. Popular destinations include the “big five” Amazon markets: the U.K., Germany, France, Italy and Spain.
Monil Kothari, founder of the New York City-based fine jewelry brand Haus of Brilliance, is another brand charting a global course for his business. The company already has a foothold beyond U.S. borders, selling in Canada through retail partners like TSC (formerly The Shopping Channel). Haus of Brilliance also sells to Canadian and Mexican customers through Canada Amazon’s North American Remote Fulfillment (NARF) program.
But looking ahead, the company’s international expansion plans are focused on markets where jewelry preferences and standards align with U.S. tastes, namely the E.U., the U.K. and Australia, Kothari said. The company is exploring partnerships with major international marketplaces like Debenhams in the U.K. and Zalando in Europe.
Meanwhile, Chinese exporters — who have been especially hard hit by tariffs — are accelerating their own international expansion efforts. Kashif Zafar, CEO of e-commerce ad firm Xnurta, said more than half of the 4,000 China-based sellers his firm works with are actively exploring new markets. Many of them do significant business in the U.S. market.
“The name of the game is really diversification,” Zafar said. “Many of these Chinese brands are looking to expand.” He added that Europe, in particular, is a region of interest for Chinese sellers.
As Modern Retail previously reported, Chinese merchants are also increasingly turning to emerging markets like Africa. Jumia — Africa’s largest e-commerce platform — now counts about 12,000 international sellers, most of them from China. That segment is growing 60% year-over-year as Chinese exporters seek growth beyond the tariff-heavy U.S. market.
Chinese platforms like Temu and Shein are also seeing surging sales across Europe. Temu’s year-over-year sales growth in the E.U. surged more than 60% in early May, with France leading at nearly 100% growth, according to Consumer Edge Research. Shein’s growth in the U.K. hovers around 50% as both companies ramp up ad spending in Europe while pulling back in the U.S.
Still, sellers face plenty of hurdles. Wilkens noted that VAT registration alone can take eight to 12 weeks in Europe.
Despite these challenges, the urgency to diversify appears to be outweighing the obstacles for some sellers. As Kothawala put it, “The world is more than the United States. The business is everywhere, not just here.”
What I’m reading
- The Information reported that Temu has resumed digital ad spending in the U.S., ramping up Meta and Google ads after slashing campaigns in April.
- Online retail growth slowed to its weakest in over a decade in early 2025, with tariffs cited as a key drag on e-commerce volume and consumer demand, per CNBC.
- Walmart is embracing the “Summerween” trend, launching “Summer Frights” Halloween sections in around 1,000 U.S. stores, according to Axios.