China small parcels surge in value has triggered a storm of debate in the UK, with retailers warning of unfair competition and authorities under pressure to plug what critics call a dangerous loophole.
According to newly released figures, the value of low-value packages arriving from China into the UK skyrocketed from £1.3bn in 2023-24 to around £3bn in the most recent financial year. This dramatic jump highlights how global e-commerce platforms like Shein and Temu are transforming the retail landscape, while raising serious concerns about taxation, consumer safety, and the future of Britain’s high streets.
China Small Parcels Surge: What the Numbers Reveal
Official HMRC data obtained through a Freedom of Information request shows that 51% of all low-value parcels imported into the UK last year came from China, up from just 35% the year before.
These parcels, each worth £135 or less, are currently exempt from customs duties under existing government rules. While the exemption was initially designed to reduce red tape on smaller purchases, critics now say it has created an uneven playing field where foreign sellers can undercut UK businesses.
Industry experts believe China small parcels surge is being driven largely by Shein and Temu’s aggressive expansion in the British market. These platforms specialize in selling fast fashion, homeware, toys, and electronics at bargain-basement prices, often cheaper than domestic retailers can source or produce.
Why UK Retailers Feel Under Threat
For many British retailers, this surge in untaxed imports feels like a ticking time bomb.
Katerina Buchy, director of Sheffield-based wholesaler Ancient Wisdom, told the BBC that her company is struggling to compete. “It’s affecting our customers as well. They know their clients can get the same products cheaper online, so they’re ordering less from us,” she explained.
Her frustration also extends to taxation. “We pay taxes, we employ more than 100 people. How much revenue is the government losing by letting this continue?” Buchy asked.
Industry groups such as the British Retail Consortium (BRC) have echoed these concerns, calling the China small parcels surge a “significant and growing threat” to investment in UK high streets.
Global Platforms, Local Consequences
Temu and Shein have exploded in popularity across the UK. Their formula is simple: trendy, ultra-cheap goods delivered directly to consumers, often shipped from warehouses in China or nearby hubs.
Shein, founded in China but now headquartered in Singapore, reported record profits last year. It has attempted to list on both the London and New York stock exchanges, though with limited success so far.
Temu, meanwhile, has announced that at least half of its UK platform sellers will be based domestically by the end of this year, a move the company says will support small businesses and create a “low-cost channel to reach new customers.”
Yet, critics argue that despite these promises, the China small parcels surge still leaves UK retailers fighting an uphill battle against heavily subsidized international competition.
Consumer Risks and Safety Concerns
Beyond the economic impact, consumer safety is also at stake. Low-value imports often bypass the stricter customs checks applied to higher-value goods, raising fears of unsafe or counterfeit products entering UK homes.
Retail analyst Natalie Berg of NBK Retail warned: “This loophole needs to be closed. But any change must be carefully balanced so it doesn’t unfairly harm lower-income shoppers who rely on cheap goods, or small businesses that also use this exemption.”
Government Response and Ongoing Review
The UK Treasury announced in April that it is reviewing rules around low-value imports, following intense lobbying from major retailers including Next and Sainsbury’s.
Treasury spokespersons have said Chancellor Rachel Reeves’ review will be published “in due course.” Meanwhile, officials stress that Britain remains a “pro-business government” committed to protecting high streets and encouraging growth through measures like permanent business rates relief and the lowest corporation tax in the G7.
Other regions are already acting more decisively.
- The United States recently ended its de minimis rule for Chinese imports, expanding tariff requirements globally.
- The European Union announced a flat €2 fee on small packages worth €150 or less.
This international shift adds further pressure on the UK government to address the China small parcels surge without delay.
What Happens Next?
For now, the surge continues. HMRC recorded around 281,000 customs declarations for low-value imports from China in 2024-25, representing roughly 12% of the total. The true number of items, however, is much higher, since multiple goods can be grouped under a single declaration.
The question remains: can Britain strike a balance between protecting its retailers, ensuring consumer safety, and keeping online shopping affordable for millions?
The debate around the China small parcels surge is far from over. With billions at stake, the outcome will shape the future of UK retail for years to come.
