The head of the Estonian E-Commerce Association, Tõnu Väät, told ERR that ordering low-cost goods from Asia has increased by nearly 20 percent, with rapid growth occurring especially over the past year.

"In fact, this has largely grown with the arrival of Temu on the Estonian market," Väät said. "When people's purchasing power decreases and the economy cools down, it's always been the case that the size of shopping baskets shrinks, and people start buying cheaper goods. Over the past year, the average e-commerce shopping basket value has dropped by about 20 percent, even though the volume of packages has grown by 10-15 percent. People are simply ordering cheaper items."

In addition to Temu, there has been growth in orders from Aliexpress and eBay. Väät noted that Temu is one of the largest advertisers on Google and Meta platforms, not only in our region but globally.

"No matter what word you search for, both Google and Facebook almost immediately show some kind of Temu ad. They advertise very aggressively and sell very cheap goods, which is where the large volume comes from," he explained.

When Temu entered the market, there was international skepticism about its ability to compete with Aliexpress, but now it's no longer impossible to imagine that Temu could surpass Aliexpress at some point, and in some areas, it likely already has.

The popularity of Asian online stores has also impacted Estonian e-retailers, especially those selling a wide range of smaller gadgets. At the same time, both merchants and consumers have approached the E-Commerce Association with concerns that Temu is violating several laws in effect in the European Union. Väät pointed out that Temu frequently offers discounted prices but does not disclose the lowest price of the item within the past 30 days, as required by EU regulations. Problems may also arise regarding the warranty of goods purchased from Asia.

"Another issue is that when selling products within the EU, there are strict production and quality requirements, but it's difficult to control what comes in from Asia. If a product costs only a few euros, the material can't be of very high quality," Väät said.

During times of economic prosperity, 55 or even 60 percent of the money flowing through Estonian e-commerce stayed within the European Union, and around 40 percent went to third countries. However, according to Väät, the situation has now nearly reversed.

He emphasized that the growth in the volume of Asian goods cannot be blamed solely on Temu and rather reflects consumers' purchasing power. People's wallets have been hit by rising fuel and energy costs, as well as higher interest rates, and inflation has had its impact, which is quickly reflected in e-commerce.

At the same time, according to the head of the e-commerce association, Estonian entrepreneurs have few options to improve the situation. The issue lies in the economic environment, and the current state of affairs must be accepted.

"Ten years ago, it was a very common business model to order a large container of cheap goods from China, mark it up by 500 or 50 percent, and sell it. The era of such models, with small online stores that don't own their own inventory but order from China, is largely over," Väät believes.

The only option for Estonian merchants, according to him, is to highlight their competitive advantages: fast delivery, customer service in Estonian and convenient returns. These three pillars should be the focus for merchants. Väät also pointed out that the 14-day return policy applies only within the European Union.

According to Väät, a buyer who orders, for example, 100 hair ties for two euros from China, which are shipped here by boat, should ask themselves about the size of the carbon footprint, the labor used in production and the materials from which the product is made. Unfortunately, it's challenging to convey this message to consumers, but Väät noted that consumer awareness is gradually increasing.

Väät believes it's likely that some Estonian retailers will have to close their businesses. He pointed out that running an online store that sells thousands of different items becomes increasingly difficult as more competitors from Asia enter the market, especially because it's impossible to compete with such large advertising budgets. He said it's easier for those who specialize in certain product categories.

"This is the big downside of cross-border commerce – our agencies are pretty powerless when it comes to holding Asian merchants accountable," Väät said. "Estonian merchants are held to account and even harassed over all sorts of minor things, like minor regulation violations, but I'm sure that over the past year, neither the Data Protection Inspectorate nor the TTJA has approached Temu."

However, Väät believes that once the economy starts to improve, purchasing from Estonian retailers will also improve. That said, once people get used to ordering from Asia, habits change slowly, and part of the market will likely remain with Asia.

Consumer watchdog cannot solve problems with Chinese online stores

Kristina Tammaru, head of the consumer and business advisory department at the Consumer Protection and Technical Regulatory Authority (TTJA), said that they occasionally receive inquiries seeking advice on issues with products purchased from online stores in third countries.

"Unfortunately, when it comes to purchases made from third countries like the U.S. or China, neither TTJA nor the EU Consumer Centers Network can assist consumers. Generally, we explain the consumer's rights and options for resolving the issue, either directly with the seller or through legal authorities in the seller's country of origin," she explained.

The rules governing sales promotions in the European Union do not apply to third countries. According to Tammaru, this means that when ordering from such countries, consumers must exercise extra caution, as they do not have the same consumer rights as when ordering from merchants based in EU member states.

"When making e-purchases, it's advisable to pay by credit card, as this allows for the possibility of recovering the amount paid if the goods are not delivered, by initiating a chargeback process with the bank," Tammaru recommended.

Estonia also has an EU Consumer Center, but it provides advice and resolves cross-border complaints only for purchases made within the EU, as well as from Norway, the United Kingdom and Iceland.

The consumer protection watchdog advises shoppers to ensure that the seller's contact information is correct and easily accessible. If the website domain ends in .ee or the content is in Estonian, this does not necessarily mean that the business is based in Estonia.

It's not recommended to purchase from a website without prior experience or if it raises suspicions. Before buying, it's worth asking the seller for clarification on the terms of sale and the product's characteristics. Additionally, consumers should inquire about when and how payment is required and what additional service fees might apply.

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