AliExpress, more expensive than ever

In July, the new VAT regulations came into force at the European level that implements the IOSS (Import One Stop Shop). With this new law, it is necessary to pay VAT on any order we make to China; even if it is worth less than 22 euros. Until then, any order of lower value did not pay, and Asian sellers took advantage of it to declare a lower value on the product and thus avoid paying taxes. That changed in July, and it’s affecting stores in China.

Several stores have already closed after the new VAT law. Among them we have seen some such as Eglobalcentral, Buenabuy or Gearbest . The rest have strictly complied with the new VAT rule, where many already have warehouses in Europe to make shipments and thus be able to offer more competitive prices. Some directly, like Banggood , send all their products over 150 euros from Poland to the rest of the EU.

AliExpress, more expensive than ever

VAT is hurting AliExpress

AliExpress is a marketplace where a multitude of brands and stores can sell their products through the Internet. For this reason, many stores in China take advantage of the great reach that the page has, but now many are seeing how they sell less, and therefore reducing the income of AliExpress itself.

It does not help that, for example, some stores do not correctly declare VAT to the Treasury , and the user has to pay it twice and then claim the store. And with the payment of VAT, the low price of some products is no longer so attractive, and many users prefer to buy from Amazon or other stores with local shipping.

All of this is affecting AliExpress, whose revenues are falling . In the last year in which the company has presented accounts, AliExpress had a turnover of 1,363 million euros in Spain in the last fiscal year (until March 2020 ), but the figures are decreasing. Most orders in the store cost less than 150 euros, and all of those are being affected by the new VAT regulations.

Sales have fallen

The main attraction of buying in China is the low price, but with the price increase after the application of VAT , these price differences are reduced and even disappear. If we are unfortunate that the seller from whom we have bought does not declare VAT correctly, upon arrival in Spain they will charge us twice, in addition to the ADTPostales surcharge if we do not do the declaration process on the Correos website.

Thus, in the orders we make to China we may have to add a lot of money if we want to receive it at home, in addition to having to wait weeks for it to arrive. The VAT appears correctly broken down at the time of ordering, but the surcharges when it is received in Spain in the case of a bad declaration are not.

Spain is one of the three main markets of AliExpress, and the store defends that it will be able to continue offering competitive prices for the citizens of our country. However, it is going to be difficult because there are already many people who are having to pay double VAT and go through a tedious process that they would not have to do if they bought the products in the European Union.