Navigating EU Tax Reform: Leveraging Local Overseas Warehouses to Tap into About You's Blue Ocean in Europe

[Ebrun Exclusive] Against the backdrop of turbulent U.S. tariff policies in 2025, cross-border merchants are increasingly turning their attention to Europe—a relatively more stable and promising market.

However, Europe is not immune to upheaval: the EU has announced it will abolish the tax exemption for low-value parcels two years ahead of schedule in 2026, undoubtedly adding uncertainty to this "safe haven" and posing significant challenges to the low-cost small parcel direct mail model. Yet, waves of change often brew new opportunities. Tighter policies signal the ebbing of the era of rapid expansion driven by traffic and low prices. The future belongs to merchants who can genuinely localize, respond agilely to the market, and prioritize the shopping experience. Therefore, proactively establishing a presence on local platforms and utilizing local overseas warehouses is an inevitable choice to adapt to the adjustment of tax exemption policies. This approach also greatly helps enhance fulfillment efficiency, reduce logistics uncertainty, and improve the shopping experience. In this context, OTTO China, in partnership with the European personalized fashion e-commerce giant About You, offers Chinese sellers a "golden track" to the European local market.

About You, a native European personalized fashion e-commerce platform, operates in 26 countries, boasts over 12 million active users and numerous well-known brands. Leveraging its "social + personalized recommendation" discovery-based e-commerce model, it ranked among the top 10 most popular e-commerce platforms in Germany in 2024, making it one of the few fashion vertical platforms on the list. (Source: Germany: Top online stores 2024 | Statista)

In 2025, About You commenced its merchant recruitment drive in China, opening entry channels for merchants in footwear, apparel, and accessories categories, providing an excellent opportunity for brands intending to establish a solid foothold in Europe. Making the first move before policy changes is key to navigating cycles and winning at the next starting line.

01

Imminent End of EU Low-Value Tax Exemption, Overseas Warehouse Model Outshines Small Parcel Direct Mail

In August 2025, the U.S. eliminated tariff exemptions for small imported parcels under $800 from all countries, raising EU concerns about a potential influx of small parcels. By November, the EU's decision to scrap its tax exemption policy was also finalized.

On November 13, the EU decided to abolish the tariff exemption for small imported parcels valued below ?150 starting in 2026, moving quickly to impose tariffs on such parcels.

Additionally, the EU will introduce a ?2 handling fee per package to cover customs clearance and inspection costs, while strengthening customs scrutiny through a digitalized customs system.

Data shows that in 2024, 4.6 billion small parcels entered the EU, approximately 91% of which originated from China, with Chinese cross-border e-commerce platforms being the primary source. Once the policy is abolished, it will be a significant blow to cross-border merchants reliant on small parcel direct mail.

The most direct impact is that changes in tariff policies will lead to substantial cost increases for small parcel direct mail merchants, forcing price hikes that could likely halve conversion rates and profit margins.

Simultaneously, compliance requirements will become more stringent. With more parcels entering regular customs clearance and inspection queues, merchants will face higher risks of audits, fines, and customs delays.

Against the global trend of tightening or even eliminating tax exemption policies, the small parcel direct mail model is no longer the preferred choice for cross-border e-commerce. The overseas warehouse model is gradually becoming mainstream.

Data indicates that in the cross-border e-commerce logistics sector, the application of the overseas warehouse model continues to expand: its share grew rapidly from 45% in 2023 to 52% in 2024. According to LogResearch (based on Frost & Sullivan data), this proportion is expected to jump to 58% by 2027, representing a 13 percentage point leap from 2023.

For cross-border merchants, stocking goods in overseas warehouses can reduce per-unit customs clearance costs through bulk imports. Furthermore, shipping from local warehouses significantly improves fulfillment speed and conversion rates. Additionally, the overseas warehouse model enables local returns and exchanges, greatly enhancing the consumer shopping experience.

As the EU tax exemption policy enters its final countdown, proactively establishing a presence on local platforms and utilizing local overseas warehouses has become a key strategic choice for cross-border sellers to seize market opportunities and rebuild their competitiveness.

In this context, About You, a personalized fashion e-commerce platform deeply rooted in the European market, serves as an ideal vehicle for implementing this strategy, offering sellers aspiring to expand into Europe an unmissable opportunity.

02

Revenue Soars 84-Fold in a Decade, About You Reshapes Fashion Consumption Decision-Making with "Discovery E-commerce"

About You can be considered a native European established platform, founded in Hamburg, Germany in 2014 and listed in Frankfurt in 2021.

The platform focuses on the fashion and apparel category, expanding its product range and variety through a hybrid model of self-operated and third-party sellers. It currently offers nearly 400,000 products from about 4,000 brands.

In terms of market coverage, after over a decade of development, its operations now span 26 European countries and regions. Starting from Germany's neighboring countries, About You has continuously expanded into broader European markets, achieving annual revenue of nearly ?1 billion in its core German-speaking markets (Germany, Austria, and Switzerland).

As About You specializes in the fashion sector, its core customer base consists of young, fashion-conscious female consumers. Data shows that over 80% of platform users are women, with more than 40% under 35 years old, precisely matching the demographic profile for fashion categories.

Financially, About You has seen remarkable growth. Over ten years since its founding, its revenue surged from ?23 million in the 2014-2015 fiscal year to over ?2 billion in the 2024-2025 fiscal year, an increase of approximately 84 times. (Source: Financial Publications)

Furthermore, About You has accumulated unique technological advantages in personalized recommendations. The platform generates customized product suggestions based on previous purchase history, brand choices, product preferences, and the purchasing likelihood of similar user groups. Notably, the "About You" logo even changes to "About [user's name]" after login.

More crucially, About You capitalizes on a key characteristic of fashion consumption—impulse buying. By integrating diverse formats like content marketing, visual storytelling, and live shopping, it allows young consumers to naturally "discover fashion" while "browsing digitally," facilitating unplanned purchase decisions.

Evolving from "buying fashion" and "searching for fashion" to "discovering fashion," About You has constructed a new fashion consumption path, redefining the decision-making journey for European consumers.

03

Seizing the European Market: Overcoming EU Tax Reform with Localized Operations

As the EU's tax exemption window is about to close, About You is opening its doors to Chinese merchants, providing entry channels and building a commercial bridge connecting local European channels with China's high-quality supply chain to help Chinese merchants smoothly expand their European operations.

In 2025, About You is opening its recruitment to third-party merchants for the first time. OTTO China, as its exclusive official recruitment channel in the Asia-Pacific region, will leverage the platform's market influence and professional operational support to select and assist high-quality local merchants in entering the mature, high-value European market.

Ebrun understands that this recruitment primarily targets quality merchants in categories like fashion footwear and apparel, including women's clothing, women's shoes, men's clothing, men's shoes, children's clothing, children's shoes, and accessories (excluding jewelry, sunglasses).

Currently, the platform has opened markets in seven countries—Germany, Austria, France, Italy, Netherlands, Belgium, and Denmark—for merchant entry, with plans to gradually expand to more European regions, providing continuous growth space for Chinese merchants.

In terms of operational model, About You currently primarily uses the merchant self-operated Marketplace FbS (Fulfilled by Seller) model, granting merchants significant operational flexibility. Merchants are responsible for product selection, pricing, and fulfillment, thus enjoying high flexibility in inventory management and choice of last-mile logistics providers. About You mainly provides core support such as platform traffic, brand exposure, and customer service, achieving mutual success through a commission model.

Additionally, the platform has recently launched and opened the Marketplace FbAY (Fulfilled by AboutYou) model to merchants. Under this model, sellers send products to the platform's official warehouses, and About You handles storage, packing, shipping, and other fulfillment processes.

To ensure operational efficiency and compliance, merchants applying to join must meet the following basic requirements:

1. Possess a company registered within the EU, providing a valid EU VAT number and LUCID registration number.

2. If choosing FbS, need to have local European warehouse storage and possess the capability to fulfill orders shipped locally.

3. Last-mile logistics must use About You officially certified delivery services (e.g., DHL, Hermes, etc.), ensuring order delivery within 72-96 hours.

The reform of the EU tax exemption policy will be a watershed moment for the development of the cross-border e-commerce industry. The development model reliant on cross-border direct mail small parcels is challenged, which will compel all overseas brands aspiring to deeply cultivate the European market long-term to accelerate their shift towards more profound localized operations.

Choosing to join About You is a proactive step in embracing this trend. Brands can not only leverage its localized service system but also accumulate user insights, enhance fulfillment experiences, and build brand recognition in real market scenarios, thereby taking root in the hearts of European consumers.

Therefore, joining About You is not merely a defensive move against policy changes but an aggressive strategy for achieving leapfrog development by leveraging OTTO China's localized resources. Under the professional guidance of OTTO China, Chinese merchants will no longer be mere "sellers" but genuine "operators" deeply rooted in Europe with brand premium.

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