The RMB continues to appreciate, and this economic phenomenon is profoundly affecting the profits of cross-border e-commerce sellers.
It is generally believed that currency appreciation may bring positive economic signals, but for cross-border e-commerce sellers, if the RMB continues to appreciate, their profits will not rise, but may be significantly compressed.
Exchange rate changes are like “invisible scissors”, quietly cutting into the already limited profit margins of sellers.
Cross-border e-commerce sellers generally collect payments in US dollars and then convert them into RMB.
The appreciation of the RMB means that for the same amount of US dollars, you will receive less RMB after the exchange settlement, which results in direct exchange losses.
And this impact will be amplified. For industries with meager profits, for every 1% appreciation of the RMB, corporate profits may be compressed by 3% – 12%.
Taking the low value-added textile and toy industries as an example, their net profits are generally only between 3% and 5%. A small appreciation may cause profits to return to zero.
The RMB will appreciate by 4.4% throughout 2025, which has caused some export companies to suffer losses upon receiving orders.
This impact is not only reflected in the books, but also weakens the price competitiveness of goods in the international market.
The disguised “price increase” of goods priced in US dollars in the international market may cause orders to flow to lower-cost regions such as Southeast Asia.
Industry data shows that the average net profit margin of small and medium-sized cross-border e-commerce companies is usually between 5% and 10%. An exchange rate fluctuation of 3% to 5% is enough to eat up nearly half of the company’s profits.
However, many sellers lack protection against this. Data from the State Administration of Foreign Exchange shows that the corporate foreign exchange hedging ratio will increase to 30% in 2025, but 70% of overseas companies still have not effectively hedged exchange rate risks.
The business manager of a craft and gift company in Shanghai recalled his experience in 2025: “When the final payment was received and the exchange was settled about two months later, the RMB exchange rate had rapidly appreciated by more than 2.5% compared to before, and nearly half of the gross profit had been directly ‘eaten’!” Financial pressure and lack of professional knowledge are the main obstacles for small and medium-sized sellers to deal with exchange rate risks.
To apply for foreign exchange hedging, you need to pay a deposit or take up credit, and small and medium-sized sellers have tight cash flow; at the same time, many bosses say they “cannot understand” the complex financial instruments.
However, profits do not grow automatically but can be locked in through active management.
The most direct tool is foreign exchange hedging.
A luggage export company in Guangdong signed an agreement with a bank in early 2026 to lock in the annual settlement price of 70% of U.S. dollar payments in the range of 6.90-6.95, ensuring a bottom line of profits.
When a furniture company in Bazhou signed a large order with a Turkish customer, it used foreign exchange forward contracts in advance and successfully avoided an exchange loss of 5 million yuan.
Support is also being provided at the policy level, aiming to reduce corporate hedging costs.
A two-year fee reduction policy will be implemented in 2026 to guide banks to pass on the reduction dividends to enterprises.
Heilongjiang Province provides a 90% subsidy for the expenses incurred by growing foreign economic and trade enterprises in using financial instruments to manage exchange rate risks.
In addition, sellers can also seek breakthroughs from the business side, such as optimizing pricing, setting dynamic price adjustment rules for high unit price products, or using platform tools to lock in exchange rates; increase the added value of products, switching to products with design, technology or brand premiums, and enhance bargaining power to absorb cost pressure; diversify the market, explore emerging markets such as ASEAN and the Middle East, and reduce reliance on a single currency and market.
In the final analysis, how much profit can be “preserved” during the RMB appreciation cycle does not depend on the exchange rate trend, but on whether the seller incorporates exchange rate risk into daily management and takes active actions.
