Shein is being targeted by Europe, which wants to fight in any possible way against the advance of the Chinese super fast fashion giant. During the last few months, the charges multiplied. We will try to sort things up, by analyzing them one after another
by Massimiliano Viti
As stated by the Financial Times, Shein would close 2024 at 36,3 billion euros (+19% over 2023 but below expectations of 43 billion), on the levels of Inditex-Zara. The net profit amounted to 955 millions (-40% over 2023). But the theme that mainly characterizes the recent events is not related to financial statements, as much as it is to the charges and the attacks it is subjected to in Europe. Here they are: one after another.
Violation of European consumer protection
CPC Network is the Consumer Protection Cooperation Network. It is composed of the national authorities for consumer protection and the European Commission. It carried out an investigation coordinated by the Commission and led by the authorities of Belgium, France, Ireland and the Netherlands. Among the organizations that attempted to raise the awareness of European authorities about Shein’s modus operandi there is CEC, the European Footwear Confederation. The investigation has acknowledged various irregularities that violate EU consumer protection legislation.
For instance, fake discounts; sales with false purchase deadlines; missing, incorrect or deceptive information; misleading price tags of products; greenwashing with deceiving statements on sustainability. The formal charge is set on May 26th 2025. Shein will have to respond and propose commitments to address the violations that were identified. It is fundamental to remember how this action integrates the current investigation on Digital Services Act (DSA). They both aim to guarantee a safe and trustworthy online environment in which the European consumer rights are completely protected (source Apiccaps).
Shein causes addiction
On June 5th BEUC (Bureau Européen des Unions de Consommateurs), with 25 members coming from 21 countries, presented to CPC Network a warning against Shein. The object: numerous examples of dark pattern. In other words, all the misleading techniques that push the consumer to purchase a product, even by bending his will. Among them there is the so-called confirm shaming, which aims to generate a sense of guilt in the consumer that decides not to buy. The general manager of BEUC, AgustÍn Reyna, has stated that “Shein has been designed to cause addiction. It is led by powerful algorithms which maximize consumer engagement and overspending” (source: BEUC).
Increase of co2 emissions
According to Shein’s sustainability report, carbon emissions related to the transport of products have increased by 13,7% during 2024 compared to 2023. In other words, they are more than three times the size of Inditex-Zara’s and they are nearly the equivalent of 2 million gasoline vehicles driven for a year. According to an analysis carried out by Stand Earth, the Asian company has, in fact, increased its indirect emissions by more than 170%. “If Shein was a country – as highlighted by the report – it would emit the same amount of greenhouse gases that are emitted in Lebanon” (source Fashion Network and Earth).
The quotation dilemma
Shein in 2022 has transferred its headquarters from China to Singapore, while its supply chains and its warehouses still remain mainly located in China. Already in January 2022 there was news that it had resumed plans to list in New York. But only during November 2023 it filed the documents needed to do so, encountering resistance due to the charges of forced labour. So, the decision was to try the London Stock Exchange. But, even in this case, Shein had to face accusations on its opaque supply chain and on cotton provision.
Based on the charges, Shein takes advantage of cotton from China’s Xinjiang region, where the Uighurs are exploited. Beijing denies this. Now, Shein seems to have left even London to reach Hong Kong where, according to the analysts, it will be able to avoid the strict control of the investors. “The quotation in Hong Kong would probably avoid even the protests and the political resistance that it could encounter in the United Kingdom”, as stated by Craig Coben of Bank of America (sources Reuters and Marketscreener).
Allegations of customs fraud
Another heavy accusation comes from the United Kingdom. According to The Telegraph, the Chinese company has been sued by the High Court of Justice over allegations of “manipulating customs declarations for VAT evasion purposes”. The complaint was filed by the customs agency IT Way Transgroup Clearance (agent for Shein between 2021 and 2024) and Orange Transgroup. They demand a damage compensation that adds up to 5,8 million pounds. A Shein’s spokesperson has confirmed to Retail Gazette that the allegations were “totally unfounded” (source Fashion Network).
The French Fast Fashion Act
The bill titled Fast Fashion Act was approved by the French Senate on June 10th. During this period the regulation has become more and more permissive, leaving out players of the sector of the caliber of H&M, Primark and Inditex-Zara. The aim of the law, according to its writers, is to protect the environment and commerce. Starting from June 23rd 2025 deputies and senators have formed a joint committee in order to analyse the text and to formulate eventual remarks, so the lobbying activity is very strong. The bill proposes a tax on small packages sent from extra-EU countries, which goes from 2 to 4 euros a package. There are penalties based on the “environmental costs” related to overproduction.
But an interesting aspect is that the text will provide a definition of “fast fashion”, with criteria based on production volumes, renewal speed of collection, “lifespan” of products and “low incentive” on their restoration. Some of the measures listed in the law, such as the total ban on advertising on ultra-fast fashion platforms, will have to be approved by the European Commission. Even if Shein is actually registered in Singapore, its central European headquarters located in Ireland could represent a legal loophole (source Le Figaro).
Shein’s answer
Shein states that its business model allows it to produce based on demand and to have less unsold stocks compared to the traditional clothing resellers, with the aim of minimizing waste. The company supplies itself for the major part of its products from 7.000 suppliers in China, but also in Brazil and Turkey. The latest move is to expand the Indian supplier base from 150 to 1.000 within a year. Shein has a valuable ally, Reliance Retail, which owns the brand license in India. Reliance is led by Mukesh Ambani, Asia’s richest man. In France, the counteroffensive is expressed by the slogan “La mode est un droit, pas un privilège” (“Fashion is a right, not a privilege”).
“At the end, we find ourselves with a law that is not only anti-Shein, but anti-customer of Shein”, as declared to AFP by Quentin Ruffati, Shein’s spokesperson in France. “This law, if approved, will directly affect the wallets of our customers and will drastically decrease their purchasing power”. The company has also accused the French fashion establishment of protecting the historical brands and states that it will continue to put pressure in order to further modify the draft law (sources Valori and WWD).
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