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Shein is a Victim of its Own Success
— 3 mins read
Washington and Westminster end duty-free treatment for cheap parcels
Shein is seeking a valuation of $25 billion to $28 billion (c.£18 billion to c.£21 billion) for its Hong Kong stock market listing, Reuters reports. In 2022, investors valued the Chinese fast fashion firm at close to $100 billion (c.74 billion).
The collapse in value comes as governments in Washington and London scrap the customs breaks that made its £5 dresses possible.
The numbers behind the fall
Shein is still enormous. Its draft listing documents show more than 1 billion orders fulfilled and 273 million active customers worldwide. Revenue rose from $32.1 billion (c.£24 billion) in 2023 to $41.9 billion (c.£31 billion) last year.
But the growth has stalled. Revenue rose just 1.1% in the first quarter of this year, and the company recorded a $99 million (c.£73 million) quarterly loss. Net profit peaked at about $3.4 billion (c.£2.5 billion) in 2024 before falling to roughly $2 billion (c.£1.5 billion) last year.
'Institutional investors on the HKEX will zero in on the 2.9 per cent operating margin', said Winston Ma, executive director of the Global Public Investment Funds Forum, an NYU-affiliated body. Ma is a former managing director at China Investment Corporation, Beijing's sovereign wealth fund.
Washington closed the loophole and US sales fell 14%
For years, Shein shipped individual parcels straight from Chinese warehouses to front doors in London, Paris, and Los Angeles. Packages worth up to $800 (c.£589) entered America without duties under the so-called de minimis exemption.
Washington ended that exemption for Chinese shipments in 2025. Britain is going the same way. The government has decided to remove the £135 low-value import relief, with new arrangements due by March 2029 at the latest. High street retailers lobbied for the change, arguing the relief handed overseas rivals an unfair edge.
The days when rapid sales growth could overshadow the underlying economics of the model are coming to an end.
Shein will not pay those new duties. They will be added to the price of the parcels, and the British shoppers who spent an estimated £4.7 billion on these platforms last year will pick up the bill. The spending figure comes from research by Retail Economics and Barclays, a commercial research partnership, which found almost half of UK consumers had bought from such platforms.
Beaten in court by its own imitator
Shein lost a London copyright case against rival Temu on 13 August. The High Court rejected Shein's claims of copyright infringement over product photos and upheld Temu's counter-claim for damages over removed listings.
Shein has itself faced years of accusations that it copied designs from other brands and independent designers.
Child labour, Xinjiang cotton, and rising emissions
Shein disclosed two cases of child labour at its suppliers in 2024, after two cases the previous year. One of the children was around 11 or 12 years old. The company said it terminated the supplier relationships.
In January 2025, a Shein lawyer appearing before the Commons Business and Trade Committee declined to say whether the company uses cotton from Xinjiang, a region linked to allegations of forced labour. MPs accused her of 'wilful ignorance', The Guardian reported. Shein says it prohibits forced labour and audits its supply chain.
The company's transport emissions rose 13.7% in 2024, driven by heavy reliance on air freight.
RBC Capital Markets says Shein now threatens Primark and H&M more than Zara or Next, and is still gaining ground in Europe. Retail analyst Nick Found said Shein was 'unlikely to disappear from wardrobes any time soon'. But he warned that 'the days when rapid sales growth could overshadow the underlying economics of the model are coming to an end'.
