The Trials of 2025: Shein’s Pivotal Year in the Fashion Industry

A failed IPO, the opposition of an entire National Assembly in France and, above all, the repeal of the tax exemption that allowed tax-free shipments to the United States and the European Union. Shein has lived a particular annus horribilis in 2025 in which scandals such as those caused by the sale of sex dolls that look like children or by accusations of plagiarism have not been lacking. To top it all off, in October a drop in the company’s profit for the 2024 financial year came to light.

France has led the political opposition to the Shein and Temu model in 2025, with a bill aimed at limiting the activity of these companies in the country. After its approval by the National Assembly, in June the French Senate almost unanimously ratified the document that seeks to limit the placing on the market of new garments, with penalties of between seven euros per product and ten euros per product in the coming years.

Italy joined the French initiative months later. Parliament began debating in October the Italian version of the anti-Shein law, which also aims to regulate and limit the activity of large Asian operators that “are invading the European market with clothing, footwear and accessories of low quality and a short shelf life”.

These legislative initiatives come on top of many other legal setbacks and reprimands by European and U.S. authorities. In September, for example, France’s Commission Nationale de l’Informatique et des Libertés (Cnil) fined Shein €150 million for improper use of cookies, which came on top of another €40 million penalty from the French competition authority for misleading discounts. In the United Kingdom, the British customs company IT Way Transgroup Clearance accused Shein of having manipulated customs declarations in order to avoid paying VAT on the products it brought into the United Kingdom.

In May, the European Commission’s Consumer Protection Cooperation Network (CPC) said that Shein “infringes legislation” through false discounts, sales under pressure and “incorrect and misleading” information, threatening the operator with sanctions.

Shein has applied to list on the Hong Kong Stock Exchange after Chinese authorities vetoed its London listing

In October, on the verge of a rocky opening of its first permanent store in Paris, Shein faced another scandal that led in November to the French Ministry of Economy requesting the suspension of its activity in the country for a minimum period of three months, as well as its eventual reopening under strict conditions. The trigger for this request was the detection on the platform of the sale of child-like sex dolls and weapons classified in category A, the highest level of danger, just a few weeks earlier.

Tariffs and de minimis

The tax has been another critical front for Shein in 2025. Tariffs imposed by Donald Trump on products from China forced the platform to raise prices in the U.S., with an immediate impact on sales: by June, the company had already lost 12% of users in the country.

In August, another blow came in the company’s main market with the repeal of the de minimis law, which allowed any U.S. consumer to receive international purchases without paying taxes, as long as the value of the package did not exceed $800. In September, Shein’s sales fell 8% in the United States.

These measures will soon be mirrored in the European Union. In December, the EU Council approved the application of a fixed tariff of three euros to small-value packages of less than 150 euros brought into the EU bloc via e-commerce. The measure will come into force on July 1, 2026.

The decision of the European authorities responds to concerns about the “unfair competition” faced by European sellers against goods that currently enter duty-free. They point to “health and safety risks” for consumers, “high levels of fraud” and the “environmental impacts associated” with this type of product.

The so-called French anti-Shein law, whose draft received the almost unanimous backing of the Senate, aims to charge up to €10 for each product sold by the group

The measure is temporary and will be in place until the final agreement to completely eliminate the tariff exemption threshold for packages under €150 comes into force. Once implemented, all goods under that value will be subject to normal EU tariffs according to their category.

From London to Hong Kong

The Chinese group, but headquartered in Singapore, ends the financial year without fulfilling its claims to be listed on an international benchmark stock exchange. After it renounced the New York Stock Exchange in 2024, and despite opposition from the British Parliament, in April the British Financial Conduct Authority (FCA) authorized Shein to list in London.

With the British yes in hand, in May came a new setback in Shein’s tumultuous IPO process: the China Securities and Exchange Regulatory Commission (CSRC) denied the company’s application to list in London. In a new twist, in July Shein filed for an initial public offering to list on the Hong Kong Stock Exchange, but still negotiating with British and Chinese authorities to smooth its London listing.

The Asian fashion e-commerce firm’s results have also not been in line: the company reduced its pre-tax profit by 13% in 2024, to $1.3 billion, despite having raised its turnover by 20%, to $37 billion.