Shein Sees 13% Profit Dip in 2024 Despite Sales Surging to $37 Billion

Shein is being hit by costs. The Asian ecommerce giant has closed its last full fiscal year with an increase in costs, even before the entry into force of tariffs or the end of de minimis, which has weighed down its profit. Despite having sold more, the Singapore-based company has reduced pre-tax profit to 13% in 2024.

According to the group’s latest accounts, reported by The Guardian, Shein’s parent company closed 2024 with a turnover of $37 billion, up 20% on the previous year. Pre-tax profit, however, has not progressed in parallel, and stood at $1.3 billion at year-end, compared to the $1.5 billion it earned in 2023.

This drop was mainly due to higher costs in a period (2024) when the U.S. tariffs on China had not yet come into force, which increased the companies’ operating costs. At the end of the year, the taxes paid by the group during the year remained stable at around $188 million, although the item includes 6.1 million as “deferred taxes related to previous years”, explains the same media.

Shein sold $37 billion in 2024, up 20%

The company further admits that changes in U.S. trade policy have “increased the level of uncertainty in the global economy.“ “Evolving trade policies continue to elevate the complexity of operating for businesses, which could affect the group’s economic position and operations,“ the company explains.

The main tariff hit on Shein’s business, therefore, is expected to be in the United States, both from increased tariffs and the end of the de minimis tax exemption, which allowed it to export its products to the country without being subject to customs costs. Since the end of August, however, the United States eliminated this loophole, which has led it to post a drop in sales of up to 8% in the country in one month, according to data published last week by Bloomberg.

The drop in Shein’s pre-tax profits also comes at a time when the company appears to have slowed its efforts to become a publicly traded company, leading it to become more transparent in certain parts of the business. The constant refusals received from both the Chinese regulatory authorities and those of other countries such as the United States have dragged out the process for more than two years.