Shein requests an extension to answer to the EU Commission

Shein requested an extension to answer the EU Commission requisition to present evidence that it is taking measures against selling illegal products in the European Union. According to the Commission's Digital Technology spokesman, Thomas Regnier, Brussels accepted its request due to its “very constructive attitude” in the investigation.

The underlying problem is serious: the many potentially dangerous illegal products entering the EU have increased considerably.

A recent report by the European Commission revealed that 4.6 billion illegal products were bought in the region in 2024, 91% of which came from China. This growth has led European authorities to tighten regulations and propose the elimination of the tariff exemption for shipments of less than 150 euros, which would directly impact platforms such as Shein and Temu.

Financial problems for Shein? 

As if that were not enough, Shein faces not only regulatory challenges, but also financial ones. According to the Financial Times, in 2024 the company experienced a 40% drop in its net profit, falling to $1 billion. Although its annual sales increased by 19%, reaching 38 billion dollars, these figures are below expectations.

According to the British media, much of this decline is due to a complicated quarter and the rise of its competitor Temu, whose popularity has grown significantly in key markets, including Spain.

Meanwhile, Shein has seen its estimated valuation reduced to $50 billion, 25% less than the $66 billion achieved in its last round of funding in 2023. This drop reflects uncertainty about its business model and the impact of new trade barriers.

Trump Tariffs War Impact 

Another major blow comes from the US, where the Donald Trump administration has announced the end of the tariff exemption for low-value products. Until now, Shein and Temu had benefited from this rule, which allowed them to import items for less than $800 without paying taxes. However, with the new regulations, analysts predict that both platforms will have to raise prices, which could affect their competitiveness.

In this context, the CEO of Shein, Donald Tang, has tried to reassure investors, assuring them that the company remains firm and committed to offering accessible fashion. However, the expected initial public offering in the United Kingdom, which many consider key to its expansion, could be delayed until the second half of 2025.

Between stricter regulations, game-changing developments and competitive pressure, Shein is facing one of the biggest challenges in its history. The question is: will it be able to maintain its dominance in ultra-fast fashion without losing its low-price essence?