Budget shopping platforms Temu and Shein, founded in China, are shifting focus to Europe as they face tariffs in the U.S. According to consumer trend data from Consumer Edge, their sales grew in May.
However, experts warn that these companies will meet familiar regulatory scrutiny in the region. Complaints have been filed against Temu and Shein in the EU accusing them of unsavory business tactics.
New Regulatory Measures
The European Union is preparing a new two-euro flat fee on previously customs-free small packages from online marketplaces like Temu and Shein. This move may be a sign of more pressures to come for these budget shopping platforms.
A French anti-fast fashion bill currently being debated by lawmakers aims specifically at ultra-cheap platforms such as Shein and Temu. The bill seeks to penalize fast-fashion products for their environmental impact.
Consumer Advocacy and Investigations
Consumer advocacy group BEUC has filed a complaint with Brussels against Chinese fast-fashion giant Shein over its use of deceptive techniques—often referred to as dark patterns—that lead to overconsumption. European Commission President Ursula von der Leyen has launched an investigation into whether Shein complies with EU rules governing unfair commercial practices.
"We urge you again today not just because we need your cooperation but also because consumers deserve better," von der Leyen stated after announcing the investigation into Shein’s compliance with EU laws. It remains unclear when a decision will be made regarding any potential legal breaches.
Company Responses
Shein did not respond immediately to requests for comment. The company stated last month that it had no plans to leave Europe despite facing criticism from some politicians regarding the conditions under which its cheap clothes are made.
Temu also did not respond immediately outside regular business hours. In response to concerns about working conditions at factories supplying its platform, Temu expressed its commitment "to ensuring all suppliers adhere" to international labor standards.
Sales Performance
Shein’s sales rose 14% year-over-year globally during May, while those at Pinduoduo-backed platform Temu jumped 23%, according to data released by Consumer Edge based on information from Kantar Worldpanel ComTech.
Both retailers have faced criticism over their business practices, including allegations of selling counterfeit goods or making false claims about the origins or materials used in their products.
In comparison, U.S.-based retailer Amazon.com Inc also saw global sales rise 10% year-over-year during May.
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