Shein faces growing European scrutiny despite rapid growth

Shein's European user base grew to an average of 156 million monthly users by year-end, positioning it as one of Europe's leading e-commerce platforms alongside AliExpress and Amazon. The Chinese fast-fashion retailer's rapid expansion has drawn scrutiny from European officials concerned about social and environmental implications of its business practices. Probes, fines, and debates have tempered Shein's popularity among millions of customers in a crucial market for the company.

In November 2023, Shein opened its first physical store in Paris' prestigious BHV department store, an endeavor met with both excitement and protests from concerned citizens. French consumer protection authorities uncovered a scandal involving childlike sex dolls for sale on Shein's platform, prompting the European Commission to investigate the online retailer under the Digital Services Act. The EU inquiry, launched in February 2026, examined the sale of illicit goods and alleged addictive designs by Shein.

French regulators imposed fines exceeding €22 million (US$25 million) on Shein in June 2025, citing issues with product traceability, environmental labeling, and delivery times. The following month, EU authorities halted the sales of items featuring crocodile logos, deeming them counterfeits of France's iconic Lacoste brand. Shein had paid over €210 million in fines across France, while Italy also imposed penalties for misleading environmental claims.

Despite the regulatory challenges, Shein's valuation surged to US$1.7 billion upon its initial public offering (IPO) on October 23, 2023, aiming to fuel its international growth. However, the retailer's Paris flagship store was abruptly closed by its new owners in June 2024, labeling the decision a "strategic error." European authorities imposed a €3 duty per item for parcels valued under €150, similar to a US Trump-era duty targeting Chinese e-commerce products.

As online parcels from China and other non-EU countries entered the bloc at a record 5.88 billion units since 2022, the EU planned to introduce a handling fee for such shipments in November 2025.