Shein growth slows as US import tax crackdown hits
Shein has posted a 13% drop in profits despite another year of surging sales, as rising marketing costs and growing pressure from new US trade tax rules weigh on the fast fashion giant.
The Singapore-headquartered retailer reported pre-tax profits of $1.3 billion (£974 million) for 2024, down from $1.5 billion (£1.12 billion) the previous year, despite revenues climbing 20% to $37 billion (£27.7 billion), according to The Guardian. The dip in profitability marks a rare setback for the fast-fashion brand.
According to accounts, the hit came largely from higher selling and marketing costs as Shein ramped up efforts to defend its market share against rivals including Temu and H&M.
The results arrive at a pivotal moment for Shein, which is thought to be preparing a stock market listing in Hong Kong after abandoned attempts in the US and UK, reportedly seeking a valuation of around £50 billion.
Adding to the uncertainty, Shein warned that recent changes to US tariff policy, introduced under Donald Trump’s administration, have created "significant complexities" for its operations. The President’s decision to close the de minimis import loophole earlier this year is expected to hit sales to American customers, one of Shein’s biggest markets.
This is a double whammy for Shein, as it faces mounting regulatory fines in Europe, which have prompted the company to overhaul its governance and compliance structures.
In the past three months alone, Shein has been hit with more than €190 million (£165 million) in fines across Europe, according to Reuters. The penalties include €150 million from France for data privacy breaches, €40 million (£34.7 million) from France’s antitrust authority for misleading discounts, and €1 million (£870,000) from Italy for greenwashing. Further action could follow if an ongoing EU probe finds that some products fail to meet safety standards.
In response, Shein's Executive Chairman Donald Tang has outlined a series of governance and compliance reforms aimed at restoring investor and regulatory confidence.
