Rarely a day passes without further commentary on Shein, its failed flotation in the USA, its proposed flotation on the LSE and falling market valuation. Its troublesome history when it comes to policing its supply chain, and the sheer ‘wrongness’ of its lawful ability to duck the true cost of doing business in the UK as borne by locally registered competitors.
Now Shein has another growing issue on its hands: that of Temu which has been stealing its lunch in plain sight, country by country. Leveraging exactly the same advantages Shein has, to date, enjoyed.
In the US, at least, those advantages are being rigorously challenged with tariffs of ten per cent aimed at protecting US businesses, whilst also removing the de minimis duty subsidy on consumers’ personal imports from China, as well as from certain other countries. Here and in Europe, it is still business as usual for the Chinese giants as they continue to harvest swathes of consumers who are happy to turn a blind eye to human rights abuses and the decimation of their own high streets, in order to save money. As for the quality of what they are buying – products are cheap enough for them not to matter too much about that.
The very latest financial news suggests that Shein’s valuation is now shy of £24bn – around half of the original figure mooted. Its net profit for FY24 is down by close to 40 per cent to £789m.
Shein is reported to be turning its sight to moving at least some of its production for the US market to Vietnam, just as it has suggested it will use Turkish factories for some of its UK-bound products. This has not stopped the House of Commons business and select committee from seeking further information from Shein about the use of slave labour in Xinjiang for the production of cotton in its supply chain. Previous attempts to get ‘straight answers’ have been neatly sidestepped by Shein’s legal representatives.
Meanwhile, Temu’s offering is riddled with Chinese suppliers using fake UK addresses & business names so as to avoid accounting for import duties and VAT whilst appearing to be legitimately UK-based to the hapless consumer. These same suppliers are also able to avoid paying duty – as per Shein’s example – by shipping orders direct to consumers. With many also selling via established marketplaces like Amazon and eBay, again falsely claiming to have a UK presence to dupe consumers, there is much work to be done – either to prevent them from selling in the UK or to have them work to the same set of rules as our homegrown competitors must.
Many retailers have challenged the Government to better regulate this trade, as well as to ensure that personal imports from overseas businesses in offending countries are subject to duty and VAT, where applicable.
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