Shein is expanding its physical presence in France, opening five locations within BHV department stores in Angers, Dijon, Grenoble, Limoges, and Reims after previously pausing expansion amid a government investigation into the sale of illegal products on its marketplace. The retailer already operates inside BHV’s Paris flagship, which drew both protests and lines when it opened in November 2025, underscoring Shein’s polarizing position as a fast-fashion giant with strong consumer demand but growing political and public backlash. Local politicians and trade associations continue to oppose its growth, yet Shein is pressing ahead in pursuit of deeper penetration across the European Union.
Regulatory threats around the world are mounting, particularly in France and the wider EU. Shein narrowly avoided a three-month ban in France after authorities discovered childlike sex dolls and firearms for sale on its platform, prompting intensified scrutiny of marketplace controls. It is now being investigated by the EU over the sale of illegal products, addictive design including its use of gamification and rewards, and the transparency of its recommendation algorithms. The gradual elimination of the de minimis exemption in the US, EU, and UK is challenging Shein’s ability to keep prices low, but the regulatory scrutiny is not yet materially impeding sales because low prices and on-demand manufacturing continue to deliver broad value and selection for shoppers.
Despite policy headwinds, Shein’s performance in major markets remains resilient. Shein’s US retail ecommerce sales grew 5% last year, even after the de minimis exemption was phased out, according to internal estimates. The retailer posted strong sales growth in France (26.7%), Germany (31%), and Spain (26.6%) in 2025, as well as smaller gains in the UK (4.2%) and Brazil (2.5%), per Euromonitor data. Over 1 in 4 US consumers 28% surveyed by Omnisend last August reported shopping with Shein monthly, up from 23% in April 2025, and 10% of French consumers rank Shein among the fashion retailers they frequent most often, according to an AlixPartners and YouGov survey conducted in late 2025. At the same time, spending time and resources to manage regulatory investigations limits Shein’s capacity to invest in innovation and international growth, illustrated by its stalled IPO and a RMB 10 billion ($1.4 billion) investment to upgrade supply chains in Guangdong that is widely viewed as aimed at securing Beijing’s approval for a Hong Kong listing, rather than shoring up operations in markets affected by de minimis crackdowns.
The intensifying oversight has implications for both Shein and its competitors. Fellow Chinese ecommerce marketplaces like Temu and AliExpress face similar pressures as regulators reassess tax rules, product safety, addictive product design, and algorithmic transparency. Retailers in Western markets cannot rely on regulators to level the playing field, especially while Shein and Temu continue to resonate strongly with deal-hungry shoppers drawn to ultra-low prices and rapid trend cycles. To compete more effectively, retailers are advised to speed up product development and reduce time to market, invest in product quality to attract shoppers seeking more durable and ecofriendly brands, and consider premiumization strategies that appeal to more affluent, less price-sensitive consumers who prioritize value beyond price alone.
