Online fast-fashion retailer Shein is tightening its compliance framework after facing several penalties related to data privacy, misleading discounts and environmental claims, as reported by Reuters.
The company, founded in China and based in Singapore, ships apparel and accessories to more than 150 countries and has faced regulatory scrutiny in multiple regions during its rapid global growth.
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In 2025, French regulators imposed a €150m ($174.53m) fine for unauthorised cookie data collection and an additional €40m penalty for misleading discounts.
Italy also fined the company €1m for greenwashing.
Shein is appealing the €150m fine, while a European consumer protection investigation could result in further action if its products are found to breach EU safety requirements.
In a letter to investors cited by Reuters, Shein’s executive chairman Donald Tang stated that the company has formed a Business Integrity Group linking its compliance, governance and external affairs functions, and that internal audit capabilities have been expanded to reinforce discipline.
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The internal restructuring focuses on areas exposed to potential legal issues, such as copyright violations and product safety compliance.
Sources within Shein state that as its global profile has grown, so too have its risks, prompting senior management to allocate more resources to address persistent compliance problems.
Tang noted heightened challenges during the second quarter of 2025, citing US tariffs and intensifying political and regulatory headwinds in Europe.
He stated: “In Q2 we grew firmly in line with both our global expansion plan and our financial projections.”
The company’s US business, its largest market, has been impacted by the removal of duty-free status for low-value online purchases, leading to price adjustments.
Coresight Research projects that US revenue will increase 20.1% in 2025 to $17.2bn, down from estimated 50% growth in 2024.
Europe is to overtake the US in sales, with projected revenue rising 30.7% to $17.9bn.
Regulatory attention in Europe has intensified following a French Organisation for Economic Cooperation and Development investigation initiated by two lawmakers.
This inquiry concluded that Shein does not align with guidelines covering responsible business conduct, labour rights, environmental standards and transparency.
The report stated that “information about the activity of the group, its finances and its governance remains extremely rare, hindering a clear analysis of its business, its revenue and its structure in the European Union and globally.”
In response, a Shein spokesperson said the findings “at times did not reflect the neutral mediation intended by the Organisation for Economic Cooperation and Development framework” and denied breaching EU laws, “specifically those that are not yet applicable.”
Shein has submitted plans for a Hong Kong stock market listing after unsuccessful listing attempts in New York and London.
The company is also recruiting governance, risk and compliance specialists, along with an internal audit manager, based in Los Angeles.
