The news: Shein is moving to expand its physical presence in France despite opposition from local politicians and trade associations.

• The fast-fashion retailer opened five locations within BHV department stores in Angers, Dijon, Grenoble, Limoges, and Reims after pausing expansion amid a government investigation into the sale of illegal products on its marketplace.
• Shein also operates inside BHV’s Paris flagship, which drew both protests and lines when it opened in November 2025.

The situation: Shein faces repeated threats to its operations in France and beyond.

• The retailer narrowly avoided a three-month ban in France after authorities discovered childlike sex dolls and firearms for sale on its platform.
• 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.

Despite these headwinds, the regulatory scrutiny isn’t yet materially impeding sales, as the company’s low prices and on-demand manufacturing enable it to deliver broad value and selection.

• Shein’s US retail ecommerce sales grew 5% last year, even after the de minimis exemption was phased out, according to our 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.
• 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.

The implications: The issue for Shein—and for fellow Chinese ecommerce marketplaces like Temu and AliExpress—is that the more time and resources it spends to put out regulatory fires, the less bandwidth it has to invest in innovation and growth opportunities.

Shein’s stalled IPO is a case in point. The retailer recently announced a RMB 10 billion ($1.4 billion) investment to upgrade supply chains in Guangdong, a move widely seen as an attempt to win Beijing’s approval for a Hong Kong listing. While Shein’s agile supply chain drives its fast-fashion success, those funds could have been used to shore up operations in markets affected by de minimis crackdowns.

At the same time, retailers can’t rely on regulators to level the playing field, especially as Shein and Temu continue to resonate strongly with deal-hungry shoppers. To compete more effectively, retailers should:

• Speed up product development and reduce time to market to respond more nimbly to trend cycles.
• Invest in product quality to attract shoppers looking for more durable, ecofriendly brands.
• Consider premiumization to attract more affluent, less price-sensitive consumers.