Nothing epitomizes regulatory failure like the huge poster of Shein Ltd. Chairman Donald Tang at the BHV department store in Paris, where the Chinese e-commerce platform's first physical outlet opened this week. For years now, consumer watchdogs in Europe have been warning about cheap and unsafe knock-offs arriving by the planeload from Shein and PDD Holdings Inc.'s Temu. Governments have done very little in response, even as a test this week found that 70% of orders from the two platforms including chargers, toys and jewelry were defective.
Now that French authorities have moved to suspend Shein's website and asked the European Commission to open a probe following reports that weapons and childlike sex dolls were being sold on its platform, one could well ask: "What took you so long?" A plethora of third-party sellers and Shein's own controversial network of 7,000 factories (primarily in China) have raised red flags over weak controls and opacity. With the broader popularity of shop-til-you-drop e-commerce platforms delivering the equivalent of 145 parcels per second into the European Union last year, it was only a matter of time before drugs, weapons or something even darker turned up.
Shein says it's cooperating "100%" and that it has banned all sex dolls from its websites. But this is a systemic issue. The problems stem both from Shein's business model and Europe's apparent inability to enforce its own laws. Packages are flying under authorities' noses largely because those worth less than €150 ($173) are exempt from customs duties, a threshold that Shein and Temu's low prices easily avoid; this is similar to the "de minimis" treatment of low-value imports in the US that the Trump administration has suspended. While the EU has proposed reforms along the same lines, it will take years to come into force.
There's been too little urgency to act. Politicians tend not to want to get in the way of a shopping craze that lets voters forget their purchasing-power blues. Especially when the craze might bring a stock-market listing, as was nearly the case for Shein in the UK, or bless the hallowed halls of a Parisian department store. The fact that a former French government minister advised Shein until recently shows the scale of its lobbying power in a country where ready-to-wear has lost 50,000 jobs over the past decade. Geopolitics is also likely at work, with France hesitant to give Beijing more reasons to punish Louis Vuitton handbags and Remy Cointreau cognac.
With Paris now recognizing that the situation has become untenable, the path to better enforcement is clear. Customs reform is essential. So is regulation at platform level and knowing who to call when the rules are being broken. Again, these rules already exist. Back in June, European consumer group BEUC accused Shein of being in breach of the Unfair Commercial Practices Directive, pointing to alleged fake discounts and pressure-selling tactics like "low stock" messages.
The EU shouldn't expect France to handle these issues alone in a borderless market of 27 countries. As for the UK, which is neither inside the EU nor in the running for a Shein IPO, it has no excuse.
None of this has to be fatal for the likes of Shein, which claims its cheap prices come from its efficient supply chain and which has been relaxed about governments cracking down on loopholes. It's eyeing a bumper $2 billion in net income in 2025 and it is still upending the retail landscape, pressuring merchants from Asos Plc to Zara parent Inditex SA.
But even if the e-commerce genie is out of the bottle, the need for a level playing field is essential - and if platforms can't play by the rules, then a ban has to be on the table. A lawless hole in the middle of the European single market is not sovereignty - it's humiliation.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
