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Shein's growth stalls as new tariffs and EU rules hit sales and profits ahead of its Hong Kong IPO.

Market News
10 Aug 2026
CNBC
View Source
Bearish
Shein's growth stalls as new tariffs and EU rules hit sales and profits ahead of its Hong Kong IPO.

Shein's rapid growth and profitability have slowed due to new U.S. tariffs and the removal of the de minimis exemption, which previously allowed low-value packages to enter duty-free. This change forced Shein to raise prices, leading to a 14% sales drop in the U.S. in early 2025 and a 3% revenue decline between 2024 and 2025. Similar regulatory changes in Europe, Shein's largest market, are expected to cause further sales declines and pressure on profitability. To adapt, Shein is expanding its higher-margin third-party marketplace and brand enablement services, which show promising growth potential. However, experts warn that losing its low-price advantage challenges Shein's core business model and brand perception ahead of its Hong Kong IPO.

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