European parcel tax hits Shein hard: prices rise, profits halve

The new European tax on low-cost packages is hitting Shein hard: operating profit fell by half in the first half of the year. The Chinese fashion giant is raising its prices, cutting back on advertising, and expanding its European logistics network.

Revenue takes a hit

Since 1 July, the European Union has been levying a 3-euro tax on each distinct product type in small e-commerce shipments from outside the EU. And Shein is feeling the impact: in Europe, revenue fell by 13.9% in the second quarter to $3.8 billion (3.2 billion euros). The e-commerce giant actually began preparing for the measure even before it took effect: in the second quarter, the company raised its European prices and cut back on advertising spending.