Shein’s Counterfeit Fashion Crisis: New EU Regulations Take Aim

Shein Faces Stricter EU Regulations and Supply Chain Scrutiny

Compliance with the Digital Services Act

Shein, a leading online fashion retailer, will soon be subject to rigorous regulations under the European Union’s Digital Services Act (DSA). The DSA aims to enforce stringent rules surrounding content moderation, user privacy, and safety. In February, the European Commission designated Shein as a “very large online platform,” necessitating its adherence to these new standards.

Allegations of Counterfeit Products and Labor Violations

Beyond accusations of counterfeit or infringing products on its platform, Shein has faced criticism regarding its supply chain practices. The company’s remarkably low prices, such as $15 dresses and $3 T-shirts, have raised concerns about the working conditions of its garment workers. A report by the Swiss advocacy group Public Eye alleged that workers in Shein’s supply chain were subjected to illegally long hours and other labor violations.

Links to Forced Labor in Xinjiang

Furthermore, an investigation by Bloomberg revealed that some of the cotton used in Shein’s products could be traced back to the Xinjiang region in China. US officials have accused this region of engaging in the forced labor of Uyghurs, a predominantly Muslim ethnic group. In response, Shein has stated that only a small percentage of its cotton originates from Xinjiang or other “unapproved” locations.

Shein’s IPO Plans Amid Increased Regulation

As Shein navigates the challenges posed by increased regulation in the EU, the company is simultaneously preparing for an initial public offering (IPO) in the United States. In late 2022, Shein filed to go public, and as of 2023, the e-commerce giant was valued at an impressive $66 billion.