Shein Overtakes Asos in the UK, Prompting Calls to Reform the De-Minimis Duty Rule

Shein’s UK division recorded a 26 % rise in sales to £2.58 billion last year, surpassing British fast-fashion rival Asos. Pre-tax profit grew 18 % to £45.2 million, and corporation-type tax payments increased to £11.2 million from £9.6 million the previous year. The retailer’s UK workforce expanded to 113 employees, mainly in sales and marketing, up from 91 a year earlier. These figures come from the company’s accounts filed at Companies House.

The Guardian

Shein’s growth relies on shipping low-value parcels that fall below the UK’s “de minimis” threshold of £135, allowing them to enter the country duty-free. The United States eliminated a similar exemption for Chinese-made goods in 2023, and the European Union began phasing out its €150 relief in July, replacing it with a flat €3 duty. The former UK chancellor Rachel Reeves has announced a plan to abolish the UK de minimis rule by 2028, though major retail executives have urged the government to act sooner.

The Guardian

Founded by entrepreneur Chris Xu, Shein reached a $100 billion valuation in an April 2022 fundraising round, becoming the world’s third-most valuable startup. A contemplated £50 billion (US $66 billion) London Stock Exchange listing in 2024 was ultimately replaced by a Hong Kong float. The company moved its headquarters to Singapore in early 2022 and has begun manufacturing in Turkey and Brazil. After forced-labour concerns were raised, Shein said it tightened supplier policies, with any child- or forced-labour violations leading to immediate contract termination. In its first post-float results, Shein reported a 67 % drop in quarterly profit to £173 million, attributing the decline to higher oil prices and freight rates linked to the war in Iran.

The Guardian

Rachel Reeves stated that the de minimis exemption, which lets overseas sellers ship goods valued at £135 or less without customs duty, will be removed by 2028. Shein attributed its UK sales boost to a marketing partnership with the Wireless and Creamfields music festivals, a pop-up shop on Oxford Street, and seasonal gift events in Edinburgh, Manchester, Liverpool and London.

The Guardian

The government faces mounting pressure from retail leaders to accelerate the repeal of the de minimis rule, a move that could reshape the cost structure for low-price online sellers such as Shein and its competitor Temu. The timeline for any legislative change remains tied to Reeves’s 2028 target, but industry calls for earlier action suggest the issue will feature prominently in upcoming trade and fiscal policy discussions.

The Guardian