Fast fashion giant Shein has reported a quarterly loss after US president Trump ended the small package import duty exemption.
Shein, which, like rival Temu, has grown rapidly through the appeal of low-price products, booked a loss of $99m in the first quarter – a steep fall from the net income of $395m it achieved a year earlier.
The online retailer, which is based in Singapore but was originally founded in China, is planning an IPO in Hong Kong, and the loss was revealed in a related filing.
The disclosure followed an executive order from Trump last year that ended the exemption of goods valued at $800 or less from US import duties. The so-called de minimis rule was seen as benefiting retailers of cheap products from the US’ global competitor, China.
Shein said the loss was primarily attributable to a $328m fall in the fair value of convertible redeemable preference shares.
But Shein reported: “The removal of the US de minimis exemption has had an adverse impact on our sales in the US and the overall growth of our net revenues.”
The etailer added: “In response to the increased duties and taxes, we are pursuing a wide range of options, including increasing our prices in the US market to offset a portion of the increased costs.”
The outbreak of war in the Middle East also hit Shein’s first-quarter performance and increased some costs.
Like the US, the EU is also imposing a tax on low-value Chinese imports. The UK intends to follow suit, but action is not expected until 2028. Retailers, including Debenhams chief executive Dan Finley, have argued that the loophole should be closed before then.
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