Shein tightens compliance controls after major fines over privacy, discounts, and greenwashing
Shein, the fast-fashion giant, is overhauling its internal governance after a string of regulatory fines across Europe for data privacy breaches, misleading discounts, and greenwashing, according to company memos, investor letters, and sources familiar with the matter.
In a letter to investors reviewed by Reuters, Executive Chairman Donald Tang said Shein has launched a “Business Integrity Group” to unify compliance, governance, and external affairs functions, while expanding its internal audit capacity to strengthen corporate discipline.
Over the past three months, the company has been fined €150 million ($175 million) in France for data violations, €40 million for deceptive pricing practices, and €1 million in Italy for greenwashing claims. Shein is appealing the largest fine, but faces further scrutiny from an ongoing EU product safety investigation.
The Singapore-headquartered firm — which ships from factories in China to over 150 countries — is also rolling out stricter compliance frameworks in the U.S., Canada, Brazil, and Mexico as part of a global pilot program. Job postings show new audit and risk management roles in Los Angeles to reinforce oversight.
Tang admitted in the August 25 letter that Shein faces “heightened political and regulatory headwinds” in Europe and tariffs in the U.S., which have slowed growth. Coresight Research projects Shein’s U.S. revenue will rise 20.1% in 2025, down sharply from 50% growth this year, while Europe is expected to surpass the U.S. for the first time.
Shein’s compliance revamp follows mounting criticism of its opaque governance, copyright issues, and environmental standards — with a French OECD agency finding it noncompliant with global responsible business guidelines.
