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Shein’s UK Sales Surge to $2.8 Billion in 2024

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Shein’s British business generated £2.05 billion ($2.77 billion) in sales in 2024, marking a 32.3% increase from 2023, according to a recent filing. The UK represents Shein’s third-largest market after the United States and Germany as the fast-fashion e-commerce giant prepares for an initial public offering in Hong Kong.

Shein Distribution UK Ltd reported a pretax profit of £38.25 million in 2024, up 56.6% from £24.4 million the previous year. The filing highlighted milestones including a pop-up shop in Liverpool, a Christmas bus tour across 12 UK cities, and the opening of two new offices in Kings Cross and Manchester.

The retailer is known for low prices, constant promotions, and rewards programs that encourage repeat purchases. Shein has captured market share from competitors such as ASOS (ASOS.L) and H&M (HMb.ST), especially as rising inflation has pushed consumers toward bargain hunting. Its UK site offers items ranging from £7.99 ($10.84) dresses and £15 ($20.36) jeans to toys, craft supplies, and storage products.

Shein has benefited from customs duty exemptions on low-value e-commerce shipments, allowing goods to be shipped directly from Chinese factories largely tariff-free. However, these exemptions are being phased out, raising costs and prices, particularly in the U.S. The Trump administration eliminated the “de minimis” exemption for parcels under $800, and the EU plans to remove its duty waiver for parcels under €150. The UK is also reviewing its policy on low-value imports amid complaints that it favors online retailers like Shein and Temu.

Shein and Temu Outpace Global Retail Giants in South Africa’s Fashion Market

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China-founded e-commerce retailers Shein and Temu have rapidly captured a combined 3.6% share of South Africa’s retail clothing, textile, footwear, and leather (CTFL) market, generating sales worth 7.3 billion rand ($405 million) in 2024, according to a new report.

Shein entered South Africa in 2020, with Temu following in 2024. Both companies have disrupted the local retail sector through aggressive pricing strategies, targeted marketing, and exploiting tax loopholes that initially gave them a competitive advantage over domestic retailers. The tax loopholes were closed last year after calls from local retailers and regulators.

The Localisation Support Fund (LSF) report highlighted a decline in domestic retailers’ market share of the CTFL sector, dropping from 75.3% in 2011 to 74% in 2024. Meanwhile, established international brick-and-mortar brands such as H&M, Zara, and Cotton On collectively hold a 3.4% share.

Shein and Temu together now control 3.6% of the overall CTFL market and a significant 37.1% of South Africa’s e-commerce CTFL market. Shein alone accounts for 28% of online ladies’ CTFL sales.

Sean Mercer, principal consultant at BMA, emphasized the speed of their rise: “Those international retailers have acquired this market share over 13 years, and Shein and Temu have managed to match and surpass this in just five years.”

Zalando Revises 2025 Outlook Amid Inventory and Growth Concerns

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Zalando, Germany’s largest online fashion marketplace, has adjusted its 2025 guidance following the acquisition of rival About You. While the updated forecast reflects higher expected sales, analysts and investors expressed concern over growing inventories, heavier discounting, and signs of weaker consumer sentiment—factors that could weigh on second-half performance.

After initially gaining, Zalando’s shares fell 5.6% to their lowest level in almost a year, bringing year-to-date losses to around 25%. Deutsche Bank analyst Adam Cochrane noted that the stock’s appeal as a revenue growth play is now in question, with less potential for earnings to exceed expectations.

The company now expects 2025 gross merchandise volume (GMV) of €17.2–€17.6 billion ($19.91–$20.38 billion), representing 12–15% growth from last year’s figures for the combined group. This is a sharp increase from its previous forecast of 4–9% growth, largely due to the inclusion of About You, acquired in July for €1.13 billion.

Second-quarter GMV rose 5% year-on-year to €4.06 billion, but gross margin slipped by 80 basis points due to increased discounting. Analysts flagged that earnings quality was weaker than hoped and pointed to a 15% year-on-year inventory rise to €1.66 billion by June 30, raising the risk of more markdowns ahead.

Co-CEO Robert Gentz acknowledged weaker consumer sentiment but remained optimistic about a strong second half. Interim CFO David Schroeder said the third quarter had started well, with mid-single-digit growth expected to continue.

Zalando is also expanding its European logistics network, opening it to partners in an effort to boost growth amid rising competition from fast-fashion rivals like Shein. The company forecasts 2025 adjusted EBIT of €550–€600 million for the combined group, up from its prior estimate of €530–€590 million excluding About You. Gentz added that while U.S. tariffs would not directly affect operations, they could dampen consumer sentiment in the long term.