Yet another country seems to be considering new rules that could change the way companies like Shein and Temu operate.
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According to reporting from Capital magazine and Reuters, German regulators are crafting regulations that could target Chinese discount retailers . Though neither Shein nor Temu have headquarters in China, much of their respective business models is reliant on China-direct shipping from merchants, suppliers and manufacturers to consumers globally.
Capital magazine reported that those rules would put guardrails in place to ensure that companies like those are in line with regulations around product safety, environmental protection, consumer rights and customs and taxes.
The potential incoming regulations could place a new onus on the role that Shein, Temu and other competitors, like AliExpress , play in the European consumer market. Capital said an economy ministry spokesperson said the entity expects that Chinese shopping apps face the same level of scrutiny as an EU-native business might.
“It is crucial that existing regulations are enforced just as strictly for third-country retailers as they are for EU retailers,” Capital quoted that spokesperson as saying.
Earlier this year, Germany said it would support doing away with the EU’s version of the de minimis exemption, which allows packages worth under a certain value threshold to enter countries without further scrutiny from customs and without being subjected to duties.
According to Reuters, Handelsverband Deutschland (HDE), Germany’s largest retail association, has been lobbying to abolish the exception because it makes it nearly impossible for customs to determine whether the products comply with the regulations the EU has set forth for products.
The bloc has been considering abolishing the limit, which currently stands at €150 ($165); according to Reuters, the EU Commission disclosed that in 2023, two billion packages made their way into the bloc from outside companies.
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Already, several countries, including Turkey and South Africa , have abandoned or altered their de minimis thresholds, making it more expensive and more difficult to import low-value products in China. U.S. regulators have also spoken about a potential change to the threshold; the country has one of the highest de minimis thresholds in the world, at $800, up from $200 in 2016.
In addition to its outspoken position on the duty-free threshold, the German government t ook shots at Shein earlier this year for allegedly violating the terms of the EU Digital Services Act, under which Shein is classified a very large online provider (VLOP) and is subjected to extended responsibilities. The fast-fashion purveyor signed a cease-and-desist order for certain issues Germany had with its site and operations earlier this year.
Shein said it will comply with any legal requirements set forth inside jurisdictions they operate in or sell to.
“We are committed to complying with German and European laws, and we support all efforts that create a level competitive playing field that benefits consumers. We are actively engaging stakeholders in Germany and working to contribute to these efforts,” the spokesperson said in an email to Sourcing Journal.
Temu had a similar sentiment to share.
“Temu is a newcomer to Europe, having entered our first markets just over a year ago. During this time, we have listened carefully to feedback from customers, regulatory bodies, and consumer advocacy groups. We have been actively adjusting our services to align with local practices and preferences, and we are fully committed to complying with the laws and regulations of the markets where we operate,” a Temu spokesperson said via email.
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