Are Global Consumers Falling Out of Love with SHEIN?

For much of the past decade, SHEIN has been one of retail’s biggest success stories. The fast-fashion giant transformed the industry by combining ultra-low prices, rapid product launches and an algorithm-driven supply chain capable of responding to consumer demand almost in real time.

Its influence has been impossible to ignore. Dresses for less than £10, thousands of new styles added daily and social media feeds flooded with “SHEIN hauls” helped the retailer grow into one of the world’s largest fashion companies, challenging established names such as Zara, H&M and Primark.

But after years of remarkable growth, the question is becoming harder to ignore: are global consumers beginning to fall out of love with SHEIN? Recent financial results, changing shopping habits, increasing regulatory scrutiny and shifting consumer sentiment suggest the company is entering a far more challenging chapter.

Growth Is Slowing

While SHEIN continues to generate enormous sales, its latest financial filing reveals signs that its explosive expansion is beginning to moderate. Revenue increased by 8% year on year to US$41.85 billion in 2025. Although impressive, that represents a significant slowdown compared with growth of 20.7% in 2024.

Profitability has also weakened. Net profit margins narrowed from 8.7% to 4.9%, while the company reported a quarterly net loss of US$99 million, compared with a profit of US$395 million during the same period a year earlier.

Much of the quarterly loss was driven by a US$328 million accounting adjustment relating to convertible preferred shares ahead of a potential public listing, rather than deterioration in the underlying business. Nevertheless, the figures illustrate that SHEIN is operating in a more difficult commercial environment than in previous years.

Tariffs Are Reshaping the Business

One of the biggest pressures facing SHEIN comes from changing trade rules. For years, the company benefited from the US “de minimis” exemption, allowing parcels worth less than US$800 to enter the country duty-free. That exemption was removed in May 2025, increasing import costs for low-value shipments.

SHEIN acknowledged in its filing that the policy change has already had an adverse impact on US sales. The company also confirmed it has begun raising prices in the United States to offset higher duties and warned that similar regulatory changes in Europe could have an equal or even greater effect on future performance.

The European Union has also introduced new import levies on low-value e-commerce packages, placing further pressure on SHEIN’s low-cost business model. For a retailer built on affordability, every additional cost threatens one of its greatest competitive advantages.

Consumers Are Changing Too

Economic pressures are not the only challenge. Shopping behaviour itself appears to be evolving. Over the past year, social media platforms including TikTok, Instagram and Reddit have seen growing discussions around “underconsumption”, capsule wardrobes and buying fewer, better-quality products.

The trend stands in sharp contrast to the haul culture that helped propel SHEIN to global prominence. Consumers increasingly question whether buying dozens of inexpensive garments represents good value if those items have a short lifespan. Search interest and online conversations increasingly feature complaints about inconsistent sizing, declining quality, longer delivery times and rising prices.

While millions continue to shop with SHEIN, the excitement that once surrounded every haul video appears less dominant than during the retailer’s pandemic-era boom.

Trust Is Becoming a Competitive Issue

Beyond pricing, SHEIN continues to face significant reputational challenges. The company has been criticised for years over labour conditions within its supply chain, allegations regarding forced labour and concerns over environmental sustainability.

In 2024, SHEIN admitted that child labour cases had been identified within parts of its supplier network, stating that it had terminated relationships with offending suppliers and strengthened compliance measures. The company says it is investing tens of millions of dollars into governance, supplier oversight and worker protections, while requiring suppliers to comply with its code of conduct. However, campaign groups argue that greater transparency is still needed, particularly regarding factory locations and sourcing practices.

Meanwhile, regulators have intensified their scrutiny. The European Commission has opened a formal investigation into SHEIN under the Digital Services Act, examining issues including illegal product listings, recommender algorithms and consumer protection measures.

Consumer organisations have also raised concerns about so-called “dark patterns”,  design techniques that encourage excessive spending, as well as reports that independent product testing has identified elevated levels of certain chemicals in a proportion of garments.

Whether these issues materially affect purchasing decisions remains difficult to measure, but together they contribute to growing pressure on the company’s public image.

Yet Consumers Haven’t Left

Despite these headwinds, it would be inaccurate to suggest consumers are abandoning SHEIN altogether. The retailer reported 281 million active customers during the year to March 2026, an increase of 16% compared with the previous year. Those customers placed more than one billion orders, demonstrating that demand remains substantial.

SHEIN also continues to rank among the world’s most downloaded shopping apps and retains enormous reach across social media, where influencers continue to generate millions of views showcasing new purchases.

Its data-driven production model remains one of the most sophisticated in retail. Rather than manufacturing huge quantities upfront, SHEIN produces relatively small batches, using customer browsing and purchasing data to determine which products should be reordered. This approach has allowed it to minimise unsold inventory while reacting to trends faster than many traditional fashion retailers.

Combined with China’s highly integrated manufacturing environment, this supply chain remains one of SHEIN’s strongest competitive advantages.

So, Are Consumers Falling Out of Love with SHEIN?

The evidence suggests the answer is not entirely. Instead, the relationship appears to be changing. Consumers remain attracted by affordability, variety and convenience, but they are also becoming more aware of issues surrounding sustainability, product quality, labour practices and the true cost of ultra-fast fashion.

SHEIN’s extraordinary growth has not come to an end, but it is no longer accelerating at the pace that once made it one of retail’s most remarkable success stories. The coming years may determine whether SHEIN can evolve beyond being simply the cheapest option, or whether changing consumer values, tighter regulation and higher operating costs begin to erode the competitive advantage that fuelled its global rise.

Top image by Markus Winkler via pexels.com