Chinese fast-fashion giant Shein has agreed to pay $100 million to settle an investigation by the US Federal Trade Commission (FDC) over delivery delays and other customer complaints.
The settlement, equivalent to 44% of Shein’s second-quarter profit, is the latest to hit the online fast-fashion retailer facing a regulatory and tax crackdown in Europe and the US that has slammed the brakes on its growth.
Shein, founded in China though headquartered in Singapore, said that it had reached a constructive outcome with the FTC, and that additional information would be shared soon.
The company had warned in July filings for its Hong Kong IPO that the US probe could lead to significant fines.
Consumers filed more than 12,000 complaints about Shein over more than $11 million in purchases between January 2020 and June 2026, according to FTC records reviewed by Reuters.
At least some of those relate to shipping, with customers reporting to the FTC and Better Business Bureau that they never received packages that Shein had marked as delivered, and that Shein customer service did not resolve the issue.
As well as selling its own-brand clothing, Shein’s website also operates as a marketplace where third-party sellers offer everything from toys to household appliances and decor.
And there’s further pain ahead for Shein, with the EU imposing an additional €2 handling fee from November 1, making the total fee €5 per separate customs code.
“The way these tariffs are implemented is extra punishing for Shein,” said Mike Ryan, head of e-commerce insights at Smarter Ecommerce, who has tracked how Shein has dialled down its spending.
Shein was known for selling $5 dresses and $10 jeans, but has been forced to raise its prices as the US and then Europe closed customs duty loopholes.
“CEO Sky Xu said last month that Shein would develop more higher-priced brands in an attempt to boost profitability,” Reuters reported.
Shein is also still under investigation by the European Commission over illegal products on its marketplace. It was fined €150 million ($168 million) by France’s data protection authority over the improper use of cookies last year.
