Fast-fashion giant Shein has unveiled a €250 million investment plan for the UK and Europe, aiming to tackle criticism surrounding its business practices and adapt to evolving regulations in the region. This substantial investment includes a €50 million allocation for potential research and development (R&D) or pilot production facilities within Europe, signaling a shift in the company's sourcing strategy.
Shein, renowned for its affordable clothing and accessories, has faced accusations of undermining local industries due to its reliance on low-cost Chinese imports. The company has also come under scrutiny for benefiting from a tax loophole on low-value parcels entering the European Union, a provision currently under review by EU policymakers.
In response to these challenges, Shein aims to diversify its supply chain and increase local production. While the company currently sources most of its products from China, it has already begun sourcing some items from Turkey and plans to expand this effort further. Additionally, Shein intends to invest in supporting UK and European brands, designers, and artisans, providing them with opportunities to reach a wider audience through Shein's extensive marketplace.
The company's investment strategy also includes a commitment to sustainability. Shein has launched a €200 million "circularity fund" to foster the development of textile recycling technologies within the region. This initiative reflects the company's growing focus on environmental responsibility and circular economy practices.
This multi-pronged investment plan comes as Shein prepares for a potential initial public offering (IPO) in London. By addressing concerns about its impact on local industries, adapting to changing regulations, and investing in sustainability, Shein aims to strengthen its position in the European market and appeal to a wider range of consumers.
