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Shein overtakes Asos as UK revenue hits £2.58bn

Fast-fashion retailer's sales rose 26% last year, intensifying calls to close the de minimis import duty loophole

By LineZotpaper
Published
Read Time2 min
Sources2 outlets
Shein, the online fast-fashion retailer founded in China, increased UK sales by just over a quarter last year to £2.58bn, overtaking British rival Asos, according to accounts filed at Companies House. Pre-tax profits rose 18% to £45.2m and the company paid £11.2m in current tax, up from £9.6m a year earlier.

The strong performance at Shein's UK division, which employs 113 people mostly in sales and marketing, was helped by marketing partnerships with the Wireless and Creamfields music festivals, a pop-up shop on London's Oxford Street and Christmas gift events in Edinburgh, Manchester, Liverpool and London.

The figures are likely to increase pressure on the government to bring forward action to change the "de minimis" rule that has underpinned the rise of Shein and Temu. The rule allows overseas sellers to send goods valued at £135 or less direct to British shoppers without paying customs duty. Former chancellor Rachel Reeves said she would abolish it by 2028, but major retail bosses have said the government should move sooner.

Fears about Chinese retailers and manufacturers dumping goods in the UK have grown since the US last year revoked its own de minimis exception for Chinese-made goods, which had exempted parcels under $800 (£600) from import tax. The EU is also phasing out its exemption: in July it replaced the €150 de minimis relief with a flat €3 customs duty.

Shein's global parent group listed on the Hong Kong stock exchange last month, valued at just over $26bn (£19.6bn) — far below the $100bn valuation it reached in an April 2022 fundraising round and the £50bn float previously considered. Investors' concerns about global regulatory changes contributed to the lower valuation.

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Analysis

Why This Matters

  • Shein's rapid UK growth puts pressure on the government to close the de minimis loophole earlier than the planned 2028 deadline.
  • Overtaking Asos illustrates a fundamental shift in UK fast-fashion, with Chinese-owned online retailers gaining market share at the expense of traditional players.
  • Regulatory moves in the US, EU and UK could force Shein to change its business model, potentially raising prices for consumers.

Background

Shein was founded in China and built its business on shipping low-value parcels direct to consumers, avoiding import duties. The UK currently exempts parcels under £135 from customs duty. Former chancellor Rachel Reeves committed to abolishing this exemption by 2028. The US scrapped its $800 de minimis for Chinese goods last year, crimping Shein's expansion there. The EU began phasing out its €150 exemption in July 2025, replacing it with a flat €3 customs duty. Shein listed on the Hong Kong Stock Exchange last month at a valuation of about $26bn, down from a peak of $100bn in 2022.

Key Perspectives

UK retailers and high street bosses: Urge faster closure of the de minimis rule, arguing it gives Shein and Temu an unfair cost advantage over domestic competitors that pay import duties and VAT. Shein: Highlights strong UK sales growth, job creation (headcount rose from 91 to 113) and marketing investments in music festivals and pop-up stores as evidence of its contribution to the UK economy. Critics and consumer groups: Warn that closing the loophole too quickly could raise prices for budget-conscious shoppers, but also note that delaying action lets Shein avoid tax while British retailers play by different rules.

What to Watch

  • Whether the UK government moves its 2028 de minimis reform deadline forward in response to retailer pressure and the precedent set by the US and EU.
  • Shein's next UK tax payment: the company paid £11.2m in current tax this year, up from £9.6m, but critics argue the figure is low relative to sales of £2.58bn.
  • The impact of the EU's flat €3 customs duty on Shein's European operations, as this could provide a template for UK reform.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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