Shein outsells British rival Asos as UK revenue hits £2.58bn

Shein, the online fast-fashion retailer founded in China, increased sales in the UK by just over a quarter last year, overtaking its British rival Asos.The company, whose global parent group listed on the Hong Kong stock exchange valued at just over $26bn (£19.6bn) last month, increased sales at its UK division by 26% to £2.58bn, according to accounts filed at Companies House.Pre-tax profits rose 18% to £45.2m even as the number of people employed by the group in the UK, mostly in sales and marketing, rose to 113 from 91 a year before. The company paid £11.2m in current tax – understood to be mainly corporation tax – up from £9.6m a year before.Shein said sales had been helped by a marketing partnership with the Wireless and Creamfields music festivals, a pop-up shop on London’s Oxford Street and Christmas gift events in Edinburgh, Manchester and Liverpool as well as London.The strong trading 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 the fast-growing online specialists Shein and Temu.Fears about China’s 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, crimping Shein’s expansion there.The retailer’s model is based on shipping orders of cheap clothes from Chinese factories to homes so that each order is low enough in value to avoid import duties.Under the US exemption, which was scrapped last year, parcels with a value of less than $800 (£600) shipped to individuals had been spared from import tax.The EU is also phasing out its exemption on customs duties for low-value parcels. It began in July by replacing the €150 de minimis relief with a flat €3 customs duty.The former UK chancellor Rachel Reeves said she would get rid of the UK’s rule, which allows overseas sellers to send goods valued at £135 or less direct to British shoppers without paying any customs duty, by 2028. However, major retail bosses have said the government should move sooner.Investors’ concerns about global government regulatory changes meant Shein’s value was far lower when it listed on the stock market than had been expected several years ago.It reached a valuation of $100bn in an April 2022 fundraising round, making it the third most valuable startup in the world, and then considered a £50bn ($66bn) float on the London Stock Exchange in 2024 before eventually launching in Hong Kong.Shein, founded by the entrepreneur Chris Xu, runs most of its operations from China but sells all its goods outside the country. It moved its headquarters to Singapore at the start of 2022 and has recently begun manufacturing in other countries including Turkey and Brazil.After forced labour concerns were raised, Shein said it had tightened its supplier policies, enforced through regular audits, with any child or forced labour violations becoming grounds for immediate termination of contract.Last week, Shein reported a 67% fall in group quarterly profits to £173m in its first results since the float, blaming higher oil prices and freight rates linked to the war in Iran.