Shein Boosts Compliance Controls Amid Fines for Privacy, Greenwashing, and Misleading Discounts

Shein, the global fast-fashion giant, is tightening its compliance and governance measures after facing multiple regulatory penalties across Europe. The China-founded and Singapore-headquartered retailer, known for its ultra-fast, low-cost apparel shipments to over 150 countries, has announced internal reforms following fines for data privacy breaches, fake discounts, and greenwashing.

In a letter to investors reviewed by Reuters, Executive Chairman Donald Tang revealed that Shein has launched a new “Business Integrity Group” to enhance corporate discipline. This group integrates compliance, governance, and external affairs teams, alongside expanded internal audits. The company is also hiring governance and audit specialists in Los Angeles as part of this overhaul.

Over the past three months, Shein has been hit with major fines: €150 million ($174 million) from France for unauthorized data collection through cookies, €40 million for misleading discounts, and €1 million from Italy for greenwashing. The company is appealing the largest penalty. Further scrutiny looms, as EU regulators probe whether Shein’s products meet European safety standards.

Amid rising legal and political headwinds, Tang admitted in the investor letter—dated August 25—that Shein faces “heightened challenges,” including U.S. tariffs and stricter European regulations. The end of duty-free treatment for low-value orders has slowed U.S. sales, its biggest market, prompting price hikes. Coresight Research forecasts U.S. revenue growth of 20.1% in 2025, down from 50% in 2024, while Europe is set to overtake the U.S. with projected sales of $17.9 billion.

Adding to its challenges, a French OECD agency recently concluded that Shein fails to meet international standards on transparency, labor rights, and environmental responsibility. The company disputes these findings, claiming the investigation lacked neutrality and included regulations not yet in effect.