Shein & Temu Risks: McGrath Warns of Dangers
EU Eyes Crackdown on Ultra-Fast Fashion Platforms Amid Safety and Fair Competition Concerns
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Brussels,belgium – The European Union is intensifying its scrutiny of ultra-fast fashion giants like Shein and Temu,with a senior EU official expressing alarm over product safety and the impact on local businesses. The surge in low-value goods entering the bloc, often from overseas sellers, is placing significant strain on consumer protection systems and creating an uneven playing field for European companies.
Safety Gate Overwhelmed by Unsafe Products
National consumer protection authorities across the EU are struggling to keep pace with the influx of unsafe non-food products,a situation highlighted by the record number of alerts issued through the Safety Gate service last year. Safety Gate, which acts as a rapid alert system for unsafe products and also accepts consumer complaints, received a staggering 4,137 alerts in the past year. Cosmetics accounted for over a third of these alerts, surpassing concerns related to toys, electrical appliances, automotive products, and chemicals.
“I am shocked by it, and I think we have a duty to protect European consumers,” stated Mr. McGrath, a key figure in the EU’s consumer protection efforts, in comments to The Guardian. He emphasized the growing pressure on member state systems due to the extraordinary growth of these platforms.
Unfair Competition and the Level Playing Field
Beyond safety concerns, Mr. McGrath also voiced worries about the economic impact of these platforms on local businesses. The rapid expansion of ultra-fast fashion retailers is creating what he describes as a “very serious level playing field issue for European businesses.”
“They are expected to compete with sellers who are not complying with our rules,” Mr. McGrath explained. “They are incurring significant costs in Europe to comply with our requirements, and they should not be expected to compete with those who are not doing the same.”
EU figures reveal a dramatic increase in low-value items entering the bloc. In 2024, an estimated 12 million low-value items are arriving daily, totaling 4.6 billion consignments valued under €150. This represents a doubling from 2023 and a tripling compared to 2022.
proposed EU Measures to Tackle the Influx
In response to these challenges, the EU is considering several measures. Among the proposals are the abolition of the €150 duty-free threshold for imported goods and the introduction of a handling fee for each package. These steps are intended to deter low-value purchases and help fund the increased costs associated with customs investigations.
These potential EU actions mirror moves made in the United states, where former President Donald Trump signed an executive order to end the $800 duty-free threshold, specifically targeting Chinese sellers. American consumers now face an additional 30% tax or a minimum of $50 per item on such purchases.
Moreover,the EU is exploring the creation of an EU-wide customs authority to address the systemic issues arising from the current volume of cross-border trade.
Mr. McGrath indicated that the issue is likely to be a topic of discussion at an upcoming EU-China summit in Beijing on July 25th. He confirmed his intention to address the matter directly with Chinese authorities during a planned visit later this year.
Retailer Responses
Shein has responded to the scrutiny by stating it is investing $15 million this year in compliance and safety initiatives. This includes $2.5 million allocated to product and safety quality tests and partnerships with 15 testing centers, including operations in the UK and germany. The company also reported removing 500 vendors since the launch of its marketplace.
A Shein spokesperson emphasized the company’s commitment to consumer trust and product safety: “Earning and maintaining the trust of our consumers is paramount, and we are fully committed to ensuring the products we offer are safe and compliant. All of our vendors are required to comply with Shein’s code of conduct and stringent safety standards, and must also abide by the relevant laws and regulations of the markets where we operate.”
Temu has been approached for comment.