France fines Shein $47M over fake discounts
France has imposed a fine of approximately $47 million on Chinese retailer Shein for alleged deceptive business practices, following a year-long investigation by its antitrust regulator. The investigation revealed that Shein's sales handling company, Infinite Style E-Commerce (ISEL), misled customers regarding discount promotions. French regulations stipulate that any discount must be based on the lowest price offered in the last 30 days, but the probe found that Shein failed to comply with this rule, often hiking prices before applying discounts.
The investigation, which examined thousands of products on Shein's French website from October 2022 to August 2023, uncovered that 57% of advertised discounts were not genuine price reductions, 19% offered less of a discount than claimed, and 11% represented actual price increases. In response to the findings, ISEL accepted the fine and stated that it had addressed all identified issues within two months of being notified in March 2024.
Additionally, French regulators found that Shein made unsubstantiated environmental claims, such as a pledge to reduce greenhouse gas emissions by 25%, without providing supporting evidence. The company is also under scrutiny from the European Commission for potential violations of EU consumer protection laws, including misleading discount practices and lack of transparency in customer service. Shein has until June 26, 2025, to address these concerns or face fines of up to 6% of its global turnover.
Despite these challenges, Shein reported a profit of $1 billion on $38 billion in revenue in 2024 and is pursuing a listing on the Hong Kong Stock Exchange after previous unsuccessful attempts in New York and London.
