Chinese fast-fashion retailer Shein has agreed to pay $100 million, equivalent to ₹949.45 crore, to settle a US Federal Trade Commission (FTC) investigation into delivery delays and customer complaints. According to Reuters, the settlement represents 44% of Shein's second-quarter profit and comes amid growing regulatory and tax pressures in the United States and Europe. The company confirmed to Reuters that it had 'reached a constructive outcome with the FTC', adding that more information would be shared soon. An FTC spokesperson declined to comment on the settlement details. Shein did not detail the specific findings behind the FTC probe in its statement, focusing instead on its commitment to resolving regulatory inquiries globally.
FTC records showed that consumers filed more than 12,000 complaints linked to purchases worth over $11 million between January 2020 and June 2026. As reported by Reuters, some complaints were regarding shipping issues, with customers reporting to the FTC and the Better Business Bureau that packages marked as delivered by Shein never arrived. Customers also alleged that the company's customer service failed to resolve their issues effectively. The settlement follows a pattern of FTC enforcement against online retailers, with US firm Fashion Nova fined $9.3 million in 2020 for failing to meet shipping promises and giving customers gift cards instead of refunds, while Crocs Inc-owned Hey Dude was fined $1.95 million in 2023 for failing to notify customers of shipping delays and suppressing negative reviews.
The US settlement comes as Shein faces additional regulatory scrutiny in Europe, where authorities in several countries have stepped up scrutiny of fast-fashion imports and online marketplaces in recent months. The European Union has imposed a €3 fee on low-value e-commerce packages, plus an additional €2 handling fee taking effect on November 1, totaling €5 per separate customs code. According to Reuters, Shein's shares had fallen 22% from their September 1 listing price amid concerns related to European fees. The retailer has also raised prices as the US and Europe have closed customs duty loopholes. Jefferies analysts report that Shein's app downloads across ten markets were down 42% in September versus a year ago, reflecting the impact of regulatory pressures on the company's growth trajectory.
Chief Executive Sky Xu had stated last month that Shein would develop more higher-priced brands to improve profit margins. The company, which sources much of its manufacturing from China and is now headquartered in Singapore, has expanded rapidly worldwide on the strength of low prices and a fast design turnaround. The company, which operates a marketplace for third-party sellers offering products such as toys, household appliances and home decor, had warned in filings for its Hong Kong initial public offering in July that the US investigation could result in significant fines. Additionally, the European Commission is investigating the company over allegedly illegal products on its marketplace, while France's data protection authority fined Shein €150 million last year for improper use of cookies. The settlement represents the latest regulatory challenge facing the online retailer as it navigates a comprehensive crackdown on e-commerce practices across multiple jurisdictions.
