LONDON – Chinese fast-fashion giant Shein has agreed to pay US$100 million (S$127.8 million) to settle an investigation by the US Federal Trade Commission (FTC) over delivery delays and other customer complaints, a source with direct knowledge told Reuters on Oct 23.
The settlement, equivalent to 44% of Shein’s second-quarter profit, is the latest to hit the online fast-fashion retailer facing a regulatory and tax crackdown in Europe and the US that has slammed the brakes on its growth.
Shein, founded in China though headquartered in Singapore, said in a statement to Reuters that it had “reached a constructive outcome with the FTC”, and that additional information would be shared soon. An FTC spokesperson declined to comment.
The company had warned in July filings for its Hong Kong IPO that the US probe could lead to significant fines.
Shein shares have already dropped 22% from their Sept 1 listing price as investors have grasped the extent to which fees on e-commerce packages imposed by the European Union have dented its business there.
Jefferies analysts say Shein’s app downloads across 10 markets were down 42% in September versus a year ago.
Shein is also still under investigation by the European Commission over illegal products on its marketplace. It was fined €150 million (S$214.8 million) by France’s data protection authority over the improper use of cookies in 2025.
It is not the first time the US FTC has taken action against online retailers over deliveries.
US firm Fashion Nova was fined US$9.3 million in 2020 for failing to meet shipping promises to customers and giving them gift cards instead of refunds.
Crocs-owned Hey Dude was also fined US$1.95 million in 2023 for failing to notify customers of shipping delays and suppressing negative reviews. REUTERS
