Active expansion of Shein: why it is a threat to Ukrainian fashion retailers
9 June 15:04
One of the most powerful players in the global fashion segment, the Chinese giant Shein, is entering the Ukrainian market. Its main advantages are ultra-low prices, quick response to trends, and an aggressive advertising strategy. Experts believe that this could become a systemic threat to Ukrainian retailers. This was reported by RAU, "Komersant Ukrainian" informs
Active expansion of Shein in Ukraine: what is known
At the end of April 2025, the Promodo team recorded an increase in Shein’s activity in the digital space of Ukraine. The company started buying ad slots in Google search results, which had not been seen before. Advertisements also appeared in Facebook and Instagram feeds, indicating a targeted expansion into the Ukrainian market.
After complications in the US related to the new tariff policy, Shein stepped up its expansion into new markets. According to Meta, Shein and another Chinese marketplace, Temu, became the top advertisers in the world, spending more than $2 billion each in 2023 and almost $3 billion in 2024.
In 2023, Shein’s sales reached $30 billion. And although advertising budgets in Ukraine are unknown, it is clear that the company has entered with serious intentions.
How Shein works: the “ultra fast fashion” model
Shein’s model is based on maximum speed: it takes only a few days from the moment a new trend appears to appear on the website. The company adds more than 500 new items every day, and the total online assortment exceeds 600 thousand products.
The brand doesn’t just create clothes – it has built an efficient production ecosystem. Almost the entire supply chain is concentrated in China, from fabrics and buttons to sewing. This allows the company to instantly launch production of new models in small batches and bring them to market immediately.
Pricing as a challenge for Ukrainian players
Like Temu, Shein specializes in ultra-low-cost clothing. The cost of one item is a few dollars. This attracts young people and a price-sensitive audience. For the Ukrainian market, which is focused on saving money after a full-scale war, this offer is extremely competitive.
According to Admitad, online sales in Ukraine grew by 19% in 2024. Users are increasingly buying what they see in social media feeds. And the “here’s what I ordered from Shein” format on TikTok only increases interest in the brand.
Import privileges are a blow to legal business
One of the main imbalances is the absence of taxation on goods worth up to 150 euros that Shein delivers by international parcels. Ukrainian fashion retailers have to pay VAT, customs duties, hire staff and build infrastructure.
“Shein’s entry into Ukraine is not just about competition in the fashion retail market. This is the result of the government policy that created a hole in the customs and actually subsidizes international companies – Amazon, Allegro, Shein, Temu, Turkish, Polish and Chinese sellers, exempting them from any taxes,” comments Kasta CEO Andriy Logvin.
“Fair competition is not about Shein”: position of market players
“This is a logical result of the US decision to close its de minimis loophole. Therefore, large Chinese trading platforms have refocused their attention on countries such as Ukraine, where the exemption remains in force,” says Sergey Badritdinov, CEO of Intertop Ukraine.
According to him, Shein, like many international fashion brands, operates on the model of small imports via international parcels, which are exempt from taxation. This creates a serious imbalance.
“Intertop Ukraine pays taxes, invests in physical infrastructure, logistics, service, jobs, and helps the Armed Forces of Ukraine. And companies that work through international platforms bypass these costs and as a result gain a price advantage that has nothing to do with real efficiency or innovation,” says Badritdinov.
Experts estimate that in 2025, the Ukrainian budget may lose more than UAH 40 billion in tax revenues due to the de minimis threshold. And this is without taking into account the increased activity of new players, including Shein.
Restrictions in the US and Europe: Shein is looking for new markets
In April 2025, Shein’s sales in the US decreased by 23% after the abolition of the exemptions. The EU is also considering a €2 fee for processing each small parcel from China. France is already drafting a bill to impose a €10 fine for each product that does not meet environmental requirements.
In addition, Shein faces constant accusations of plagiarism. Since 2018, at least 93 companies have sued the brand for copyright infringement.
