To reduce European taxes, Shein is banking on Poland

With new European taxes on small packages, Shein's low prices cost more! The Chinese group is therefore investing 500 million euros in its logistics platform in Poland to store more products in Europe.

To continue selling at low prices in Europe, Shein now relies on its Polish warehouses. The specialist in very low-cost fashion announced this Wednesday, November 4, an investment of 500 million euros to expand its logistics center near Wrocław.

This new expense brings the group's investments in Poland to one billion euros since its arrival in 2022. Its storage capacities in the region reach around one million square meters. The center is already operational. On the jobs side, Shein plans 2,000 additional positions, to increase from 8,000 to 10,000 people in Lower Silesia before the end of the year. More than 6,500 autonomous robots also participate in stock replenishment, sorting and order preparation.

The interest in these warehouses goes beyond the simple question of delivery times. Since July 1, the European Union has applied a duty of three euros to parcels worth less than 150 euros coming from countries outside the Union. A processing fee of two euros is added in November. For platforms like Shein and Temu, these amounts make it very difficult to maintain such low prices. A few extra euros can make a small order significantly less attractive, or reduce the seller's margin.

With stocks in Poland, Shein is therefore adapting its organization. Once goods are imported into the Union, their delivery to European customers constitutes an intra-European shipment. Levies on imported small packages therefore do not apply to this shipment. On the other hand, products remain subject to customs duties applicable upon entry into the Union.

Europe accounts for about a third of Shein's $42 billion in revenue. But customers are ordering less there: according to the Fable firm cited by Bloomberg, sales fell by more than 20% year-on-year during most weeks of September and October.

In the first half, the group's net turnover increased by only 1%, to $20.1 billion. The result fell by 53%, notably due to the increase in transport costs and the slowdown in its commercial activity. Shein, however, returned to a profit in the second quarter, after a loss in the first. These investments in Poland should help it control its deliveries and, above all, their costs. We now have to convince consumers to order more.

Machine-translated from French