Every day, Shein and Temu deliver 460,000 parcels to Germany. As both platforms violate several EU regulations, this leads to unfair competition for retailers in the country. According to a recent study, this results in an annual loss of added value for the German economy of 2.4 billion euros.
This is according to a study by IW Consult commissioned by the German Retail Federation (HDE). In February, up to 4,000 German respondents between the ages of 16 and 69 were interviewed. Of the Shein and Temu users among these respondents, 51 percent said they would buy the same products at the same price if they were not available on Chinese platforms. And 19 percent would even be willing to pay more.
Unfair competition
Because of this, the popularity of these Chinese platforms is costing German online retailers revenue. Temu and Shein have often been criticized for their dangerous goods and also for not meeting European legal and regulatory requirements. Local sellers must comply with these regulations, which for 90 percent of them is a significant or very heavy burden. This results in unfair competition.
Loss of jobs and tax revenue in Germany
HDE even stated that more than 40,000 jobs were lost in Germany because of Temo and Shein. This represents 28,300 jobs in the retail sector alone. “If Temu and Shein did not exist, a large part of the purchases would be made in German retail stores. This would require more employees,” explained Marco Trenz, an economist at the German Economic Institute.
“If these purchases were made in German stores, income tax, trade tax and corporation tax would be paid.”
This leads to more side effects. Federal, state and local governments also lose around €420 million in tax revenue annually as a result. “If purchases were not made on Temu and Shein, but in German brick-and-mortar stores, income tax, trade tax and corporate tax would also be payable,” Trenz emphasized.
‘bleak future’
“The current figures clearly illustrate the seriousness of the situation: Massive violations by Temu and Shein are causing widespread damage to the retail sector and the entire German economy. If politicians do not finally take decisive and tangible measures after years of inaction, I see a bleak future for Germany as a business location. If nothing else works, such massive violations must be stopped. Competition is good, but it must be fair,” said Alexander Preen, President of HDE.
The federation wants customs authorities to increase enforcement pressure. This could be similar to the recent targeted inspections carried out in France on imported land. Up to 75 percent of imported products in this country did not meet EU standards.