Chinese fast fashion giant overtakes Asos as sales pass £2bn

Telegraph

a day ago

Shein has overtaken Asos in the UK for the first time as sales at the Chinese fast fashion giant surged to more than £2bn.
The fast fashion company revealed a 32pc jump in its UK sales in its latest financial year.
It meant its revenues surged by £500m in just a year from £1.55bn in 2023, according to accounts for Shein Distribution, its British subsidiary. The company recorded a £38m profit before tax, up from £24m a year earlier.
The figures mark the latest milestone for the Chinese fast fashion company, sending it further up the rankings of the largest British sellers ahead of online giant Asos for the first time.
It follows years of turmoil at Asos, which has been attempting to boost profitability again by cutting back its range and stopping customers from returning as many orders. It generated £1.33bn in UK sales in its latest financial year.
It comes after Shein overtook Boohoo in UK sales in 2023. Analysts have said Shein is 'sucking' sales away from both the British online retailers with its low-priced clothes. Shein sells dresses for as little as £2.99 and pyjamas for £2.
Louise Deglise-Favre, of Global Data, said: 'This strong performance reflects the brand's ability to combine ultra-competitive pricing with an enormous, constantly refreshed range of products that allows consumers to shop every micro-trend as it emerges.'
Asos was founded in 2000 with the name As Seen on Screen, selling clothing and accessories worn by celebrities on film and television. A year later, it joined the London Stock Exchange's junior Alternative Investment Market and in 2004 it launched its first own label range, with its designs proving a hit with celebrities including Michelle Obama and Rihanna.
However, the retailer has come under pressure in recent years amid fierce competition from cheaper rivals such as Shein, which launched in the UK in the mid 2010s.
Rival retail chiefs have complained for years over how Shein imports clothes into the UK, saying its method of shipping directly to customers from China allows Shein to pay much lower customs duty and undercut them on price.
Typically, retailers ship clothes in bulk into UK warehouses, paying all the relevant duties at the border. Companies, including Shein import smaller parcels which they fly directly to customers, meaning those packages do not incur customs charges.
Under the de minimis rule, products worth less than £135 are exempt from UK import duties.
In April, Rachel Reeves, the Chancellor, pledged to review the loophole. The US has already eliminated its exemption, with Shein's prices for American shoppers rising.
Shein, which was founded in China and is now headquartered in Singapore, has always argued that it is 'fully compliant with all tax policies and pays applicable taxes, including corporation tax, VAT and employment taxes'.
Shein has pushed back on claims that the de minimis tax exemption has allowed it to lower prices, saying its clothes are more affordable because of its 'on-demand business model and flexible supply chain'.
It has claimed that this model 'reduces inefficiency, takes out wastage of material and lowers our unsold inventory', adding: 'We pass this advantage to our customers and this has driven our success around the world, not the exemptions that retailers receive under current tax regimes.'
However, changes to global tax policies have come at a difficult time for Shein, which has been plotting a blockbuster market listing.