6 days ago
Nearly 60 per cent of Quebec businesses report drop in sales amid rise of fast-fashion retailers
Logos for PDD Holdings Inc.s Temu, top, and Shein on smartphones in Shanghai, China, on Feb. 3, 2025.
Quebec retailers are sounding the alarm over what they say is an invasion of the marketplace from foreign competitors who don't play by the same rule book.
One of those platforms is Shein, a Chinese vendor that is usually only present online. But this summer, the e-retailer opened a three-storey pop-up store in downtown Montreal.
The online store and another one like it called Temu, also from China, launches thousands of new products online daily and, since it is based outside Canada and only present online, pays no taxes in Canada or Quebec.
'When you see, for example, Zara or H&M, they are doing between 100 and 200 new products each day. But when you look at Shein, we're speaking of 7,000 a day. So it's not the same game,' said Damien Siles, director general of Quebec's retail council, the Conseil québécois du commerce de détail, (CQCD), in an interview on Thursday.
The pop-up comes as CQCD has released a study of its members that showed 58 per cent noticed a drop in sales since the emergence of so-called fast-fashion brands like Temu and Shein. According to the survey, 17 per cent said the decline is significant.
The survey includes responses from 37 CQCD members, representing 1,500 points of sale and outlets in Canada.
Nearly one-third (30 per cent) say they have modified their sales strategy and 13 per cent reported having to reduce their staff as a result of the foreign e-retailers.
In a brief for pre-budget brief consultations in anticipation of the next federal budget, the CQCD accused the fast fashion industry of flouting environmental standards, driving 'opportunistic consumption,' and circumventing Canadian tax, product safety, and labour laws.
'When it comes to product safety, Quebec companies must comply with clear and monitored standards. For example, toys intended for babies must meet strict criteria for non-toxicity, absence of small detachable parts, and mechanical strength,' the brief noted.
'However, several journalistic investigations and independent studies have highlighted recurring cases of non-compliance in toys for young children sold on Temu, including the presence of banned substances such as phthalates and choking hazards. Local retailers bear the costs of compliance and safety while these products circulate freely via these platforms without prior certification or responsibility for their safety.'
According to CEFRIO's NETendances report (2024), 55 per cent of Canadian online shoppers made at least one purchase on a Chinese platform between 2023 and 2024. In Quebec, that figure was 40 per cent, putting the platforms just behind Amazon in terms of popularity, with many items on Shein and Temu selling for up to 40 per cent cheaper than its direct competitors.
'The price suggests the potential for a lasting change in consumer habits, with direct effects on local retail trade,' the retail council stated.
'This trend calls for vigilance, as it is part of a structural shift that could increase pressure on Quebec retailers, who are already weakened by an uncertain economic environment and increasingly aggressive digital competition.'
