Shein lost $99m (£74.1m) in the first three months of the year, compared with revenue of $395m a year earlier, the fast fashion group said in a pre-market filing in Hong Kong.
The company, which is headquartered in Singapore but was founded in China, said the removal of the US exemption for import duty on low-priced packages has reduced sales.
“The removal of the US de minimis exemption had a negative impact on our sales in the US and overall growth in our net income,” Shein said in the filing.
The de minimis exemption allowed goods valued at $800 or less to enter the United States without paying duties. American consumers have used it to buy low-cost goods from online retailers including Shein and Temu.
President Donald Trump signed an executive order ending the exemptions worldwide, which took effect on August 29, 2025. It extended the president’s previous action targeting cheap products from China and Hong Kong to cover the rest of the world. The White House said the global exemption is being used to “avoid pricing and importing deadly synthetic opioids” into the US.
The order also raised costs for UK exporters sending low-value goods to the US market.
Shein said he is considering how to respond to high-profile cases. “Due to increased duties and taxes, we are pursuing a variety of options, including increasing our prices in the US market to offset a portion of the increased costs,” the company said in a filing.
Paper losses on investor shares
The first quarter figure partially reflected a $328 million paper loss resulting from an accounting change related to special investor shares. Those shares can be converted into common stock at a later date, and their value can move before listing.
Shein also said the war in Iran has hit demand, increased costs and delayed deliveries to other markets. Uncertainty remains over the US-China tariff dispute, which has been temporarily suspended.
The filing showed that in the year to the end of March 2026, Shein had 281 million active customers, an increase of more than 16 percent last year, who placed more than a billion orders.
Listing of Hong Kong
The China Securities Regulatory Commission approved the Hong Kong share sale on July 10, after failed attempts to list in New York and London. Listing is expected in the coming months.
The filing did not provide details on the size, timetable or price of the initial public offering.
Shein had targeted the third quarter of 2025 for a London listing worth around £50bn, but put those plans on hold after US tax changes.
The EU levy comes into effect
Earlier in July, the European Union imposed a tax of 3 euros (£2.56; $3.42) on low-value e-commerce sales, targeting what the bloc said was unfair competition from China.
The European Commission said the temporary duty applies from 1 July 2026 to parcels worth up to €150 imported from outside the EU, and is levied in tax categories rather than per item. It runs until July 2028.
The UK has taken a slower route. The Government has confirmed that it will end the £135 de minimis Customs exemption, but only until 2029, citing the need for gradual change to avoid disruptions at the border. Helen Dickinson, chief executive of the British Retail Consortium, said in June: “Every day the government delays introducing a new duty-free scheme is another day that hurts British businesses.”
A Treasury spokesman said the changes “support our businesses to compete and grow, manage the security and flow of goods across our borders, and keep the UK in line with our international partners”.
