European Market Attracts Chinese Online Retailers: Potential Threat to German Trade Looms Large
**Growth Prospects for Temu and Shein in Europe**
In recent months, Chinese e-commerce platforms Temu and Shein have been making significant inroads into the European market, particularly in France and the U.K. According to reports, Temu's sales in the EU jumped more than 60% in early 2025, with France seeing nearly 100% growth from April to May. Shein, on the other hand, has seen EU sales rise nearly 20% in May, with the U.K. recording nearly 50% year-over-year growth.
These platforms' growth in Europe presents both opportunities and challenges for the local retail sector. Dr. Sascha Hoffmann, a professor of business administration and online management at the Hochschule Fresenius in Hamburg, sees the potential impact on the German economy as significant. He suggests that German e-commerce companies need to catch up in tactical pricing, personalization, and digital reaction speed to compete effectively with Chinese platforms.
One major concern with these platforms is their compliance with European quality and safety standards. Many products sold by Temu and Shein do not always meet these standards, which can lead to market imbalances and regulatory challenges. The EU Commission is currently investigating Shein and considering a package fee for shipments from third countries to reduce imported cheap goods.
However, Dr. Hoffmann does not view the current struggles of German e-commerce companies as a sign that the industry is wobbling. Instead, he sees the competition from Chinese platforms as a real risk that needs to be addressed. He believes that fair competition and real sustainability are the future for the German trade, emphasizing the need for a combination of digital excellence with European values and sustainability.
To maintain growth in Europe, Temu and Shein are exploring localizing their supply chains to overcome trade and logistical challenges. This strategy could help them address concerns about quality and delivery times while maintaining their competitive pricing. As consumers increasingly look for value-driven options, platforms like Temu and Shein are well-positioned to benefit. However, sustaining growth will require them to balance price competitiveness with quality and compliance standards.
The future growth of these platforms in Europe will depend on the regulatory environment. If stricter regulations are implemented to address quality and safety concerns, these platforms might face challenges. However, their ability to adapt and localize supply chains could mitigate these risks. The EU is not advocating for isolation but for a smart regulatory approach to Chinese online retailers, with tools such as the abolition of the customs-free limit, the obligation for digital traceability, and the promotion of European alternatives.
In conclusion, the growth prospects for Temu and Shein in Europe are very high, and the German e-commerce sector must address the competitive pressure from Asia. Europe needs a clever framework setting, ensuring fair competition and setting incentives for real sustainability. The future of online trade in Europe will be shaped by the balance between competitive pricing, quality, and compliance with European values and sustainability.
Although Chinese e-commerce platforms like Temu and Shein are making significant gains within the European market, their success has highlighted the need for local retailers to improve tactical pricing, personalization, and digital reaction speed to remain competitive. Furthermore, these platforms' growth brings opportunities for them to localize their supply chains to address quality and delivery concerns, thereby maintaining their competitive pricing while meeting European standards.
