Helen Reed
LONDON (Reuters) – French politicians are escalating their fight against Chinese online fast fashion retailer Shein, threatening to ban the sale of child sex dolls on its site, as the company plans to open its first permanent store in Paris.
After France's consumer watchdog discovered child-like sex dolls on Shane's platform, Finance Minister Roland Lescure on Monday threatened to block Shane's access to the French market if she ever sold such dolls again.
Shein said he imposed sanctions on sellers and introduced a ban on sex dolls. Paris prosecutors said on Tuesday they were investigating online shopping platforms Shein, Temu, AliExpress and Wish over the alleged distribution of content, including child pornography, on their marketplaces.
Shein, one of the world's largest fast fashion retailers, has already drawn ire among French politicians and retailers with its low-cost business model and, most recently, plans to open a concession store on Wednesday at Paris department store BHV. More stores will open later at Galeries Lafayette department stores in five regional cities.
After hearing about Chein's stores, Véronique Louvagi, France's minister of trade and small business until September, began organizing against them.
She called the president of Galeries Lafayette, the mayors of Angers, Dijon, Grenoble, Limoges and Reims, where Shein stores are planned, and the head of the French state bank Caisse des Dépots, which was to finance the BHV property deal, she told Reuters.
The campaign illustrates the coordinated efforts of French politicians, retailers and regulators to counter Shane's expansion and protect big retailers ahead of tough new legislation on online platforms that Shane fought against.
SHANE “DESTROYS STORES”
French lawmakers say Shein's rapid growth is driven by an unfair advantage: customs duty exemptions on low-cost e-commerce packages, allowing it to sell at rock-bottom prices. Meanwhile, French fast fashion chains such as Jennyfer and Naf Naf have gone bankrupt.
“Shane is affecting the vitality of our regions, destroying jobs and destroying shops,” Luwagi told Reuters.
Shane argues that its on-demand business model, where factories produce small batches and then scale up if the product sells well, is more efficient, and that its online marketplace could help French brands and retailers reach more customers.
Shane was approached about opening French stores by Société des Grands Magasins (SGM), which is trying to help the struggling BHV and regional department stores Galeries Lafayette and hopes the launch will attract a younger clientele.
But Galeries Lafayette said last month that Shein concession stores would go against its values, and on Tuesday it said it had agreed with SGM to terminate its franchising agreement, meaning the regional department stores would no longer carry the Galeries Lafayette name.
SGM has not yet decided on a new name for the five former Galeries Lafayette stores, the spokesman said.
“We believe in the Schein project,” said Karl-Stefan Cottenden, CEO of SGM, in an interview with BFM TV on Monday. “There is some controversy around it, but we also have a brand (Shein) with 24-25 million consumers in France.”
SGM and Shane seemed to agree with this controversy.
The billboard, unveiled Saturday above a BHV store in Paris's Marais district, featured a photo of SGM president Frédéric Merlin alongside Shein executive chairman Donald Tang and his dog Satchi, with the slogan: “The billboard we shouldn't have made!”
“Creating excitement is the way of doing business today, a more modern way of doing business,” Cottenden said.
Shein is trying to gain the trust of France.
He hired French leaders, including former Interior Minister Christophe Castaner, as advisers and sought to strike deals with French retailers, while Tan traveled the country, met with critics and attended meetings of the French elite, but was unable to turn the tide of criticism.
SHANE GIVES AN ANSWER
France has a stronger grip than many other countries on Shein, which was founded in China in 2012 and is seeking to go public in Hong Kong after failed listing attempts in New York and London.
French regulators fined Shein for misleading discounts and collecting consumer data without consent totaling 190 million euros ($221.58 million), more than in any other country.
And under a planned law to curb fast fashion, Shein could be banned from advertising in France and face fines for every item he sells. The law, passed by the French Senate in June, is being revised by lawmakers to bring it into line with EU law and could be implemented early next year.
The law specifically targets platforms that add more than 1,000 new products every day, such as Shein and its competitor Temu. Shane says the law will hurt consumers by making products more expensive.
Shein continues to lobby against the law. According to the letter seen by Reuters, Tan first wrote to MP Anne-Cecile Violland, who spearheaded the bill, on October 27, asking for a meeting.
FRENCH STORES: “A VERY SMALL TEST”
Shein's stores are a “very small trial,” Shein's spokesman told Reuters, rather than a broader shift to physical retail outlets.
His bet is that the stores will be able to draw a crowd and have a positive economic impact, giving them ammunition against critics.
Shane said the stores would create a total of 200 jobs and help the local economy, pointing to a pop-up in Dijon in June which he said attracted 27,000 visitors, more than half of whom particularly visited the city centre.
But BHV's opening prompted more than 20 brands to cut ties with the department store, while Disneyland Paris canceled a planned Christmas window display and store workers staged a protest. Caisse des Dépots walked away from the SGM-led deal to buy the BHV building, saying its investment was based on the values of promoting local and responsible business.
French retailers partnering with Shein have also faced backlash. In September, Shein announced a “Shein Xcelerator” deal with French fast fashion firm Pimkie, listing the brand on its online marketplace.
Two days later, the retail trade body Fédération des Enseignes de l'Habillement, which includes French retailers Kiabi and Celio as well as fast fashion giants Zara and H&M, announced it was kicking Pimki out.
CONCERN ABOUT CHINESE DUMPING
France is pushing for faster EU action to end customs exemptions for e-commerce parcels costing less than €150, as concerns grow that cheap Chinese goods are being dumped on the market and customs are failing to properly check compliance with EU law.
At a time when French politicians disagree on almost nothing, the spotlight on Chein has been constant, despite several changes in government.
Luwagi's successor as trade and small business minister, Serge Papin, told lawmakers last month that protecting big retailers was “a priority of my ministry.”
“These platforms are dumping, they don't respect our values and they don't care about our environmental ambitions,” he said. “We are going to mobilize together to protect ourselves.”
($1 = 0.8575 euros)
(Reporting by Helen Reid; Additional reporting by Inti Landauro and Alessandro Parodi; Editing by Susan Fenton)
