Chinese fast-fashion giant Shein has agreed to pay $100 million to settle a U.S. Federal Trade Commission investigation into delivery delays and other customer complaints, a source with direct knowledge told Reuters on Friday.
The settlement equals 44% of Shein’s second-quarter profit and adds to a regulatory and tax squeeze in Europe and the United States that has slowed the online retailer’s growth.
Shein, founded in China and headquartered in Singapore, said it had “reached a constructive outcome with the FTC” and that more information would be shared soon. The FTC has not publicly detailed the terms.
The company warned in July filings for its Hong Kong initial public offering that the probe could lead to significant payments.
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Consumers filed more than 12,000 complaints about Shein involving over $11 million in purchases between January 2020 and June 2026, according to FTC records reviewed by Reuters. Some customers told the FTC and the Better Business Bureau that packages marked as delivered never arrived and that customer service failed to resolve the problem.
The FTC has pursued similar cases before. Hey Dude, owned by Crocs, was fined $1.95 million in 2023 for failing to notify buyers of shipping delays and suppressing negative reviews.
Pressure on Shein is mounting elsewhere. The European Commission is still investigating illegal products sold on its marketplace, and France’s data protection authority fined it 150 million euros ($168 million) last year over improper cookie use. The European Union will add a 2-euro handling fee from Nov. 1.
Jefferies analysts said Shein’s app downloads across 10 markets fell 42% in September from a year earlier. Shein has raised prices as the United States and Europe closed customs duty loopholes, and Chief Executive Sky Xu said last month the company would develop more higher-priced brands to improve profitability.