Shein pours €500 million into European logistics as new EU fees bite

The investment and the site

Shein is putting €500 million, equal to $563 million, into its European operations, with the expansion centered on its logistics hub outside Wroclaw, Poland. The project adds storage capacity and deploys autonomous robots to speed order picking.

According to the company, headcount at the site will hit 10,000 before the year concludes. Shein has operated in Poland since 2022, and an accompanying company note also referenced 10,000 employees by the end of 2026.

Why now

Europe's tighter customs regime is raising delivery costs for low-priced imports. The European Union began charging a €3 duty on parcels under €150 on July 1, and an additional €2 handling fee takes effect this month. That combination pressures profit margins and challenges Shein's low-price pitch in a key market.

Sales in Europe have been sliding. Analytics firm Fable says that, year over year, sales fell over 20% during most weeks of September and October.

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Financial strain and company context

Operating income fell 53% in Shein's fiscal first half as the conflict in the Middle East lifted freight costs and growth in its core retail business slowed. Of Shein's $42 billion in revenue, around one-third originates in Europe. In September, Chief Executive Officer Sky Xu identified building more local inventory in the region as a priority.

The Singapore-based retailer, whose origins and factories are in mainland China, completed its Hong Kong listing on Sept. 1 after repeated delays. Since debut, its shares are down more than 20%.

What this means for your portfolio

In plain English: Shein is spending to move inventory closer to European customers to blunt rising import and shipping costs. The expansion could streamline deliveries, but comes as EU fees rise, European sales drop, and profits shrink - all while the stock trades below its listing price. Watch whether the new hub cuts delivery times and stabilizes margins as the tariff and logistics backdrop stays choppy.

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