Temu and Shein are under scrutiny in Germany as the HDE commissioned IW Consult study finds they cause significant retail sales losses, estimated at about 2.5 billion euros annually, with total economic impact twice that once you include upstream effects like rents, energy, and wages.

More than 40,000 German jobs, mostly in retail, are said to be at risk due to ongoing growth of these platforms, with foreseen declines in employment in the medium term.

Policymakers, industry groups, and consumer advocates call for tougher regulation and stronger consumer protections, citing concerns over product quality, weak controls, and unfair competition.

The HDE argues that purchases shifting to these platforms erode tax receipts and harm domestic suppliers, urging stronger regulation and enforcement against Temu and Shein.

Tax revenue losses could reach up to 420 million euros annually for federal, state, and local authorities, if purchases were made in German shops instead of on the platforms.

Additional state-level impact includes missed tax revenues of up to 420 million euros per year when shopping happens through the platforms rather than in German commerce.

The HDE again calls for harsher measures, including possible import bans for serious violations, while stressing that regulated German retailers operate in full compliance.

EU-wide actions include a new processing fee starting in November on imports from non-EU countries, with an initial 3 euros per package until a digital platform is introduced, alongside ongoing investigations into Temu and Shein for potential breaches of EU law and antitrust concerns.

Germany’s Bundeskartellamt is examining Temu for possible illegal price-fixing concerns.

The EU is reviewing Temu and Shein under digital services and competition rules, while Germany’s antitrust authority evaluates Temu for anti-competitive pricing practices.

A representative 4,000-person consumer survey shows 51% of Temu and Shein buyers would have purchased the same items elsewhere at the same price, and 19% would spend more if the platforms did not exist.

IW Consult’s February survey of 4,000 consumers formed the basis of the analysis for the HDE, indicating 51% would switch to other retailers at the same price and 19% would spend more without Temu and Shein.