E-commerce Surge: Temu and Shein Thrive Amid Regulatory Scrutiny in Germany

The e-commerce landscape in Germany is seeing a significant transformation driven by the explosive growth of Asian platforms Temu and Shein. According to reports, Temu has achieved an astonishing 285% growth rate in 2024, elevating its gross trading volume to 3.4 billion euros and securing a position as one of the top five online marketplaces in the country. Meanwhile, Shein, another prominent player, has marked its success with an 18% revenue increase, reaching 1.1 billion euros and advancing to seventh place in market rankings. This growth reflects a broader recovery in the German online retail market, projected to grow by around 3% in 2024, recovering from previous downturns.

Industry experts attribute the rise of these platforms to their competitive pricing and diverse product offerings. Lars Hofacker from EHI noted that both brands are leveraging consumer demands for affordability and variety. However, the rapid expansion of Temu and Shein comes amidst growing scrutiny regarding their business practices. Both companies are under investigation by the EU Commission for various alleged violations, including product safety concerns and compliance with consumer protection regulations. Specifically, the commission has launched formal proceedings against Temu for potentially addictive design practices and vendor compliance issues, while Shein has been criticized for offering misleading consumer information.

Despite these challenges, other German retailers, such as Otto, are also experiencing growth, with an increase in market share by 9%. The pressure on local businesses has prompted calls for stricter regulatory measures to ensure fair competition against these booming foreign platforms. As the landscape evolves, the success of Temu and Shein is reshaping the German online marketplace, showcasing both growth opportunities and significant regulatory challenges ahead.