In a stunning shake-up of the global retail landscape, the Chinese fast-fashion behemoth Shein has dethroned long-standing giants to become the world's number one player in terms of market share. According to data from GlobalData, the less-than-a-decade-old company is not only the largest but also the fastest-growing player, having gained the most market share over the past year.
The New Kings of Fast-Fashion
This dramatic rise has pushed the previous sector leaders, Zara owner Inditex and Swedish giant H&M, down the pecking order. Zara now holds the position of the second-largest player globally, followed by H&M in third place. Shein's ascent to the top has been largely powered by a significant jump in its market share across Europe, turning what was once a competitive challenge for Zara and H&M into a full-blown 'Chinese problem' spreading across the continent.
The situation has been exacerbated by a major redirection of global trade flows. Former US President Donald Trump's intensifying crackdown on Chinese imports has effectively rerouted a 'tsunami' of low-cost goods away from the United States and into Europe. This shift, as reported by the Wall Street Journal, represents one of the most dramatic rewiring of trade routes since the US-China trade war began.
Trade War Reroutes a 'Tsunami' of Parcels to Europe
The catalyst was Washington's move in May to shutter a key customs loophole known as the De Minimis rule. This rule had allowed low-value parcels to enter the US from China with minimal duties and scrutiny. Following its closure, exports of these low-value parcels from China to the US plummeted by more than 40%.
In a direct response, shipments to Europe have skyrocketed, more than offsetting the nearly 20% contraction in US trade. This surge has helped push China's global trade surplus past the $1 trillion mark for the first time this year. For the first time ever, the European Union has surpassed the US as the top destination for China's vast 'cheap package blitz,' estimated at over $100 billion.
The impact is being felt not at major ports alone but in the suburbs of Europe. A sprawling 'shadow logistics' network has emerged, enabling Chinese sellers to slash delivery times and undercut commercial warehouses, often charging as little as 70 cents per package.
Logistics Gold Rush and European Backlash
Fueling this unprecedented surge is a fleet of new cargo airlines creating what they term a 'modern Silk Road.' The volume is so immense that cargo carriers are being forced to seek secondary hubs to avoid congestion. For instance, British startup One Air recently relocated its operations from London to the more rural East Midlands Airport, which had to redraw its parking layout over the summer to accommodate the flood of Chinese freighters.
European retailers are sounding the alarm, warning that this unfair competition threatens their very industry. Guillaume Gibault, founder of the French underwear brand Le Slip Francais, highlighted the stark price disparity to the WSJ: 'We sell at a price point of around 15 euros for a pair of underwear, where Shein and other Chinese platforms will sell five pairs for the same price,' he said. 'It puts in the mind of the customer that the price doesn't mean anything anymore.'
The tension has escalated to the highest political levels. French President Emmanuel Macron recently revealed that he threatened Beijing with tariffs during his state visit to China if no action was taken to reduce the EU's ever-widening trade deficit with China. 'I tried to explain to the Chinese that their trade surplus is unsustainable because they are killing their own customers, particularly by no longer importing much from us,' Macron stated in an interview with French daily Les Echos.
The rapid rise of Shein and the diversion of cheap Chinese goods are creating a perfect storm in Europe, minting new millionaires in logistics while overwhelming local regulators and traditional retailers who are struggling to compete. The continent now finds itself on the front line of a major global trade battle.
