Jakarta, CNBC Indonesia \u2013 Chinese e-commerce giant Shein once sent\nshockwaves through Indonesia\u2019s micro, small and medium enterprises\n(UMKM) industry. The service, together with Temu, used a business model\ndeemed capable of \u2018killing\u2019 the survival of local UMKM.<\/p>\n
Shein and Temu sold goods directly from factories to end consumers\nwithout any intermediaries. As a result, the products could be sold\nextremely cheaply, disrupting the climate of healthy competition.<\/p>\n
The government intervened directly by banning Temu and Shein from\nentering the Indonesian market. However, Temu and Shein had previously\nflourished in international markets before eventually being struck by\nthe administration of Donald Trump.<\/p>\n
Trump scrapped the \u2018de minimis\u2019 policy that had long benefited Shein\nand Temu. The de minimis policy exempted import duties and taxes for\nlow-priced imported goods.<\/p>\n
Following the policy\u2019s removal, Temu and Shein could no longer sell\ngoods at extremely low prices, as they now had to pay costly import\nduties. The two e-commerce giants also faced regulatory challenges in\nseveral countries besides the United States.<\/p>\n
As a result, Shein\u2019s business began to falter. The company suffered a\nquarterly loss of up to US$99 million (around Rp1.7 trillion) due to\nslowing sales.<\/p>\n
Its pre-IPO financial report documents stated that Shein recorded a\nloss in the first quarter (Q1) of 2026, as quoted by Reuters on Monday\n(27 July 2026).<\/p>\n
The loss came after the company had previously booked a net profit of\nUS$395 million (Rp7.1 trillion) in the preceding year.<\/p>\n
Shein has obtained approval from China\u2019s Securities Regulatory\nCommission and is scheduled to list its shares in Hong Kong on 10 July.\nHowever, the Singapore-headquartered company did not disclose the size\nof the share offering, offer price, or the estimated proceeds of its\nshare sale.<\/p>\n
Battered by De Minimis Rules in the US and Europe<\/p>\n
Shein has indeed had to endure difficult times after the United\nStates revoked the tariff exemption for low-value goods, coupled with a\nsubstantial one-time accounting charge.<\/p>\n
The de minimis rule previously allowed packages valued at less than\nUS$800 (around Rp14.4 million) to enter the United States without import\nduties.<\/p>\n
With the exemption removed, Shein said Chinese-origin products sold\nby the company, whether directly or through marketplaces and shipped to\nthe United States, are now subject to tariffs ranging from 10% to\n87.5%.<\/p>\n
The company acknowledged that the removal of the tariff exemption had\na significant impact on overall growth, ultimately contributing to\nincreased expenditure.<\/p>\n
To cope, Shein is considering various options, including implementing\nspecial price increases for the US market.<\/p>\n
\u2018In response to the increased duties and taxes, we are considering a\nnumber of options, including raising prices in the US market to offset\npart of the increased costs,\u2019 Shein wrote.<\/p>\n
Beyond the United States, Shein\u2019s key market in the European Union\nhas also imposed a \u20ac3 import duty on low-value e-commerce imports.\nAccording to the European Commission, this policy was introduced as a\nmeasure to curb unfair competition from Chinese-origin products.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/chinese-e-commerce-giant-shein-once-banned-in-indonesia-now-faces-a-precarious-future-1785153112", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }