The elusive founder of fast-fashion giant Shein made a rare public appearance in China this week, pledging deeper investment in the country’s garment heartland as the company faces intensifying regulatory pressure overseas.
Xu Yangtian spoke at the High-quality Development Conference in Guangzhou on Tuesday, hailing Guangdong province as the ‘fertile ground’ behind Shein’s global rise. The region, a manufacturing powerhouse and hub for China’s clothing production, remains central to the retailer’s ultra-fast supply chain model.
Xu confirmed Shein is investing 10bn yuan (£1.08bn) in Guangdong to build what he described as a high-tech fashion hub, designed to upgrade supply chains and boost factory efficiency. The investment was first announced in 2023, but his remarks marked a public recommitment to the province at a time when the company has been widely perceived as shifting its centre of gravity away from China.
In recent years, Shein has moved its headquarters to Singapore and pursued potential stock market listings in both New York and London, positioning itself as a global rather than explicitly Chinese business.
However, Xu told officials and business leaders that Shein would “remain firmly rooted in Guangdong and build a world-class fashion industry cluster,” crediting the province’s “world-class business environment” and “complete industrial ecosystem” for the company’s success.
According to Xu, Shein’s operations support more than 600,000 jobs locally, underlining the economic significance of its manufacturing partnerships in the region. The speech, which was live-streamed and widely circulated on Chinese social media, represents one of the few occasions the founder has addressed the public directly since the company’s rapid international expansion.
The appearance comes as Shein navigates mounting geopolitical and regulatory challenges. Trade tensions between Beijing and the West have led to increased scrutiny of Chinese-linked businesses, while US trade policy shifts, including the removal of a tax loophole for low-value parcels, have struck at the core of Shein’s cross-border export model.
In Europe, the retailer is facing formal investigation by the European Commission over suspected breaches of the bloc’s Digital Services Act (DSA). The probe will examine the alleged sale of illegal products, including childlike sex dolls and weapons, as well as concerns around the platform’s design and recommendation systems.
EU officials have indicated that they are assessing whether Shein’s platform architecture sufficiently prevents the sale of prohibited goods. The investigation will also scrutinise what regulators describe as the ‘addictive design’ of the service, including gamification, rewards programmes and bonus point mechanisms that may pose risks to users’ mental wellbeing.
The Commission is also examining Shein’s recommender systems, questioning whether they meet DSA transparency requirements. Under EU rules, platforms must provide users with an easily accessible alternative recommendation option that is not based on profiling. Officials have suggested Shein’s explanations of how its algorithms operate have been overly general.
The EU action follows controversy in France, where authorities previously considered suspending Shein’s services after illegal products were found on the site. While that suspension was not enacted, French officials have continued to press for stronger safeguards, including age verification and filtering measures to prevent minors accessing inappropriate content.
Public backlash in Paris has also accompanied the launch of Shein’s first concession in the country.
Xu’s renewed emphasis on Shein’s Chinese manufacturing roots appears designed to reinforce domestic support at a time when its global operations are under pressure. For a company that built its success on speed, scale and a digitally native model, the coming months may test whether operational efficiency can keep pace with regulatory complexity.
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