From late May to early June 2026, China’s cross-border e-commerce faced an unprecedented regulatory storm in the European market.
First, Pinduoduo’s platform Temu was fined a hefty 200 million euros for violating the EU’s Digital Services Act (DSA). Later, fast fashion giant SHEIN was also fined approximately 22.5 million euros in France for multiple consumer rights violations.
Although the legal basis and specific reasons for these two penalties are different, they both send a clear and strong signal: the European regulatory agencies’ tolerance period for Chinese e-commerce platforms has ended, and compliance operations have become an unavoidable bottom line for survival.
This is not only a warning to the two companies, but also a “collective make-up lesson” for the entire Chinese overseas e-commerce industry.
The 200 million euro fine received by Temu this time is one of the highest penalties issued by the EU since the full implementation of the Digital Services Act, which is a milestone.
After a 19-month investigation, the European Commission conducted random inspections of platform products through “mystery buyers” and other methods, and found multiple problems such as potential electrical safety hazards in mobile phone chargers and excessive chemical substances in infant toys.
More importantly, the systemic risk assessment report submitted by Temu was deemed to be “just a formality” and failed to reflect its proactive risk control obligations as a “super large online platform”.
According to the DSA, platforms are no longer just trading intermediaries, but must assume “gatekeeper” responsibilities for product safety, information authenticity, algorithm recommendation mechanisms, etc.
If Temu cannot complete substantial rectification within the deadline, it may also face an additional fine of 6% of global annual turnover, which is a huge risk.
At almost the same time, SHEIN also received a new round of heavy fines in the French market, this time due to issues such as missing order information and insufficient fulfillment of the right to return.
This is the second consecutive year that SHEIN has encountered high penalties in France – it was fined 40 million euros for “false discounts” in 2025.
Behind the repeated fines are European regulators’ continued questioning of the sustainability of the “ultra-fast fashion” business model and their high sensitivity to the protection of consumer rights.
It is worth noting that the European Commission has launched a formal investigation into SHEIN, and it is not ruled out that it will also be identified as a VLOP and face strict supervision under the DSA framework in the future.
The two penalties may seem independent, but in fact they reflect the systemic challenges faced by China’s cross-border e-commerce in Europe.
On the one hand, the “ultimate low price + full custody” model represented by Temu has quickly occupied the market, but it has also posed hidden dangers in product quality and safety control.
It is difficult for a large number of small and medium-sized suppliers to independently bear the EU’s strict CE certification, REACH chemical substance testing and other compliance costs. In the early expansion stage, platforms often choose to “go online first, then govern”, which ultimately leads to concentrated risk exposure.
On the other hand, the “small order, quick reaction” fashion model represented by SHEIN has frequently encountered doubts in terms of environmental protection, data privacy, and consumers’ right to know.
The regulatory networks such as DSA and CSDDD (Corporate Sustainability Due Diligence Directive) built by the EU in recent years are systematically raising market entry barriers.
Looking at a deeper level, Europe’s strong regulatory actions also imply the logic of industrial protection.
Relying on supply chain efficiency and price advantages, Chinese e-commerce has had a huge impact on the local retail industry in Europe.
In the absence of direct competition through market means, it has become a rational choice for the EU to use regulatory tools to maintain market balance.
Environmental protection, safety, data, labor rights—these seemingly neutral regulatory areas actually constitute non-tariff trade barriers.
For Chinese overseas companies, this round of regulatory storm means a fundamental change in the logic of growth.
The era of “barbaric growth” that relied on traffic dividends, low-price strategies and scale expansion in the past is over. In the future, the core competitiveness of enterprises will increasingly be reflected in “compliance capabilities.”
This includes establishing a localized compliance team, investing real money in pre-inspection of goods, reconstructing a transparent and trustworthy supply chain traceability system, and truly transforming platform risk control from “inspection response” to “endogenous mechanism.”
In the short term, rising compliance costs will inevitably erode profit margins and may even force companies to adjust their pricing strategies; in the long term, only companies that proactively embrace the rules and reshape their business models can achieve stable and long-term success in the European market.
The fines issued by Temu and SHEIN are a landmark node in the process of China’s cross-border e-commerce going overseas.
It reminds all companies that there are no shortcuts in the global market. Respecting rules and embracing compliance is the only path to sustainable internationalization.
The sword of Damocles of regulation has fallen, and the companies that can stand out in this round of tests will be the companies that make real efforts for long-termism.
