As major Chinese e-commerce platforms Temu and Shein continue to expand rapidly across Europe, local industry players, national regulators and the European Commission have all raised warnings over how their continued expansion might distort the European market.   

While the European Commission discusses proposals to tighten regulations, some individual Member States have already started tightening their own national regulations in other areas of compliance.  

Local industry players highlight growing concerns

The Chief Executive of Poland’s largest e-commerce marketplace, Allegro, has become one of the most vocal critics of the rise of Chinese platforms in Europe. In recent interviews, Marcin Kuśmierz warned that European retailers are currently facing an influx of low-priced goods which could ultimately threaten their long-term survival.

Kuśmierz argued that with Chinese companies shifting their marketing budgets away from the United States, where tariffs and stricter trade rules have already slowed their growth, Europe has now become their primary focus.  

He called for the European Union to accelerate the introduction of stronger customs, safety, and taxation rules to ensure fair competition.

European Union set to take action  

The European Commission has already launched investigations into Temu and Shein.  Regulatory authorities are now examining whether the platforms have sold unsafe goods and, whether their consumer protection practices meet EU standards.  

Additionally, numerous reforms have already been proposed.   These reforms include: 

• Abolishing the €150 duty-free threshold that currently allows low-value goods to enter the EU without customs charges.
• Introducing a flat-rate handling fee on each parcel entering from outside the EU, to cover customs inspection costs.
• Tightening product safety checks, particularly for electronics and children’s toys.
• Holding online marketplaces directly liable for illegal or unsafe products sold by third-party merchants.

These proposals will require agreement amongst the EU Member States before they can be implemented. 

Further structural reforms are also being pursued. The long-awaited VAT in the Digital Age (ViDA) package, adopted earlier this year, is aimed at improving real-time digital VAT reporting, harmonising rules across Member States even further, and clamping down on fraud.  The individual measures contained within the ViDA package will be gradually implemented over the following decade.  

Platforms under the EU Digital Services Act

The Digital Services Act (DSA), which came into full effect in 2024, is adding further pressure on large online marketplaces.

Temu has been accused by EU regulators of failing to properly assess and address the risks of illegal and unsafe products from appearing on its platform, particularly in relation to counterfeit goods and products marketed towards children.  A preliminary ruling by the European Commission in July 2025 indicated that Temu had in fact breached the provisions of the DSA.  

Shein has faced a separate investigation under the DSA over misleading pricing practices, including the use of ‘dark patterns’ in order to encourage buyer engagement.  Shein has been issued with a formal warning by the EU Consumer Protection Cooperation Network and European Commission, with further investigations underway.  

Under the DSA, fines for violations can reach up to 6 per cent of a company’s global turnover. 

National compliance measures intensify

In the meantime, some Member States have also introduced national measures to regulate their own domestic markets.  

In Poland, local authorities have strengthened enforcement of Extended Producer Responsibility (EPR) regulations by requiring affected businesses to register with the Baza Danych o Odpadach (BDO), a national registry to track EPR compliance.  This applies to businesses selling packaged goods, batteries, goods containing batteries, and any electrical or electronic products.  

The EPR regulations are further supplemented by a requirement for overseas businesses to appoint a local authorised representative based in Poland in order to ensure compliance.  Online marketplaces such as Amazon and Allegro are now cross-checking registration details against the BDO database in real time.

Outlook

For ecommerce sellers, particularly those based outside the EU, the regulatory landscape is becoming more complex.  It is now more important than ever to ensure that all compliance requirements are met, including regulatory areas such as VAT, EPR, product safety standards and certification.   

Those who adapt early to regulatory changes will be best placed to navigate the changing European market landscape.