Shein: Consumers send a message and analyst sees a trend that could affect the company

Data on small-value imports and ongoing taxation of cross-border e-commerce likely point to a slowdown in Shein’s growth in Brazilsaid Santander analysts this Friday (26).

The trend, according to the bank in a report signed by Ruben Couto and his team, would be positive for local companies, especially clothing retailers, such as Renner (LREN3), HERE (CEAB3) It is Guararapes (GUAR3), which have been most threatened by foreign companies.

According to data released by the Central Bank earlier, small-value imports totaled US$701 million in April, down 20% year-on-year, marking the first low since May 2020.

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Shein consumers ‘send a message’

For Santander, in addition to the environment of inflation and high interest rates, the drop in small-value imports in April may have been influenced by a increased consumer concerns about possible taxation of products, as the Brazilian government is now being clearer about changes in cross-border purchases.

Analysts add that, as reported by Valor Econômico, the Ministry of Economy and the Federal Revenue plan to propose changes to the current Brazilian system of cross-border purchases, with the main objective of introducing the payment of import taxes at the time of purchase.

“As discussions regarding the taxation of international e-commerce materialize, leading to an increase in the prices of these products, there could be continued headwinds for companies such as Shein, Shopee and AliExpress, positively impacting local businesses,” the analysts underlined.