What the accounts show

Shein's UK division increased sales 26% to £2.58bn in its last financial year, pushing it past the British online retailer Asos, according to accounts filed at Companies House. Pre-tax profits at the unit rose 18% to £45.2m.

Other figures from the filings:

• •UK headcount rose to 113 from 91 a year earlier, mostly in sales and marketing.
• •The company paid £11.2m in current tax in the UK, up from £9.6m the year before, understood to be mainly corporation tax.

How Shein grew its UK sales

The company attributed the growth partly to a marketing partnership with the Wireless and Creamfields music festivals. It also took its brand into physical spaces, running a pop-up shop on London's Oxford Street and Christmas gift events in Edinburgh, Manchester and Liverpool as well as in the capital.

Pressure over the de minimis rule

The strong trading figures are likely to increase pressure on the UK government to bring forward action to change the de minimis rule, which has underpinned the rise of Shein and Temu. The model relies on shipping cheap clothes from Chinese factories to homes, keeping each order's value low enough to avoid import duties.

Governments elsewhere have already moved:

• •The US revoked its de minimis exception for Chinese-made goods last year, crimping Shein's expansion there and heightening fears of Chinese retailers dumping goods in the UK. Under the scrapped exemption, parcels worth less than $800 (£600) shipped to individuals had been spared import tax.
• •The EU began in July replacing its €150 de minimis relief with a flat €3 customs duty, phasing out the exemption for low-value parcels.
• •Former UK chancellor Rachel Reeves said she would abolish the UK rule, which lets overseas sellers send goods valued at £135 or less to British shoppers without customs duty, by 2028. Major retail bosses have said the government should move sooner.

After the Hong Kong listing

The UK results come weeks after Shein's global parent group listed on the Hong Kong stock exchange last month at a valuation of just over $26bn (£19.6bn). That figure was far below what had been expected several years ago, with investor concerns about regulatory changes weighing on the float. Shein had reached a $100bn valuation in an April 2022 fundraising round, when it was the world's third most valuable startup, and had considered a £50bn ($66bn) London float in 2024 before launching in Hong Kong.

Last week the group reported a 67% fall in quarterly profits to £173m in its first results since the float, blaming higher oil prices and freight rates linked to the war in Iran. The UK trading figures are likely to increase pressure on the government to bring forward its action on the de minimis rule, which Reeves has pledged to abolish by 2028 and which retail bosses say should change sooner.