Shein accused of breaking EU law
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Hello and welcome to World Business Report on the BBC World Service. We'll be with you again today. Great, as always, to have your company. In a moment, we're going to be joined live from Brussels by Europe's top consumer watchdog to ask why the 27-nation European Union bloc seems so concerned by the Chinese fast fashion retailer, Shein. Also on the programme today, we'll cross live to the Ivory Coast as leaders build up there to the announcement of...

of a new leader for the African Development Bank. And what's the point of a so-called golden visa? We're looking for smart people with great connections who are passionate about business and growing business. And we are seeing those people interested in New Zealand. Yeah, more on New Zealand's new visa aimed at attracting wealthy business leaders to the country and why they're seeing a surge in applicants from the United States. That's what's come a little bit later on here on World Business Report. Let's

Let's start today, though, talking fashion, because since its entry into the market, well, less than two decades ago, unbelievably, China's Xi'an has gone from being a scrappy upstart looking to disrupt the big global players to perhaps the dominant player in that most lucrative of markets, young people shopping online. Challenged by regulators around the world over its supply chains, though, how it treats its workers, its environmental credentials, and most recently, feeling the squeeze over whether it's

parcels should face tariffs when they land at their European, American and British customers' doors. The company feels of something in the crosshairs of many of the business world's biggest regulators right now. In a moment, we'll be live in Brussels to hear from one of them. But first, Ria Blatrache in Paris spoke to these Sheehan shoppers about what makes it so popular.

I see that they try to copy certain brands.

And this is why I think a lot of people like this shape. For people, I guess it's because it's cheap and it's easy and it comes in two seconds. So I'd say that's the attraction. What do you think of the website? Well, the website is brilliant because you find everything in one...

one minute. So I think the website is made for people to buy more. There it is in a nutshell from Rehab Le Trache's chat there with some of those shoppers out in the streets of Paris today. Quick and easy been the secret to its app. Well, today, though, the company's regulatory troubles have deepened again. The European Union's been accusing the brand of

...of offering fake discounts, pressure selling and other practices... ...it says breaches law in various European countries. The bloc has given the company one month to respond to its findings... ...or face fines based on its sales in those EU countries... ...where it claims the law has been breached. In response, Sheehan's told the BBC... ...our priority remains ensuring that European consumers... ...can have a safe, reliable and enjoyable online shopping experience... ...and told us it was working constructively with national consumer authorities...

and the EU Commission to demonstrate our commitment to complying with EU laws and regulations. Well, one of those they're referring to, the biggest of them, in fact, is the European Consumer Organization, the BEUC. It's the umbrella group for 44 independent consumer organizations from 31 countries right across Europe. And Agustin Reiner is their Director General and joins us live on the program. Mr. Reiner, thanks so much for being with us on World Business Report.

Thank you for having me. Talk us through in a bit more detail then your concerns today with Xi and just spell them out for us.

Yes, like you indicated a moment ago, the European Commission has opened this investigation and have taken a position together with all the national regulators in relation to several practices, which basically induce consumers to continue spending money on the platform. The reality is that chain has grown significantly over the last years exponentially, one could even argue.

And that brought a lot of challenges for consumers. So while on one hand it's extremely easy to use, as we hear from the different testimonies, we also have identified practices that lead to overconsumption and even to mislead consumers as to, for example, their rights under European law. For example, if a product is

is effective whether you can return it receive a refund and also being able to contact the company if something goes wrong just explain how that's different though to say i mean all apps now instagram any of the meta products all american products of course most apps are literally designed aren't they to keep people on there and most shopping experiences are designed

to keep you shopping there and keep you moving around and buying another thing. Even if you shop at any supermarket in Europe, you'll come to the end and they'll ask you, haven't you forgotten to add this into your basket as well? Almost every retailer on the planet is doing this. Why is it a particular problem with this one?

Indeed, I think this one is one of many. This is a widespread phenomenon, what we call dark patterns. So these platforms, they design the user interface to keep consumers hooked, either consuming news or content or continuing buying. I think what makes Shane special is the scale.

They are basically getting in every single phone of consumers. And on top of deploying this type of practices, they are also exposing consumers to dangerous products. For example, many of the testing conducted over the clothes and garments bought through Shane contains illegal chemicals. And consumers are simply not aware of this.

At the same time, SHAME, together with Temu, became one of the largest platforms to ship products into the EU. But it's extremely difficult to police all these products because they enter via tiny parcels. And we are talking about, between Temu and SHAME, over 12 million parcels a day that are entering into the European Union, which are extremely difficult, as you can imagine, to police and verify.

And last week we were talking about that on the programme as well. Changes to that, perhaps charges a couple of euros to people bringing those in to try and aid a bit of that policing isn't there as well. Just in terms of those, I hear exactly what you're saying, Mr Rayner, in terms of standards and you want to keep people safe as well. But the other side of it, just the fact that it's successful and it sells a lot of stuff. I mean, would you be doing this if this was a European company? Is this just because it's a Chinese company?

No, I don't think it's because SB is a Chinese company. We have legislation that we expect everybody to comply with these rules. And for example, when the National Consumer Organization, they test products, they also compare to what is available in the domestic markets.

And something that we have identified is that many of the products bought through these Chinese online marketplaces are non-compliant, while the same products or the same type of products that we find, let's say, in brick and mortar shops...

are compliant. So here we have a clear... So you're kind of saying it's an unfair advantage, basically. It is an unfair advantage for the European companies or those, not only European companies, those companies that are trying to comply with the rules here in Europe and in the UK. Your messaging is going to have to be pretty careful on this as well, isn't it? I mean, we heard from those shoppers there in Paris, this company doesn't just have customers, it

It has fans. People love it, love its ease, love its prices. They're going to be pretty disappointed if it suddenly gets expensive or you start blocking them from shopping. That's an interesting question, whether it will become expensive, especially once this levy is introduced. For the same, it could be that the platform will absorb this additional cost. But I think what is extremely important, and if people will know that the products that they're buying are unsafe, perhaps they will not buy them in the first place.

And the popularity of a platform or of a brand should not be a reason to allow them and let them off the hook. If they're not complying with European standards, they need to be held accountable. And hopefully they will improve and they can continue providing their services in a compliant manner.

Yeah, interesting to see whether that spreads as well. We know that that is an issue across a number of areas, including digital platforms too, but I know those aren't necessarily your area of specialisms as well. Mr. Rayner, thanks so much for your time this afternoon. European Consumer Organization Director General, the BECU, that organization, Agustin Rayner there speaking to us from Brussels. Well, Sky Canavis is also with us. Sky is the Principal Analyst for Retail and E-Commerce at eMarketer. Sky, welcome back to World Business Report. Great to have you.

Great to be back. Thank you. Just that last point that Mr. Rainer was making there, what do you think might happen to prices with all of this? Well, in the short term, they're not likely to go up very high. We're looking at a very small fee that is being introduced of two euros. And that's really unlikely to deter shoppers because their basket sizes are a little bit bigger than that.

And so instead, I think this provides some additional revenues for the EU to support the handling of the large volume of packages from e-commerce players like Shein. We've seen that that number skyrocketed to something like 4.6 billion in the EU entering in 2024.

those packages. This wider issue, though, about standards and things like that, that Mr. Rayner was just talking about there and saying, oh, it doesn't meet loads of the standards that we would expect manufacturers and retailers to meet here in Europe. And if they don't do it, we're going to fine them and all that. Those kind of issues as well. I mean, that evidently is going to make things more expensive if they've got to run more checks, have more people perhaps doing that. It presumably is going to have some kind of impact on the price.

Yes, in the long term, but in the short term, they're still primarily focused on moving these very inexpensive goods. We haven't yet seen a lot of penalties imposed on these companies for the very inexpensive products that they're bringing in.

So in terms of that longer-term accountability requirements or requiring them to comply with regulations on the products themselves and move them into compliance, that's a lot more challenging. What do you think, Sky? Because lots of our listeners all around the world, not just in Europe, but perhaps they're in North America, in Africa, listening today in Asia as well, will use this company every day and love it and be really worried about

about what's happening to it because it feels a little bit. I mean, would you say that was a fair question I put to Mr. Raynard, that it feels like it's being picked on here in a way that other companies don't seem to have the same kind of scrutiny on them? I think the scrutiny is fair because there are a lot of questions about the sourcing and the transparency and particularly in markets where

where regulators have requirements around sourcing and transparency that they may not face in other parts of the world. So one of the challenges they face, and I think at least Pinduoduo has talked about it in relation to Timu, is meeting those local requirements.

Absolutely.

And should stress again, for those who perhaps joined the programme brand new live as well, that we read out a statement from Sheehan earlier. They are absolutely stressing that they're willing to work with all the European authorities on exactly what Sky was talking about there as well to try and meet some of those rules and regulations. Fascinating area. Sky, thanks as always for your time. Sky Canaves there, Principal Analyst for Retail and E-Commerce at eMarketer. Well, Fiona Sincotta is also with us as always on a Tuesday, Senior Market Analyst at Citi Index. Fiona, great to have you back on the programme too.

Hi, thank you. Quick thought on Sheehan because it's not just been regulators in how it sells. It's, of course, been looking to kind of float its shares and IPO, as it's known, somewhere around the world. And it's been finding that difficult with regulators too. Yes, that's right. Although it did get approval here in April 2025 by the Financial Conduct Authority to pave the way for a potential listing on the London Stock Exchange. It moved its attention here after initially looking to IPO,

back in 2023 in the U.S., but because of regulatory scrutiny over its supply chain practices, that process stalled, and that's why we saw a tension shift towards London. Quick other thought of a bit of market news today, a story we talked about a lot in the program, Japan's Nippon Steel, according to CNBC, the U.S. network, getting pretty close to buying U.S. steel. This would be an interesting move against the backdrop of tariffs, protectionism, all of that kind of geopolitical policy. Yeah.

Yes, definitely. I mean, we've seen sort of a bit of a turnaround with apparently sort of approval from Trump. The partnership would supposedly create around 70,000 jobs in the US and add a $14 billion US to the US economy, according to Trump. So we can see why he's suddenly back

backing this move. It does sort of support his views of bringing things to the US. Yeah, sure. There'll be more on the late edition of the programme if and when we get confirmation of that with Ryle Tandon and the team here on the late edition of World Business Report. Fiona, as always, thanks so much for your time. Fiona Sincotta of Citi Index here in London there.

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You are with World Business Report on the BBC World Service.

Well, the search for a new president of the African Development Bank concludes later on this week at their annual congress in Abidjan in the Ivory Coast. It's happening at a time, of course, against that backdrop that we were just talking about of tariffs, the biggest kind of challenge really ever to multilateral lenders perhaps that they faced, including funding cuts from the United States government, Washington cutting more than half a billion dollars apart of some of those changes to USAID programs. The current head...

Dr. Akinwumi Adesanya will step down from his position at the end of August and in the last few hours. He's been addressing leaders at the Congress. The high fight of the bank to light up and power Africa, to feed Africa, to industrialize Africa, integrate Africa, and improve the quality of life of the people of Africa have been transformational for Africa. Excellencies, ladies and gentlemen.

In the past decade, the work of the African Development Bank has impacted the lives of 565 million people. The African Development Bank financed over $55 billion in support of infrastructure from roads to rails to airports to seaports to digital and communications, health, water and sanitation.

There's the scale from the outgoing head of the African Development Bank, Dr. Akinwumi Adesanya. Well, let's get a sense of some of the runners and riders who might replace Dr. Adesanya. And journalist Zawadi Madibo joins us live from the Congress in Abidjan. Now, Zawadi, great to have you on the program. Thanks for being with us.

Thank you, Will. How are you? Yeah, good, thanks. The scale set out well there, wasn't it, by Mr. Adesina? 565 million people, $55 billion in investment projects, and yet still quite an entry for whoever takes over, right?

Right, right, right. You said it right. And, you know, a new head of the institution has two fundamental issues to deal with. And the first is financing. He must also, you know, be able to find mechanisms to diversify financing sources.

in order to guarantee economic and social development, which is the core mandate of the African Development Bank. Most loans, as you are aware, or forms of financing from the World Bank or the International Monetary Fund demand the implementation of structural adjustment programs like cutting of public expenditure,

privatization of public institutions. These measures more often than not are meant to guarantee a country's ability to pay back loans borrowed. Unfortunately, the downside is that they

They potentially undermine provision of essential services like education, health care, and also deep inequalities in the long run. And the other one is debt, which whilst the bank is not likely to refinance debt, it must also continue to advocate for debt restructuring, as well as strengthen partnerships among African countries to address pressing challenges such as climate change.

and also biodiversity loss. So these are really, really important issues. Some job. We'll talk about that debt in more detail in a moment. Who are the people up for this challenge, Zawadi? Who are some of the kind of key runners and riders?

Yes, so we have five contenders. We have a Zambian economist with a long career with the World Bank, Dr. Samuel Maimbo, who's currently the vice president for budget performance review and strategic planning at the World Bank in Washington. We have Ta Sidi, a Mauritanian banker and outgoing president of the Arab Bank Foundation.

for Economic Development in Africa, based out of Riyadh in Saudi Arabia. We have a Chadian economist from Chadia, that is Tony Abbas Mahamat. He's also a former governor of the Bank of Central African States.

We have a Senegalese gentleman, Amadou Hot, who has until recently been a board member of the African Export and Import Bank or Afrexim Bank and a former minister of economy and planning for his country. And finally, the only lady in the race, South African Swazi Shabalala.

initially the vice president for finance at the African Government Bank and now a senior vice president in the executive office of the president of the bank. Quite a wide field there. We'll get a bit of a sense, maybe a bit of crystal ball gazing from Zawadi in just a moment. Let's focus on that debt issue that Zawadi was mentioning just a moment ago. It's something we talked a little bit more about to Bright Siemens. He's an economic analyst at Imani, a Ghanaian think tank.

There are certain types of projects that traditional commercial banks wouldn't touch at all because they're not profitable. Building schools in rural areas or, for example, building clinics for the destitute or rural inhabitants in an African country. This is not something that Dutch banks usually would want to be involved in or

Or Barclays. But the African Development Bank will normally be willing to lend money for this because it's purpose. It's not profit. That's not its primary purpose. I mean, do you think whoever wins this race to head up the bank later on in the week is sort of...

debt issues across the continent, perhaps with Zimbabwe as the poster child for that. Is that going to be a big part of the in-tray? The African Development Bank has a broad mandate for development. It has this strategy called the High Five, which is very big on infrastructure on the African continent. Africa has some of the largest infrastructure financing deficit, which means there are a lot of roads, bridges, etc. that haven't been built, but needs to be built. And the African Development Bank is one of the key funders. Funny enough,

60% of the bank is owned by African countries, but 40% is owned by countries outside Africa, all the way from Kuwait through to the USA, Japan, China, and many, many European countries. So it's a global bank in that sense. 40% of its capital or its assets are owned by non-African countries.

On the current frontier, most of the issues are really about the financing gap. Not enough money available for Africans, African countries to build infrastructure. And of course, on top of that, there's this massive debt problem where on top of not having enough money to spend on infrastructure, African countries also have to spend a very large chunk of their revenues on service and debt. Zimbabwe is a special case.

in the sense that, unlike most African countries, it also has very large arrears. So not only does he have debt, but he has money he hasn't paid that has piled up by some estimates maybe up to about 6 point something billion dollars.

Some of that money, Zimbabwe considers domestic. For instance, there's a large amount of money that it owes to farmers whose land was seized during the Mugabe years. And the African Development Bank and others believe that it needs to sort out this issue. There are also, of course, debt to the World Bank itself, about $1.5 billion. It recently paid off the IMF.

The challenge is that for some of these multilateral development banks like the AFGB, which it owes a lot of money, or the World Bank, which it owes an even bigger amount of money, you need to pay them even if you don't have the money. Essentially, even if you're broke...

the rules require that you pay them. So until it clears that rest to the World Bank and the multilateral countries and then signs a deal with the Paris Club of Rich Countries, which essentially a lot of the big economies around the world, is going to struggle to get a new deal with the IMF to help it plug current gaps in its financing. Our thanks to Bright Siemens there from the Armani think tank. So, Wadi, give us a quick bit of crystal ball gazing there. Where would your money be on on who's going to get this job come Thursday?

Well, that's a very difficult ask. But I think that the person who Nigeria backs will carry the day because Nigeria is the biggest shareholder of the bank. And so it's a weighted kind of voting system. Well, thanks so much for your insight today. We will look out for that come Thursday's World Business Report. Zawadi Medebo there from the Africa Development Bank Congress in Abidjan, Cote d'Ivoire.

Now, New Zealand has relaxed rules for so-called golden visas to qualify for residency, and it's seen a surge in applications as it's done so. There's now no English language requirement, and the threshold for investment has been reduced to five million New Zealand dollars, roughly three million US dollars. Erica Stanford is New Zealand's immigration minister, and she told Rahul Tandon and the team on Business Matters a bit more about the scheme.

We launched our new so-called Golden Visa. That wasn't the name I gave it, by the way. I think that's the name that the media have given it. But look, we launched it on the 1st of April. And since then, the applications that have come in have defied expectations. We've had 131 applications since then. Predominantly, they are from the United States. We're seeing about half of them are coming in from the States. But other countries like China, Germany, Hong Kong are representing the next largest

But interestingly, most of the applications are in the high growth category, which is the $5 million investment, which is great for Kiwi businesses because that's what we're looking for. We're looking for smart people with great connections who are passionate about business and growing business. And we are seeing those people interested in New Zealand. Okay, let's talk about the U.S. for a second. Okay.

Was that a surprise to you? Is that normal? Is that sort of more than you expected? And if so, why so? It is unusual. I mean, it's kind of what we would have expected given the situation in the world at the moment. But when we've had these sorts of visas in the past, predominantly we've seen investment coming in from Asia and predominantly from China.

But look, there are things happening in the world. It is a very unstable place. That's why we're seeing more applications from Europe, especially out of Germany. And of course, there's the situation in America as well. So we are seeing a lot more interest from countries we haven't had in the past. People looking to build a life here. I mean, it is a beautiful, wonderful country to raise a family, to have your kids sent to school. And I think people are realising that.

Yeah, I've got family who live in New Zealand, Erica. They say exactly the same as what you say at the moment. When you say situation in the US, what are you talking about? Are you saying, you know, people are leaving because of Donald Trump? Oh, look, I don't want to put words in people's mouths. We are seeing a lot of interest coming out of the States. I'm not going to speculate on why that is. You must have an opinion. We are seeing...

Oh, not what I'm going to give to you or get myself in trouble. You know that. Look, there are things going on all around the world. We've got instability with wars happening, political unrest, and there are lots of reasons why people will choose to invest in another country and make a life for themselves somewhere else. It's happened for many centuries, and so people are making those decisions, but they're making the decision because we have one of the very best

so-called golden visas in the world where it's flexible and dynamic. It means that people don't have to spend as much time on shore before they get their residence. And the types of people who are applying for these visas are global citizens. They spend lots of time in many countries doing the business that they do. And so having that flexibility of time spent in country has been very attractive as well.

That's Erica Stanford there, New Zealand's Immigration Minister, speaking to Raoul Tandon on the Business Matters programme. And if you want to hear the full version of that interview, a little bit more about why in particular these visas are useful and used by countries around the world, what New Zealand hopes to get out of it, Business Matters podcast, a place for you to do just that. Fiona Sincotta of City Index still with us. Fiona, why have they been quite so popular with particularly high-value business leaders, these kind of sort of visa projects? Because this isn't the only one in the world, is it?

No, it's not. I mean, there are many reasons. I think, you know, there are obviously sort of the reasons for, for example, safe, low corruption, well-governed countries, they tend to be very attractive. Then you've also got business opportunities, if it could be a sort of strategic location in the case of New Zealand, given its location in Asia Pacific. So that's all

also makes it sort of well known for the ease of doing business there so there are many many reasons but also sort of high global mobility as well they never seem to stop being controversial nonetheless though do they Fiona thanks so much for your time Fiona Singh-Cotter there of City Index big thanks to our team today have been Lucy driving the programme Niamh and Hannah have been producing it and of course thanks so much to you for listening

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