Seoul Authorities Find Toxic Substances in Shein and Temu Products

This photo taken on July 26, 2018 shows founder of e-commerce company Temu, also known as Pinduoduo, Colin Huang delivering a speech during the launch of the company's initial public offering in Shanghai. (Photo by CNS / AFP) / China OUT
This photo taken on July 26, 2018 shows founder of e-commerce company Temu, also known as Pinduoduo, Colin Huang delivering a speech during the launch of the company's initial public offering in Shanghai. (Photo by CNS / AFP) / China OUT
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Seoul Authorities Find Toxic Substances in Shein and Temu Products

This photo taken on July 26, 2018 shows founder of e-commerce company Temu, also known as Pinduoduo, Colin Huang delivering a speech during the launch of the company's initial public offering in Shanghai. (Photo by CNS / AFP) / China OUT
This photo taken on July 26, 2018 shows founder of e-commerce company Temu, also known as Pinduoduo, Colin Huang delivering a speech during the launch of the company's initial public offering in Shanghai. (Photo by CNS / AFP) / China OUT

Women's accessories sold by some of the world's most popular online shopping firms contained toxic substances sometimes hundreds of times above acceptable levels, authorities in Seoul said Wednesday.

Chinese giants including Shein, Temu and AliExpress have skyrocketed in popularity around the world in recent years, offering a vast selection of trendy clothes and accessories at stunningly low prices.

The explosive growth has led to increased scrutiny of their business practices and safety standards, including in the European Union and South Korea, where Seoul officials have been conducting weekly inspections of items sold by online platforms.

In the most recent inspection, 144 products from Shein, AliExpress and Temu were tested, and multiple products from all companies failed to meet legal standards.

Shoes from Shein were found to contain significantly high levels of phthalates -- chemicals used to make plastics more flexible -- with one pair 229 times above the legal limit.

"Phthalate-based plasticizers affect reproductive functions such as sperm count reduction, and can cause infertility and even premature birth," an official from Seoul's environmental health team told AFP.

One such chemical "is classified as a human carcinogen by the International Cancer Institute, so special care should be taken to avoid long-term contact with the human body", they added.

Formaldehyde, a chemical commonly used in home building products, was detected in Shein's caps at double the allowable threshold.

Two bottles of nail polish from Shein were found to have dioxane -- a possible human carcinogen that can cause liver poisoning -- at levels more than 3.6 times the allowed limit and methanol concentrations 1.4 times above the acceptable level.

Shein told AFP that they "work closely with international third-party testing agencies... to regularly carry out risk-based sampling tests to ensure that products provided by suppliers meet Shein's product safety standards".

"Our suppliers are required to comply with the controls and standards we have put in place as well as the product safety laws and regulations in the countries we operate in," the company added.

Seoul authorities found sandals from Temu contained lead in the insoles at levels more than 11 times the permissible limit.

Temu did not immediately respond to an AFP request for comment.

Seoul officials have asked for the products to be removed from sale, according to a government statement.

"Products that exceed the legal limit are products that directly contact the body, such as leather sandals and hats, so citizens should pay special attention," said Kim Tae-hee, an official in the capital.

"The Seoul Metropolitan Government will continue to conduct safety tests periodically and disclose the results."

In April, the European Union added Shein to its list of digital firms that are big enough to come under stricter safety rules -- including measures to protect customers from unsafe products, especially those that could be harmful to minors.

Shein and Temu have followed Chinese e-commerce titan Alibaba in challenging Amazon, especially by making inroads in the US market.



Hugo Boss May Push Back 2025 Targets as Luxury Sector Falters

The Hugo Boss logo is seen at one of the brand's stores in Hong Kong. CREDIT: BUDRUL CHUKRUT/AP
The Hugo Boss logo is seen at one of the brand's stores in Hong Kong. CREDIT: BUDRUL CHUKRUT/AP
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Hugo Boss May Push Back 2025 Targets as Luxury Sector Falters

The Hugo Boss logo is seen at one of the brand's stores in Hong Kong. CREDIT: BUDRUL CHUKRUT/AP
The Hugo Boss logo is seen at one of the brand's stores in Hong Kong. CREDIT: BUDRUL CHUKRUT/AP

Hugo Boss may push back key sales and profit targets beyond 2025 when it reports its second-quarter results on Thursday, as investors watch for updates on trading and cost-cutting plans.
Shares in the company fell as much as 10% in July as it cut its full-year sales and earnings forecasts, citing weakening global consumer demand, especially in China and Britain, said Reuters.
It warned in March that its target of reaching 5 billion euros ($5.4 billion) in annual revenues in 2025 might be delayed, but said it still expected its margin on earnings before interest and taxes (EBIT) to reach at least 12% next year.
"Besides comments on current trading, which will be closely watched by investors, we would not rule out an update on Hugo Boss' mid-term targets," said Felix Jonathan Dennl, analyst at Metzler Capital Markets in Frankfurt.
Some analysts, including Dennl, expect Hugo Boss to hit its mid-term sales target two to three years later than originally forecast, and to reach its mid-term EBIT margin goal after 2028.
"If Hugo Boss can't provide more visibility, the revenue and EBIT targets should be in doubt," Alexander Zienkowicz, senior analyst at Mwb Research said.
In an average of estimates last updated ahead of the company's preliminary results in mid-July, analysts had forecast sales of 4.65 billion euros and an operating profit of 519 million for 2025, corresponding to an EBIT margin of 11%.
Cost cuts are also going to be in focus, said Joerg Philipp Frey, analyst at Warburg Research. He highlighted the company's 21% jump in marketing spend and higher brick-and-mortar retail expenses in the second quarter from a year earlier, in contrast with its quarterly sales decline.
The upmarket fashion brand has been on an expansion drive, increasing marketing spend and opening 102 new points of sale, including own stores, "shop-in-shops" and outlets, in 2023. It is trying to stem a slowdown in sales growth which has contributed to the company's shares almost halving in value this year.
"To lift the share price, it will be important for Hugo Boss to demonstrate effective management of the issues at hand and a credible path to recovery," Zienkowicz said.
The luxury sector is grappling with weaker sales and pressure on margins as inflation-hit shoppers hold off from splashing out on designer fashion. A property slump and job insecurity in China has exacerbated the problem.
Earnings from luxury companies this quarter have demonstrated the strains that the sector is under with both LVMH and rival Kering falling short of forecasts.