Nearly 60 per cent of Quebec businesses report drop in sales amid rise of fast-fashion retailers

Logos for PDD Holdings Inc.’s Temu, top, and Shein on smartphones in Shanghai, China, on Feb. 3, 2025.

Quebec retailers say they are upset about what they consider an invasion of the fashion marketplace from foreign competitors who don’t play by the same rule book.

One of these platforms is Shein, a Chinese vendor that is usually only present online.

This summer, the e-retailer opened a three-storey pop-up store in downtown Montreal.

The online store, and another similar store called Temu, also from China, launch thousands of new products online daily.

Since these companies are based outside Canada and only have a presence online, they pay no taxes in Canada or Quebec.

“When you see, for example, Zara or H&M, they are doing between 100 and 200 new products each day. But when you look at Shein, we’re speaking of 7,000 a day. So, it’s not the same game,” said Damien Siles, director general of Quebec’s retail council, the Conseil québécois du commerce de détail, (CQCD).

Shein’s pop-up store comes as the CQCD releases a study of its members that show 58 per cent noticed a drop in sales since the emergence of these so-called fast-fashion brands.

According to the survey, 17 per cent said the decline is significant.

The survey includes responses from 37 CQCD members, representing 1,500 points of sale and outlets in Canada.

Nearly one-third (30 per cent) say they have modified their sales strategy, and 13 per cent reported having to reduce staff as a result of the foreign e-retailers.

In a brief for consultations in anticipation of the next federal budget, the CQCD accuses the fast fashion industry of flouting environmental standards, driving “opportunistic consumption,” and circumventing Canadian tax, product safety and labour laws.

“When it comes to product safety, Quebec companies must comply with clear and monitored standards. For example, toys intended for babies must meet strict criteria for non-toxicity, absence of small detachable parts, and mechanical strength,” the brief noted.

“Several journalistic investigations and independent studies have highlighted recurring cases of non-compliance in toys for young children sold on Temu, including the presence of banned substances such as phthalates and choking hazards,” it continues. “Local retailers bear the costs of compliance and safety while these products circulate freely via these platforms without prior certification or responsibility for their safety.”

According to CEFRIO’s NETendances report (2024), 55 per cent of Canadian online shoppers made at least one purchase on a Chinese platform between 2023 and 2024.

In Quebec, that figure was 40 per cent, putting the platforms just behind Amazon in terms of popularity, with many items on Shein and Temu selling for up to 40 per cent cheaper than their direct competitors.

“The price suggests the potential for a lasting change in consumer habits, with direct effects on local retail trade,” the retail council stated.

“This trend calls for vigilance, as it is part of a structural shift that could increase pressure on Quebec retailers, who are already weakened by an uncertain economic environment and increasingly aggressive digital competition.”