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LONDON – A new report by investment bank Morgan Stanley claims Chinese fast-fashion giant Shein is exploiting numerous tax perks to drastically undercut rivals such as Boohoo, H&M and Asos. The report suggests that tax exemptions alone mean Shein’s costs are up to 20 per cent lower than most of its rivals. These loopholes are enabling the rapidly growing online retailer to undercut Manchester based Boohoo by 15 per cent and London-based Asos by 35 per cent. Morgan Stanley estimates Shein’s prices are now about half those of discount clothing retailer H&M, however, a cursory glance at Shein’s website suggests the pricing gulf between the two might be even greater than that.

Morgan Stanley’s report also notes that Shein is free from Chinese VAT and consumer taxes and is subject to lower corporation taxes. These incentives are awarded to it for producing in China yet only selling its products outside the country.

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