Then, Swiss watchdog Public Eye released another detailed report in November which accused Shein of violating Chinese labor laws. The group hired independent Chinese researchers to track Shein’s manufacturing and packing process in China and Europe and found that many were running informal factories set up in residential buildings. China had joined the World Trade Organization and had quickly become a major clothing production center, and Western companies moved much of their manufacturing there. It was around that time, in 2008, that the name of Shein’s CEO first appeared in Chinese business filings, as Xu Yangtian. He was listed as a co-owner of a newly registered company, Nanjing Dianwei Information Technology, along with two others, Wang Xiaohu and Li Peng. The filing shows Xu and Wang each owning 45 percent of the business and Li having the remaining 10 percent.
The firm has also made smart use of social media, recruiting popular influencers and university students to promote its clothing on TikTok and Instagram. The average cost of a Shein-branded clothing item is just £7.90 and at any one time, it has as many as 600,000 items for sale on its online platform, dwarfing rivals like Zara or Boohoo. Shein has issued apologies for these offenses and made a “vow to do a much better job”. Additionally, the company revealed it “formed a product review committee with staff from different cultures and religions” to avoid repeating past mistakes; however, they’ve continued to face accusations of insensitivity and appropriation. While the fashion industry — most specifically, the fast-fashion industry — isn’t the sole cause of the world’s environmental issues, it is a major factor.
Shein also began honing its supply chain, cutting out suppliers that produced “mediocre-quality products or images,” according to a 2016 press release. Our digital supply chain is not just a feature of our business; it’s the nerve center that powers our operation. It’s what allows us to present a rich tapestry of on-trend styles without being ensnared by excess inventory waste or making our customers endure the grueling wait of weeks-long delivery times.
However, we do expect that Ananym will suggest several well-qualified industry executives who can help make the changes necessary to create significant shareholder value from wells fargo takes a step toward getting asset cap removed a board level. But do not confuse the investor’s friendly demeanor and amicable engagement for weakness. The firm is a fiduciary to its own investors and will do whatever is necessary to create value at its portfolio companies. The director nomination window does not open until Jan. 21, 2025, and we would expect that the parties will work out an agreement before then.
The people who make Shein’s products are reportedly overworked and underpaid
An interim report by the House Select Committee on the Chinese Communist Party found that Shein and online retailer Temu are responsible for more than 30% of all packages shipped to the US every day without payment of import duties. Companies are exempt from paying US tariffs on products with a retail value less than $800 if they are shipped directly to individual customers. While she admits she has seen comments online questioning the environmental impact of ultra-fast fashion and how much Shein’s workers are paid, she would buy from the company again in future.
So why has it been so successful?
A spokesperson for Shein told Reuters at the beginning of August that it would add its policies around child labor, which are required by UK law, to its website in the following two weeks. It hasn’t publicly shared factory workers’ wages or hours, despite being required to by law in the UK, but states on its website that it does not hire underage workers and guarantees living wages and safe working environments. This constant cycle of buying has raised sustainability questions, as have the ethics around its rock-bottom prices. Xu created a close relationship with his suppliers from the start, according to Schmidt, by doing something that can sometimes seem radical in this part of the world – paying them on time. Today, Shein also offers kid’s and men’s clothing and ships to 220 countries around the world.
Although the influencers who work with the brand consistently rave about and flaunt their Shein clothes on social media applications like TikTok and Instagram, shoppers who aren’t affiliated with the company sometimes share different opinions. With an astounding estimated revenue of over $15 billion in 2021, Shein has taken the fashion world by storm since it was founded by Chris Xu back in 2012 (via Reuters). Shein is one of many fast-fashion retailers nowadays, but the company is unique in the sheer number of new styles it uploads to its website each and every single day. According to a 2022 Wired report, this number is a shocking 6,000, whereas other fast-fashion brands like Gap, H&M, and Zara typically offer somewhere between 30 to 100 new styles within the same time period. Clearly, this model works for Shein, because, according to Earnest Research, the retailer now tops every fast-fashion brand in market shares. The document suggests that Shein’s reliance on suppliers for fast, cheap designs—which the company publicly describes as a competitive advantage—might be a problem.
Moreover, Shein’s rapidly changing stock encourages a low re-use rate, and its products come packaged in large amounts of non-recyclable packaging. Shein then ships products directly from China in individual shipments that have a low enough value that they avoid customs duty in countries like the US and UK. After posting glowing reviews of their trips, the influencers faced a lot of backlash for ignoring mounting allegations of questionable labor ethics and concerns about Shein’s role in climate pollution. Shein has repeatedly told the media it does not use manufacturers in Xinjiang. It has been criticised for selling items such as a Muslim prayer mat described as a “Greek carpet”, which it was forced to withdraw.
Business & economics
Shein shoppers say they’re more environmentally conscious than the average consumer, according to a report by The New Consumer and Coefficient Capital, which surveyed more than 3,000 US consumers. As of this writing, H&M’s market cap was about $20.5 billion and Zara’s parent company, Inditex, had a market cap of about $114 billion. In another fundraising round earlier this year, Shein’s valuation dipped to $66 billion, the Wall Street Journal reported. A senior Shein executive told the BBC that it also has a team reviewing new designs by its suppliers before they reach the website, to try to filter out any infringement issues, which it takes seriously. Building a colossal range of products and styles at speed means that Shein has come under fire on several fronts.
But Shein has an advantage over Western competitors; while many brands, including Boohoo, use suppliers in China, Shein’s own geographical and cultural proximity allows it to be extra nimble. “It’s very difficult to build this kind of company and almost impossible for a team that’s not based in China to do this,” Chan, from Andreessen Horowitz, said. Yet Shein’s emergence as a fast fashion juggernaut can’t solely be attributed to the price of its clothing or its ubiquitous internet presence. The retailer is also nowhere to be found in the physical world — at least not in brick-and-mortar stores, although it has live forex rates and currencies 2020 previously hosted in-person pop-up events. Shein appeared to have sprung out of thin air into the mainstream, unlike fast fashion’s old guards, whose spacious, brightly lit stores were proof of their dominance.
- It also uses “gamification” strategies to boost customer engagement on its shopping app which is used by millions of people worldwide.
- Labor rights advocates say that focusing on suppliers can be a superficial response that fails to address why dangerous conditions exist in the first place.
- Since Shein ships its orders directly to customers from Chinese warehouses, packages worth less than $800, or small-value shipments, generally remain duty-free.
- With Shein’s prices being so low, it’s probably not surprising that the quality of its products is generally not the best.
Labor law violations
Shein was first launched in 2008 under the domain SheInside, as a site that sold wedding dresses and women’s fashion geared toward US and English-language shoppers. The retailer was tradesmarter: white label trading platform development started in Nanjing, a province in China, by entrepreneur Chris Xu, who specialized in search engine optimization marketing. Shein sits at the crest of a new wave of ‘ultra-fast fashion’ retailers that are attracting scrutiny for their environmentally damaging practices. The manufacturing of synthetic fibres like polyester and nylon – prevalent in fast fashion clothing – is highly energy intensive and produces large amounts of microplastics, while textile dyeing is one of the largest sources of water pollution.