What is Shein? The Chinese fast fashion retailer explained China Britain Business Council

Its success is predicated on a confluence of factors, from geopolitical trade policies to a decades-old, disaggregated global fashion ecosystem. In sum, there is no doubt that Shein is a Chinese company that has successfully “gone global”. However, in the long term, it may need to reflect on its business practices if it wants to stay on the good side of legal and regulatory bodies in countries like the UK and the US. However, on 27 February 2024, Sky News revealed that Chancellor Jeremy Hunt had met with Shein chairman Donald Tang to try to convince the company to float in London instead. If Shein chose London, it would be the second-largest IPO in the history of the London Stock Exchange and provide a major boost to the UK as a business destination. However, with an IPO thought to be on the way, he could find himself thrust into the spotlight.

1. It wasn’t until 2014 that Shein began to acquire its own supply chain system, transforming itself into a fully integrated retailer.
2. Its customer base, retail analyst Emily Salter says, are “quite contradictory shoppers” overall, with Gen Z more willing to buy second-hand and rent clothing, but also making up the core of fast fashion brands like Shein that have come under intense scrutiny.
3. Inditex is similarly situated close to a garment production center in the northeast region of Spain, but according to Brennan, business in China moves much faster.
4. This accord tries to ensure that factory workers for fashion brands work in acceptable conditions.

The public also criticized Forever 21 for canceling and not committing to paying their suppliers for orders made immediately before the COVID-19 pandemic. Consumers are also criticizing Shein for its damaging impact on the environment and for clothing that is harmful to consumers. It has been criticised for selling items such as a Muslim prayer mat described as a “Greek carpet”, which it was forced to withdraw.

She was told that employees worked for up to 75 hours a week, which is not only inhumane but also highly illegal, according to Chinese labor law. Not a single interviewee could provide a contract of employment, which is also illegal, and only one of these sites enforced a minimum income — the other factories enforced a pay-per-item model (a maximum of 47 cents per item). H&M is one of the most popular fast fashion brands worldwide, but the company doesn’t have the best reputation with respect to its treatment of workers and the environment. Shein became the largest fashion retailer in the world in 2022 after securing a US$100 billion valuation in a funding round, and it achieved more than £1.3 billion in sales in the UK alone in 2023 according to GlobalData. Although much of this growth has been attributed to Gen Z TikTok users, the average Shein user actually skews a bit older, at about 35 years old, and their average monthly spend is about US$100. This suggests that many consumers aren’t using Shein as an option to buy affordable essentials but rather are using its bargain prices to pad out their wardrobes with impulse buys.

2012: founding and early business model

Reports have uncovered both the human rights issues of individuals working for many fast fashion companies, as well as the environmental impacts they make — the fashion industry is responsible for around 10 percent of total carbon emissions produced globally. But by virtue of Shein’s location and software technology, the retailer developed a speedy edge on its competitors. Matthew Brennan, a Beijing-based writer and analyst of Chinese technology, likened its pace to “real-time” retail.

What are the ethics of producing and selling thousands of garments a day at a breakneck pace, even if workers are reportedly paid on time? Some of the most popular Shein-related TikToks feature young women buying hundreds of dollars’ worth of clothes to try on for every season or fashion TikTok trend. Sure, not every consumer can afford ethically made goods or have easy access to a thrift store, but it’s not low-income shoppers who are keeping Shein and the fast fashion industry alive. Toward the tail end of the 2010s, “ultra-fast” fashion brands — Asos, Boohoo, Fashion Nova, and now Shein — emerged as viable competitors to the dominant fashion empires of the previous decade. With an astounding estimated revenue of over $15 billion in 2021, Shein has taken 100 pips power trend forex day trading strategy 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.

Is Shein’s speediness ethical?

The most notable hire is Adam Whinston, the brand’s new global head of ESG, who is largely in charge of positively changing Shein’s image and introducing a more sustainable model to the company. In fact, it has cemented its reputation among regular people, particularly Gen Z shoppers, who promote the brand through unsponsored clothing hauls and outfit posts on social media. Friends and coworkers have recommended Shein swimwear and dresses to me in casual conversation, over text and even on Slack. On TikTok, a recent crowd favorite is Shein’s cross-wrap crop top — a $13 garment that resembles a halter top, but with a strategically placed cutout that reveals extra cleavage. Its customer base, retail analyst Emily Salter says, are “quite contradictory shoppers” overall, with Gen Z more willing to buy second-hand and rent clothing, but also making up the core of fast fashion brands like Shein that have come under intense scrutiny. In a study, external, it analysed 30 of the biggest fast fashion retailers in the UK and scored their websites according to how many of these prompts customers saw before making a purchase.

The British luxury brands excelling in…

Beyond copyright, like other Chinese platforms, Shein is also facing scrutiny for its collection and use of data, especially in the US. A report published by the US-China Economic and Security Review Commission in April 2023 accused platforms such as Shein of “posing risks and challenges to… regulations, laws, and principles of market access”. Nevertheless, proponents of Shein’s model say that by gathering data on what consumers are buying and then directly feeding it back to manufacturers, they can reduce the production of unwanted items.

In September 2021, Shein updated its website to include a “Supply Chain Transparency Statement” and a code of conduct that its suppliers and manufacturers must agree to. Despite criticism for ignoring the protection of their factory workers, Zara has claimed it is committed to being a better participant in the fashion industry moving forward. The company has apologized for these incidents, which Shein has spun as a lack of cultural sensitivity and understanding of its global audiences. After several years of e-commerce operations under various guises, Xu changed his company’s name to Shein in 2015. The company ticked over for several years before the pandemic most detailed valbury capital review 2019 gave it its final push into the stratosphere – especially as brick and mortar retailers struggled.

For one thing, polyester — a material that Greenpeace predicts is used in 60% of modern clothing — emits more greenhouse gases (like CO2) than alternative materials, like cotton (via World Research Institute). Also, when washed, polyester releases microplastics (which can take decades to centuries to break down) into the ocean, harming marine and human species when ingested, per The Guardian. Apart from this, the fashion industry is the second largest industry in terms of its water consumption, which makes sense considering that just one pair of jeans requires nearly 2,000 gallons of water to produce (via National Geographic). According to Attire Media, despite signing the 2018 Bangladesh Accord, H&M is one of 12 major fashion brands that has not cut ties with factories that have known hazards. This decision illustrates the company’s willingness to jeopardize the safety of its employees.

“Compared to its fast fashion competitors, Shein is able to take more bets, but at a lower risk. It’s able to place very small initial orders with these factories, about 100 or even smaller.” These batches were much smaller than Zara’s and that of ultra-fast fashion retailers like Boohoo, which reportedly ordered about 300 to 500 units per style. If a specific top goes viral overnight on TikTok, for example, Shein will be able to instantaneously ramp up production on the garment and place additional orders depending on demand. During Shein’s early years, there was very little that distinguished the brand from other Chinese e-commerce retailers, except that it sold wedding gowns. According to reporting from PandaYoo, an English-language site published by Chinese bloggers, Shein sourced its products from China’s wholesale clothing market in Guangzhou, a region where many Chinese garment factories and markets are centralized. It operated much like a dropshipping business that sells products from third-party wholesalers directly to overseas shoppers.

Following the completely legal copycat model of most fast fashion retailers, Shein employs workers to recreate trending designs for its own products. The artwork on Shein’s offensive phone case was replicated without permission from a 2014 drawing by French graphic artist Jean Jullien, in the wake of the Ferguson uprisings. Several designers and artists have accused the company of making blatant rip-offs of their work, but there’s little that can be done, besides drawing the internet’s attention to it. It wasn’t until 2014 that Shein began to acquire its own supply chain system, transforming itself into a fully integrated retailer.

Fashion Nova

The prices of Shein’s products have also raised questions about its environmental footprint and its labour practices, like many of its rivals. Social media users criticised the move though, asking why judges such as fashion designer Christian Siriano and celebrity Khloe Kardashian would attach their names to the project. Shein was recently described as “manipulative” by web design agency Rouge Media, which identified eight prompts on its website encouraging shoppers to spend more money or give away personal data in exchange for discounts or reward points. “This is more unique to Shein, as live streaming is used less by Western brands but has huge potential to drive sales, as evidenced in China,” says Ms Salter.

But its packages often take at least a week to arrive in markets such as the UK and US, unlike competitors such as Boohoo, Asos or OhPolly which offer next-day delivery. While the private company doesn’t disclose financial figures, data provider CB Insights estimates that sales topped 63.5bn yuan (£7.4bn/$10bn) in 2020. “This helped the online retailer grow its presence and reach a wider audience more quickly.”

While it’s expected for Shein’s quality to be subpar based on the website’s prices, some Shein fails have been so shocking that they have actually proved newsworthy, such as one story about a woman’s shoes melting while she attended a music festival. She bought a new pair of shoes — Shein’s Minamilist Platform Chunky Pumps — for the occasion, but they didn’t end up lasting long. Carrasco told liteforex review and rating liteforex com Insider that her heel melted and “deflated,” as is shown in her viral video of the experience. “I’m shocked when [people] say they bought shoes from Shein like bby with that quality y’all are brave lol,” one person tweeted.