Shein’s messy rise into a $ 100 billion fast fashion juggernaut

Shein raised eyebrows recently when reports surfaced that the company had been valued at $ 100 billion – more than fast fashion behemoths Zara and H&M combined. But for women who see the company’s ubiquitous ads for trendy clothes at rock bottom prices every time they open social media, the eye popping valuation came as little surprise.

Fashion conscious shoppers love the deals that Shein offers. An informal survey of my friends (ages late 20s to early 50s) found that most women have a pretty realistic expectation of the quality of Shein’s ultra-low priced clothing. The tales of getting an item of clothing that is vastly different from the pictures online do not plague Shein like other China-based clothing retailers. And every body type from rail thin to plus size has found things that fit and flatter them. Moms of growing teenagers are particularly grateful for the low prices.

Social media has definitely been instrumental in making Sheen appear to be everywhere. Shein advertises on TikTokInstagram, Facebook, and YouTube via influencers. Videos of people unpacking and showing off their “haul” are particularly popular. With its appeal to teens and young adult shoppers, Shein is the most mentioned brand on TikTok.

There’s also never a shortage of new looks to learn about. Shein produces new products at a fever pace, debuting up to 2,000 new products daily. For comparison, competitor Zara changes out their product twice a week.

This has all paid off for Shein. In May 2021, the company overtook Amazon as the top shopping app in both Apple and Android.

But the fast fashion powerhouse’s rise hasn’t all been influencers cooing over $ 5.95 sweaters. The company has been rocked by accusations of anti-Semitism and stealing artists work without permission. And those cheap clothes may carry a much higher cost when you factor in damage to the environment and allegations of exploitative labor practices.

Here is the story of Shein’s rise to fashion dominance and the controversies it faced along the way.

Shein’s rise to the top of the fast fashion heap

While it might appear that Shein was suddenly everywhere overnight, the company’s rise to the top of the fast fashion world has been anything but an accident. The Chinese company has actually been around since 2008, when it was founded by Chis Xu, an entrepreneur and SEO marketing guru.

The company was originally called ZZKKO, and it sold wedding dresses. When Xu expanded into women’s clothing, he changed the name of the company to Sheinside. At first, the company purchased clothing at the wholesale clothing market in Guangzhou. It did not design or produce the clothing. It simply resold the items through third party vendors.

In 2012, the company first turned to social media influencers and fashion bloggers to promote its products. In 2015, the company name was shortened to Shein, reportedly to be easier to remember and search for online. In 2016, Xu hired 800 designers to design the first lines of Shein-branded clothes.

Today, Shein is the largest online-only fashion company in the world. It got there thanks to the SEO marketing knowledge of its founder, who made it into an algorithm based company with an uber fast production cycle. The secret is crunching data to see what people will want to buy and then putting those ideas into production swiftly – often in a matter of days.

In 2020, Shein took in estimated revenues of $ 10 billion – a 250% increase over 2019. It’s the closest competitors, Asos and Boohoos, took in $ 4.4 billion and $ 2.5 billion the same year. And its recent sky-high valuation could be because Morgan Stanley estimates the company can bring in as much as $ 20 billion in revenue in 2022.

But you don’t get to the top without some backlash, and Shein is no stranger to controversy. These are just a few of the scandals that have done little to slow the fashion juggernaut’s momentum.

Accusations of stealing art

Artist Vanessa Bowmanfor example, told The Guardian she was initially confused by an email she got from a fan of her work in Canada asking her if she was collaborating on a line with Shein. On a sweater costing $ 22 was a picture of one of her paintings. It was an exact replica of her work despite the fact that she’d never been contacted by Shein requesting the rights to her work, according to the artist.

Bowman is far from the only artist who claims to have had their work stolen by Shein. A quick perusal of the hashtag #ShameOnShein reveals dozens of posts from creators claiming their designs were stolen by Shein.

The independent artists and designers whose work is allegedly being stolen by Shein do not have the time or financial resources to take on such a huge company, so in most cases, Shein simply gets away with it.

The Nazi Necklace

In 2020, Shein faced controversy for selling a $ 2.50 necklace featuring a swastika. It wasn’t simply a case of the company’s design reassembling the infamous anti-Semitic symbol. The offending item was literally labeled “metal swastika pendant necklace ”on the website.

At the time, the New York Post reached out to Shein for a statement on why the product featured the Nazi hate symbol. The company backtracked and claimed that the necklace was a “Buddhist swastika which has symbolized spirituality and good fortune.”

While it is technically true that the swastika design did originate from Sanskrit, that doesn’t erase the decades of hateful anti-Semitism it has been associated with since the rise of Adolf Hitler and the Nazi Party. And the brand apologized.

Allegations of questionable labor practices

A 2021 report from the Swiss labor advocacy group Public Eyefound that some of Shein’s employees at six of its factories in Guangzhou were working 75 hours a week and faced enormous pressure to make the clothing quickly.

The group found that employees, who were paid per item completed, were working three shifts each day and only got one day off a month despite the fact that local labor laws in China set a maximum working day of eight hours and a work week at 40 hours.

The company also caught flack for filing to make required disclosures under the UK’s Modern Slavery Act. Although Shein’s website maintained that it never used forced labor or child labor, it nonetheless did not provide the supply chain details the law requires.

Greenhouse gases and toxic chemicals

Perhaps the hardest controversy for Shein to overcome is the simple fact that fast fashion is bad for the planet.

While Shein produces its products in small numbers – most are ordered in quantities of 50 to 100 pieces – that’s still 35,000 items being produced daily at minimum and could be up to 100,000 pieces daily. Shein is set up to create demand for cheap clothes produced quickly, and that’s just not sustainable.

On average, people throw away 60% of new clothes within the same year they are bought. On top of that, each Shein item is packed in its own Ziplock style bag, creating a ton of plastic that will eventually end up in a landfill.

The fashion industry produces about 10% of carbon emissions and uses about 100 million tons of oil annually. New polyester is a big part of those numbers, and it’s mainly found in fast fashion due to its affordability. Polyester production of it has doubled in the last 20 years. Making a year’s supply of polyester gives off the same amount of CO2 as 180 coal-fueled power plants, roughly 700 million tons of CO2.

Beyond that, hazardous chemicals have been found in some Sheen products. In one case, a toddler jacket was included nearly 20 times the amount of lead permitted under Canadian guidelines. In another case, a red purse had five times the amount of lead in it.

Still, while sustainability might seem antithetical to its business model, this is an area where Shein has made a concerted effort to clean up its act. The company contends that its small production runs eliminate wasteand it has pledged to increase its use of sustainable materials. In 2021, the company brought on board a new global head of environmental, social and governance to govern its progress.

“Shein’s leadership is very committed to developing sustainability and social impact programs in every aspect of the business,” the ESG executive said in a 2021 report. “These programs are not afterthoughts or isolated in their own sector – there’s a high degree of willingness to implement changes in the business that will create lasting positive impacts on communities and the environment.”

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