By C. Perera, JadeTimes News
The Controversial Rise of Shein A Global Fast Fashion Phenomenon
Seventeen year old Michaela recalls her largest order from Shein £150 spree that fetched her over 16 items. Like millions of others, Michaela is drawn to the ultra fast fashion giant for its affordability and the tempting discount codes offered by YouTube influencers, prompting her to "buy more." In just a decade, Shein has transformed from a little known brand to a global powerhouse in the fast fashion industry.
Founded in China in 2008 by Xu Yangtian, Shein began by selling wedding dresses online. It has since expanded into a behemoth, offering a wide range of beauty and home products. Last year, Shein's profits soared to over $2 billion surpassing fashion giants like H&M, Primark, and Next. Currently, Shein ships to customers in 150 countries worldwide.
Despite its meteoric rise, Shein faces significant controversy, particularly as it considers listing its shares on the London Stock Exchange. Critics highlight its environmental impact and questionable labor practices, including allegations of forced labor in its supply chain. Michaela is aware of these issues, especially the excessive plastic used in packaging, but she rationalizes that most fashion brands face similar scrutiny. "Not everyone can afford high end clothing," she says, acknowledging the convenience Shein offers despite her ethical concerns.
Shein, pronounced "shein," owes much of its success to its affordability and vast product range. The average Shein branded item costs just £7.90, and the platform often lists as many as 600,000 items, far outstripping competitors like Zara and Boohoo. The company has also acquired rivals like Missguided, and Xu Yangtian, who rarely gives interviews, is now one of China's wealthiest individuals.
The brand's turning point came during the pandemic, which saw a surge in online shopping. Shein leveraged social media, recruiting influencers and university students to promote its products on platforms like TikTok and Instagram. According to Louise Déglise Favre from GlobalData, "The brand’s success coincided with a boom in TikTok usage in Europe and the US," significantly boosting Shein's visibility and appeal.
Shein's business model mirrors Amazon's, partnering with thousands of third-party suppliers in countries like China, Brazil, and Turkey. It employs a "test and repeat" strategy similar to H&M and Zara, producing small batches of new items and scaling up production based on demand. This agile approach allows Shein to introduce new products in just 25 days, compared to months for traditional retailers.
The company also engages customers through gamification, offering points and discounts for daily app logins, social media shares, and referrals. Vilma Todri, an associate professor at Emory University's Goizueta Business School, notes that this strategy encourages repeat behavior, keeping users engaged and purchasing.
However, Shein's rapid growth has not been without criticism. Concerns over its environmental footprint and labor practices have persisted. Last year, US lawmakers called for an investigation into allegations that Shein uses forced labor from the Uyghur community in China. Shein denies these claims, stating, "We have zero tolerance for forced labour," and promising to enforce a strict code of conduct with its suppliers.
The company has also launched a resale platform in the US and France to enhance its sustainability credentials.Despite these efforts, some consumers remain unconvinced. Jess Gavin, a 21 year old student, stopped shopping at Shein due to ethical concerns, opting instead for second hand platforms like Vinted and Depop. Reflecting on her shift, Jess notes that awareness and responsibility grow with age.
Shein's initial plan to list its shares in the US was thwarted by political tensions. Now, as it explores a London listing potentially valued at $50 billion, opinions are divided. Some worry about the company's environmental, social, and governance standards, which could deter investors. Others believe a major listing in London could highlight Shein's operations and benefit the UK economy, particularly as the London Stock Exchange seeks to attract fast growing companies.
Michaela cautiously supports Shein's potential financial home in Britain, stating, "I think it’s good, as long as they show that they are making an effort to improve their environmental and work practices." Shein's ascent in the fast fashion world is marked by its affordability and social media prowess, but it remains entangled in controversies as it seeks to solidify its global presence through a potential London Stock Exchange listing.