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What’s faster than fast fashion? For Gen Z shoppers, it’s a company called Shein. What started in 2008 as a wedding dress seller has grown into a massive online retailer in over 200 countries. Currently valued at ~$21.05 million, the China-based company’s market share has more than tripled to 30% since the start of the year. Now some are questioning the costs of this rapid growth.
First, let’s dig into how this fully digital company got this far.
- First and foremost is a supply chain of 5,000+ Chinese factories that enables them to pump out new products at low prices. Shein designs in-house but also works with factories’ designers to produce an enormous inventory, introducing thousands of new products daily.
- Shein is basically real-time retail. While most retailers produce products in batches of at least 300, Shein has a unique, leveled-up relationship with factories and can crank out batches as small as 100 pieces. Once a product begins selling quickly, Shein can ramp up production instantly.
- Shein was an early adopter of social media, promoting products even on Pinterest as far back as 2012. They now dominate TikTok, where content from both paid influencers and unpaid American customers regularly goes viral.
- Then came Trump’s trade wars with China. In response to more tariffs, China began waiving export taxes for direct-to-consumer companies, like Shein. And because the U.S. exempts packages worth less than $800 (the bulk of Shein’s exports) from import taxes already, Shein paid neither import nor export taxes for three years — a benefit fashion retailers based elsewhere didn’t have.
- And finally, in a delivery-obsessed world, Shein instead focused on product pricing. Even with their packages taking up to a week to deliver, customers flocked to their low price items (an entire outfit with accessories can be had for under $30). In fact, many were shocked when the Shein app overtook delivery-obsessed Amazon’s as the top U.S. shopping app on both iOS and Android earlier this year.
- That said, not everyone is a fan. Critics worry over child labor violations, though no proof has emerged. Others decry Shein’s vague commentary on their green practices, especially as most of their clothes are made from synthetic fabrics (which release plastic microfibers into oceans during washing). And, Shein has...Been involved in a number of copyright infringement lawsuits, with creators regularly sharing on social media how Shein steals their designs outright.
- Had to apologize for their cultural insensitivity multiple times, such as when they sold a Buddhist swastika pendant, a Muslim prayer mat as a decorative rug, and a phone case with an image of a handcuffed Black person outlined in chalk.
What’s the alternative for cash-strapped shoppers? Besides less consumerism, not much. In fact, after Shein was banned in India (alongside other Chinese apps), cost-conscious consumers turned to thrifting instead. The hashtag #thriftindia returns over 270,000 hits on just Instagram. Now some are arguing this shift to thrift should be a trend others mimic for more environmentally-friendly shopping. Meanwhile in China, Shein is hardly known to consumers who have a wealth of options for low-priced clothing.
Our Sources:
- Initial coverage: Wall Street Journal
- Extensive company history: Vox
- How Trump’s trade wars built Shein: Bloomberg
- Shein overtakes Amazon: TechCrunch
- India’s shift to thrift: Vice