Chinese businesses raised a record $53bn through foreign listings in 2014, according to LSEG, a financial-markets group. In China, however, LatePost reported that Shein has developed “a reputation for timely payment to factories,” which is a rarity in the country. The retailer also appears to have a good rapport with the factory owners it employs, who were willing to relocate their operations alongside Shein in 2015. Shein has spent years cultivating relationships with Chinese garment factories and manufacturers, whereas most Western brands generally outsource this work. 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. Our audacious strides extend beyond mere industry participation to reshaping the fashion landscape itself.
Shein Is the World’s Most Popular Fashion Brand—at a Huge Cost to Us All
“So at the back of my mind I feel quite convert australian dollar to swedish krona bad when I purchase things, but at the same time it’s convenient,” she tells the BBC.
In response, many Chinese multinationals are playing down their ties to the country. On November 14th BeiGene, a drugmaker whose name is a nod to China’s capital city, said it would rebadge itself as BeOne Medicines. Hundreds of Chinese firms have, like Shein, moved their headquarters to Singapore. But Shein has gone further than most in its efforts to redefine itself as a global, rather than a Chinese, company.
In exchange, the brand gets relatively low-cost marketing, in the places where its target audience, teens and twentysomethings, prefers to hang out. While Shein has collaborated with major celebrities and influencers (Katy Perry, Lil Nas X, Addison Rae), its sweet spot seems to be the ones with medium-size followings. A second illustration of the difficulty of Shein’s position comes from its proposed overseas listing. Foreign initial public offerings (ipos) by Chinese firms have plummeted in recent years as China’s government has shown its disapproval, most visibly by forcing DiDi, a ride-hailing firm, to delist in America in 2022.
- In response, many Chinese multinationals are playing down their ties to the country.
- Although it’s based in China, the firm mainly targets customers in the US, Europe and Australia with its cut-price crop-tops, bikinis and dresses, costing just £7.90 ($10.70) on average.
- 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.
- Chinese businesses raised a record $53bn through foreign listings in 2014, according to LSEG, a financial-markets group.
- And in September America’s government said it planned to remove a trade rule that exempts imports worth less than $800 from customs duties, which would hurt the two firms.
- Matthew Brennan, a Beijing-based writer and analyst of Chinese technology, likened its pace to “real-time” retail.
Many also worked without contracts or minimum wage requirements, thereby allowing the company to reportedly fail to pay its employees properly. Channel4’s documentary, Inside The Shein Machine, sent undercover cameras to film factory workers who were forced to pull 17-hour shifts to make hundreds of garments a day. In one factory, they made a daily base salary of $20, which would then be docked by $14 if any garments had mistakes. In any case, even if Shein does make changes, another startup may well come along to take its place. Last year, Alibaba, the giant Chinese ecommerce company, launched a low-cost shopping site for the European market called AllyLikes. Shein’s US base is in Los Angeles; the company also recently opened an Indianapolis-area distribution center and an office near Washington, DC.
Shein has repeatedly been accused of stealing designs
Some estimates, however, have pegged the company’s 2023 sales at around $32.5 billion. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. In the meantime, influencers are also under increasing criticism from environmental and workers’ rights organizations for working with Shein—with some even deciding to part ways as a result. Irwin, of Credit Suisse, published a research note in February arguing that it is “highly likely” that in the future US lawmakers will try to rein in fast-fashion companies—and that Shein in particular will struggle to comply.
BBC News Services
Around the building, bulletin boards and utility poles were densely packed with ads for jobs at garment factories. It changed its name to Shein and moved its headquarters from Nanjing to Guangzhou, to be near its supplier base. It quietly opened a US headquarters in an industrial part of Los Angeles County. It also acquired Romwe—a brand that, as it happens, Li had started with a girlfriend years earlier but had left before the acquisition. Last fall, in the stagnation of pandemic life, I became fascinated with videos of influencers standing in their bedrooms and building trade classes and courses overview trying on clothes from a company called Shein.
CBC reported that lead exposure can damage the heart, brain, kidneys, and reproductive system; and contamination can be especially harmful to infants and children, making the levels found in the children’s jacket that much more dangerous. Miriam Diamond, environmental chemist and University of Toronto professor, pointed out to CBC that this contamination is not only unsafe for shoppers but also for the individuals actually producing these items. Apart from the Public Eye report, there is little to no information that confirms whether or not Shein is enforcing policies that protect workers on its production sites.
But she feels most fashion brands face similar criticism and that “not everyone can afford high-end clothing”. PDD Holdings, the company that owns Temu, has benefited from a much faster growth rate, by comparison. During the first six months of the year, the company’s revenue doubled to $25.3 billion. PDD Holdings owns Temu and Pinduoduo, another popular e-commerce site that focuses on agriculture.
The company’s reluctance to shift work abroad may further reflect To become independent its wariness of incurring the government’s displeasure. A person close to the business says that Chinese authorities keep tabs on what digital operations are done within the country and what is moved overseas. About 10,000 of its 16,000-strong workforce were based in China at the end of last year, according to regulatory disclosures.
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”. 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 gave it its final push into the stratosphere – especially as brick and mortar retailers struggled. In this article, we delve into the background of Shein, its remarkable growth, concerns surrounding its business model, and the implications of its expansion for British companies in China and beyond.
