Business and Management

Internal assessment

Higher level

Research question: How has SHEIN’s unethical behavior towards its “low price” strategy affect its brand
image?

Key concept: Ethics

Word count: 1700

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1.0 Table of contents

1.0 Table of contents.............................................................................................................................. 2

2.0 Introduction......................................................................................................................................3

3.0 Analysis of findings..........................................................................................................................3

3.1 Porter’s generic strategies.....................................................................................................3

3.2 Product position map............................................................................................................ 5

3.3 Stakeholder mapping............................................................................................................ 6

3.3.1 Designers.............................................................................................................. 6

3.3.2 Employees............................................................................................................ 7

3.3.3 Customers............................................................................................................. 7

4.0 Conclusion........................................................................................................................................ 8

5.0 Bibliography.....................................................................................................................................8

6.0 Supporting documents.................................................................................................................... 9

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2.0 Introduction
SHEIN is now one of the world’s largest fashion companies with channels in 220 countries that deliver
fast-paced manufactured clothing at a low price1. SHEIN’s products are labeled as “fast fashion” which
categorizes clothing items that replicate high-fashion designs but produced at a low price2. SHEIN has
been able to dominate the fashion industry, climbing to $100 billion in sales at the end of 20223. However,
SHEIN’s dominance in the industry due to its pricing strategy has led to many ethical concerns.

Consequently, this essay hopes to analyze how SHEIN’s unethical behavior towards its “low price”
strategy affects its brand image. This research question will be examined through the tools of Porter’s
generic strategies, product position mapping and stakeholder mapping to present a thorough analysis and
evaluation of the situation.

This research will be predominantly based on secondary findings, selected to give a holistic insight and
understanding. However, it is important to note that secondary sources may be susceptible to biases,
leading to unreliable findings, therefore a multiplicity of sources has been considered to minimize biases
and give a balanced insight on the perspectives that are involved.

3.0 Analysis of findings

3.1 Porter’s generic strategies

Porter’s generic strategy is a tool that outlines the ways in which a business can gain competitive
advantage through cost or uniqueness of their products. This tool will be applied to SHEIN’s competitive
advantage due to its pricing strategy and its ethical consequences.

SHEIN has been placed in the “cost leadership” section is due to two factors, SHEIN operating in the
mass market and having its unique selling point as low-priced products.

1
See supporting document 2
2
See supporting document 4
3
See supporting document 4

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SHEIN’s main target market is Gen Z, a population that is price-sensitive but also responsive to trends4. It
would be most appropriate that SHEIN has adopted a cost leadership strategy, specifically, cost proximity.
Unlike competitors, SHEIN charges a lower average price whilst also having a significantly lower cost.
SHEIN utilizes cheap, mass labor and low material costs by manufacturing in China5, whilst setting prices
low, thus leading to a gain of competitive advantage in the market compared to its competitors who
cannot lower costs nor prices. The cost proximity strategy allows for low-priced products but a smaller
profit margin due to the low price that is being charged. However, SHEIN is able to overcome this with
the quantity of products manufactured.

From an operational perspective, SHEIN’s supply chain may be considered very effective and efficient to
mass produce at low costs, but even overcome the small profit margin. However, SHEIN’s unethical
behavior to maintain costs low with a high level of production6, has failed its corporate social
responsibility after investigations began exposing SHEIN of violating labor laws in China and
overworking employees7. This has led to a negative brand image regarding ethical treatment of workers.
However, in efforts to save its brand image and maintain its corporate social responsibility, SHEIN has
stated its plan to “invest $15 million to improve working conditions at factories and its supply chain”8.

It can be analyzed that SHEIN’s choice of cost proximity has been controversial towards customers as a
low price has been achieved through unethical treatment of employees, yet, SHEIN has responded with an
effort to better maintain its corporate social responsibility.

3.2 Product position map

The product position map is a tool that showcases a business’s market standing relative to its competitors
in terms of price and quality, representing customer perception and brand image. It will be used to
determine SHEIN’s brand image and how it is affected by business practices due its low-price strategy.

4
See supporting document 1
5
“What Are the Reasons Why Shein Clothing Is Affordable?”
6
Ma
7
See supporting document 3
8
Liu, Julianna

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SHEIN’s products are viewed with a significantly lower price than products of its competitors and are
considered ‘low quality’, in fact, SHEIN’s products lack recognition9. SHEIN is not known for the
quality of but the number of designs and the low prices. However, SHEIN’s low-price, low-cost business
model cannot compromise the quality of materials. Another point of view suggests although SHEIN’s
quality is lower than its competitors, it has quality assurance in that the quality of products are more stable
and consistent8.

SHEIN is deeply branded as “low addition ZARA” as the low price charged translates to restrictions of
the quality of its designs10. Unlike its competitors in the fast fashion industry such as H&M and Zara,
SHEIN chooses to manufacture a large number of trendy products with a short shelf-life. This has led to
the question of SHEIN’s unethical business practices regarding the environment as SHEIN leaves about
6.3 million tons of carbon dioxide a year as a result of its manufacturing11. Initially, SHEIN aims to cut
waste by using batch production and only switching to mass production once a product becomes
popular12. However, with the scale of manufacturing, SHEIN still emits the same amount of carbon
dioxide as 180 coal-fired power plants4. SHEIN’s environmental pollution in the process of manufacturing
has resulted a damaged brand image, being labeled as “low quality” when other competitors who have
sustainability goals, prioritize the quality of their products13. However, in an effort to save its brand
image, SHEIN has announced to spend 7.6 million on a partnership with a nonprofit business to reduce its
emissions by 25% by 203014.

It is important to note that the product position map only takes into consideration two factors that affects
the brand image of SHEIN, that is price and quality whilst there are many different factors that contribute
to the perception of a brand15. However this gap has been minimized by the selection of multiple sources
that provide an understanding of SHEIN’s image according to its customers.

9
See supporting document 2
10
See supporting document 2
11
See supporting document 4
12
Ferrer, Marthe de
13
Cuofanp, Genaro
14
See supporting document 4
15
Fripp, Geoff

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3.3 Stakeholder mapping

Stakeholder mapping is a tool that considers the relative interest of stakeholders in a company compared
to their relative level of influence to resolve conflict. This tool will be used to establish how SHEIN’s
unethical business practice due to its low price strategy has affected stakeholder groups.

3.3.1 Designers

The designers of SHEIN’s product are considered to have a high level of interest whilst having a low
degree of power. Whether designers of SHEIN’s pieces works for SHEIN or have gotten their designs
stolen, SHEIN deals with designers with little effort due to the lack of finance on quality designers to
achieve low pricing16. SHEIN’s ethical business practice is being questioned when the rapid rate of new
designs have resulted in stealing. Although the essence of fast fashion revolves around reproducing
runway designs, SHEIN has directly stolen designs from other designers. Local designers have voiced the
destruction that SHEIN has done to their businesses after their designs have been imitated and sold at a
lower price. Even its competitor, H&M filed a copyright lawsuit against SHEIN17. Due to the negative
publicity caused by designers coming out to have their designs stolen, SHEIN’s approach was to ask for
“collaborations'', however actions of imitating designs still repeat after designers refused to collaborate18.
Through a different perspective, SHEIN’s solution of collaborating with designers has also had positive
results when the SheinX program has given thousands of designers a chance to present their designs.
Thus, it is important to consider how SHEIN’s efforts to maintain its brand image also exhibits ethical
business behavior19.

16
See supporting document 2
17
See supporting document 1
18
Bramley, Ellie Violet
19
“What Happens When Designers Team up with Shein”

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3.3.2 Employees

SHEIN’s supply chain revolves around low wages and poor working conditions20 in order to develop
products that are low priced and low costs as previously mentioned in section 2.1. SHEIN’s factory
workers are classified with a low level of interest and a low degree of power due to the SHEIN’s minimal
effort to ensure workers with safe working conditions, and adequate payment21. These workers have a low
degree of power as they are oftentimes unregistered businesses in urban villages who do not have the
backup of sa union to stand up against the dominating business22. However, the damaged brand image
regarding violations that SHEIN has committed in its supply chain has forced SHEIN to admit and
confess its failure to safeguard the welfare of employees23. This, again, shows efforts from SHEIN to
maintain and save its brand image regarding its unethical business behavior towards maintaining a
low-price strategy.

3.3.3 Customers

SHEIN’s most important stakeholder group are customers. Operating in the mass market, SHEIN
develops a large variety of products that appeal the general public24. SHEIN’s products are affordable, fast
and trendy which resulted in a high degree of brand loyalty25. SHEIN’s pricing strategy is made to suit the
demographic leading to a rapid rate of new product designs and extremely cheap prices. However, the
circulating of social media posts regarding SHEIN’s unethical behavior including design theft, treatment
of workforce and ecological footprint has built up a bad corporate image26. However, as customers are the
most important group of stakeholders, SHEIN has actively responded to its unethical allegations in order
to preserve its brand image and made maximum effort to encourage trust from customers, shown through
SHEIN’s responses to the previously stated unethical accusations.

4.0 Conclusion
Overall, SHEIN’s choice of cost leadership to produce low-priced products that appealed to its
price-sensitive target market has resulted in a damaged brand image regarding its treatment of employees.
Furthermore, SHEIN is perceived as a low quality brand, caused by the little funds spent on the quality of
designs due to the nature of the low price strategy. This has generated a negative brand image after
SHEIN has been accused of damaging the environment. Towards its most important group of
stakeholders, customers, SHEIN has damaged its brand image with its unethical business practices.
However, from an ethical perspective, SHEIN has become more transparent in efforts to build a strong
brand image by responding to many of its unethical acquisitions and strived to become a more ethical
business thus leading to a positive brand image.

20
See supporting document 1
21
See supporting document 4
22
Peiyue, Wu
23
See supporting document 3
24
See supporting document 1
25
See supporting document 2
26
See supporting document 3

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In conclusion, SHEIN’s unethical behavior towards product development has negatively impacted its
brand image. However, SHEIN’s efforts to save its brand image has led to a positive perception towards
the brand. A deeper investigation can be carried out through the use of quantitative financial tools to
calculate the magnitude of how SHEIN’s unethical practices have affected the business’s profitability.

5.0 Bibliography
Bramley, Ellie Violet. ““Details I Made, They Made” – Designers Hit Back at Shein’s Imitation Game.” The
Guardian, 2 Sept. 2023,
www.theguardian.com/business/2023/sep/02/details-i-made-they-made-designers-hit-back-at-sheins-imitati
on-game.

Cuofano, Gennaro. “SHEIN Competitors.” FourWeekMBA, 31 Aug. 2023,

www.fourweekmba.com/shein-competitors/.

Ferrer, Marthe de. “How Are Shein Hauls Making Our Planet Unlivable?” Euronews, 17 Oct. 2022,
www.euronews.com/green/2022/10/17/how-are-shein-hauls-making-our-planet-unlivabl.

Fripp, Geoff. “Limitations of Perceptual Maps -.” Www.perceptualmaps.com, 4 May 2023,

www.perceptualmaps.com/limitations-of-perceptual-maps/.

Liu, Juliana. “Shein Tells Suppliers to End Long Working Days at Factories by End of the Month | CNN Business.”
CNN, 6 Dec. 2022,
www.edition.cnn.com/2022/12/06/business/china-shein-labor-conditions-investment-hnk-intl/index.html.

Peiyue, Wu. “The Shady Labor Practices Underpinning Shein’s Global Fashion Empire.” SixthTone, 17 Sept. 2021,
www.sixthtone.com/news/1008472.

Vara, Vauhini. “Fast, Cheap, and out of Control: Inside Shein’s Sudden Rise.” Wired, 4 May 2022,
www.wired.com/story/fast-cheap-out-of-control-inside-rise-of-shein/.

“What Are the Reasons Why Shein Clothing Is Affordable?” Chinadivision.com,

chinadivision.com/what-are-the-reasons-why-shein-clothing-is-affordable#:~:text=Shein%20primarily%20
manufactures%20its%20products. Accessed 20 Jan. 2024.
“What Happens When Designers Team up with Shein.” The Business of Fashion, 8 June 2023,

www.businessoffashion.com/articles/retail/what-happens-when-designers-team-up-with-shein/.

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6.0 Supporting documents
Supporting document 1

Research on the Business Strategy and Deficiency of the Fast Fashion Industry to Enhance
Development - a Case Study of Shein
Jiaye Liu

(31/12/2022)

King’s Business School

King’s College London
*Corresponding author. Email: jiaye.liu@kcl.ac.uk

Fast fashion is a business model followed by the clothing industry in which recent catwalk trends and high-fashion
designs are copied, mass-produced at a low cost, and shipped quickly to retail stores. 3.1. Strengths

Shein announced sales of over 10 billion dollars in 2020 and 15.7 billion in 2021. In June 2021, the company has
nearly as many fast fashion sales in the US as H&M and Zara combined [4].

Research on the Business Strategy and Deficiency 1795

3.1.1. Fast update

From design to manufacturing, Shein handles the entire supply chain on its own. With every step highly digitised
and integrated to the next, the company can create hundreds of new products every day tailored to different regions
and tastes. Shein removes any remaining middlemen and has developed an enhanced cross-border
C2M(Customer-to-Manufacturer) model. When a trend is identified, Shein can produce items in less than three days
(usually 5-7 days) [5]. Shein launched 800,000 new products in 2021, on average more than 50,000 items every
month. In just a few months, it has surpassed the annual new product volume of Zara, and the growth is accelerating
[6]. According to their official website, there were about 8000 new products added to Shein's women's clothing
category alone every day in March 2022.

3.1.2. Low price

Despite other fast fashion brands and Amazon's products being cheap, for example,people can buy a regular shirt at
Zara for up to $30, the same thing at Shein only costs half that amount. Furthermore, Shein aims to reach every type
of customer and ensure they can enjoy fashion, irrespective of their economic situation. The low prices of Shein are
attracting more and more youngconsumers. T-shirts for women can be purchased for as low as $5 and dresses for as
low as $10.

3.2. Weaknesses

3.2.1. Quality

As what is the most common criticism of the fast fashion industry, there are complaints on social media about the
poor quality and condition of the products with clothes falling apart and received with odd smells. Additionally, the
clothing in Shein's photos does not fit appropriately as seen or comes in the wrong sizes, showed in some YouTube
videos [6].

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4.2. Price

Shein uses a low pricing strategy that appeals to the shopping preferences of Gen-Z (their targeted demographic).
Gen Z emphasises that they are extremely price-sensitive and price-driven when shopping for fashion, considering
price as the most important factor. Their most advantageous marketing strategy is to offer products at significantly
lower prices than other fast fashion retailers like Zara and ASOS, as well as those sold on Amazon.

4.4. Promotion

5. IMPROVEMENTS NEEDED TO PROMOTE DEVELOPMENT OF THE FAST FASHION INDUSTRY

5.1. Lack of sensitivity

Apart from the previously mentioned problems, their lack of sensitivity and their willingness to repeatedly steal
fashion designs are still the major concerns in the fast fashion industry.

Last year, Shein was reported to have stolen art from the same small artist six different times [8]. If the artist
approached them for copyright claims, they would always pay them some money for an unlimited license and
simply delete the products. Other giants like Zara and H&M are involved in hundreds of lawsuits per year for their
controversial designs, which are somehow always similar to others' work. As long as there is no sound copyright
law, clothing designs can still be copied without permission, meaning that designs cannot be adequately protected
[9].

However, a new program, Shein X, was introduced last year to help showcase new talent to the world and encourage
cooperation with indie designers. After work by the outside designers, they handle every step post- design, including
manufacturing, marketing, and selling. As a step toward protecting intellectual property, this program sets a
precedent for other competitors in the fast fashion business.

5.2. Corporate social responsibility

The work culture in Shein's Chinese factories was shockingly detailed in a new report published in November 2021.
It is found that staff work 75 hours per week while having three shifts daily, often taking only one day off in a
month, which obviously violates the labour law there [10]. The local labour laws in China mandate a maximum
working day of eight hours, which equals 40 hours in a week. Workers are encouraged to work long hours because
they are paid per item of product. In a 'paid per item' model, workers are paid for each garment they produce.

The Shein website published its first Supplier Code of Conduct in September. A key provision there calls for
suppliers to provide a healthy, safe, and hygienic work environment. Clearly, this is an area in need of improvement.

It is no surprise that factories are under poor working conditions. Not only the fast fashion industry, but the garment
industry as a whole is built around poverty, wages, and sweatshop conditions. This is not the fault of a single factory
but is caused by the industry-wide push for the lowest prices and shortest production periods.

5.3. Harming the Environment

The clothes produced by Shein, like other fast fashion companies, are often cheap and low-quality, which are not
meant to last. The clothes are supposed to be trendy, which accordingly do not need to last past their short trendy
lives. However, their low prices also indicate that many of them are made of synthetic materials such as polyester

10
and nylon. In contrast with the short-term trendy cycle in fashion, clothing made of these materials will not decay
[12].

Supporting document 2:

International Journal of Frontiers in Sociology

Published by Francis Academic Press, UK

Value-Creation Strategy of Nanjing SHEIN

Linglin Zhanga,*, Yunlan Goub

(2021)

2. Analysis of Value-Creation Strategy

2.1 SHEIN’s Value-Creation Strategies

SHEIN mainly uses two methods of value-creation: low cost and differentiation, which help the

company gain a strong competitive advantage in the development of international business and achieve

the goal of profitability and profit growth. By virtue of the advantages of Chinese manufacturing, the

low cost strategy helps it to open the international market and win the favor of the middle and lower

level consumers, and with the help of its own early SEO operation experience and differentiation

strategy, it can quickly establish its foothold in the international fast fashion industry market.

2.2 Strategic Assumption

(3)Quality imperative: SHEIN can achieve quality assurance, category industry leader that always

adheres to the mission of everyone to enjoy the beauty of fashion, adheres to the values of customer

first, quick responses, learns innovation, integration and cooperation, and does its best to provide

customers with comprehensive quality services. R&D can also always see "SHEIN and Forever21 feel

very similar, but SHEIN is more fashionable, lower prices, more stable quality" such positive

comments, meeting consumer expectations.

3. Value-creation Strategic Implementation and Evaluation

3.1 Value-creation Strategic Implementation

3.1.1 Implementation of Low Cost

Low Cost Strategy is an overall strategy based on global integration, SHEIN operates the

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production, distribution of products, services of homogeneous type and quality in over 220 countries

and regions worldwide. Because there is no offline store, they do not need shops. Fashion dress for less

than $20, some even cost less than $5. For Zara, a little dress could cost more than $30, but in SHEIN

costs half price, even less than $10. Cheap and fashionable goods allow more than 30% of customers to

return to SHEIN to place orders.Low cost strategy let SHEIN even under the impact of the novel

coronavirus 2020 sales have exceeded 40 billion RMB, which is expected to hit 100 billion RMB. By

contrast, Zara announced that its February-April revenue was nearly halved and it closed 1200 stores. It

has to be said that the SHEIN company's value-creation strategy plays a huge role in

internationalization.

3.1.2 Implementation of Differentiation Strategies

SHEIN’s design team has over 100 staff, that designers and their teams are mainly from China,

the United States, Europe, the Middle East and so on. With a buyer's team in core markets, SHEIN

collects local trends, cultural characteristics, providing designers with information for design and

production of clothing, which created a "fast fashion 7 days faster than Zara ". 3.2 Value-creation Strategic
Evaluation

3.2.1 Positive Elements

Table 1 shows that SHEIN company is not unique in the fast fashion industry, so it is important to

achieve brand positioning. Low cost strategy combined with industry development and brand prospects,

it chooses market sinking, locks consumer groups into 20-35 years old, average income, who hope to

buy high-cost and a little small design, affordable products. The user portraits and low cost strategy

coincide, and the consumption positioning matching degree of strategy is high.

3.2.2 Negative Elements

(1)Brand products lack recognition. The openness of the Internet enables the shelves to accurately

and timely grasp the popular trend of goods, design and produce a large number of fake products,

which is actually the essence of the fast fashion industry. The value-creation strategy serving the low

cost strategy can not guarantee the low price and hire more excellent designers team. It is inevitable

that the style is the same, so that SHEIN is deeply branded as "low edition ZARA". Moreover, SHEIN

also faces the questioning of working conditions and manufacturing processes in supply chain by

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Western Z generation (born after 96 years) consumer groups, because low-cost business strategies

mean that the former can not be guaranteed. Brand independent good image of the establishment has a

conflict with the low cost strategy.

Supporting document 3

Fast, Cheap, and Out of Control:

Inside Shein’s Sudden Rise

(04/05/2022)

The Chinese company has become a fast-fashion juggernaut by appealing to budget-conscious Gen Zers. But its
ultralow prices are hiding unacceptable costs.

Shein’s online-only model means that, unlike its largest fast-fashion competitors, it can avoid the expense of
operating and staffing physical stores, including dealing with racks full of unsold clothing at the end of each season.
Its reliance on suppliers for design, aided by software, makes the work faster and more efficient. The outcome is an
endlessly flowing stream of clothing. Every single day, Shein updates its website with, on average, 6,000 new
styles—an outrageous figure even in the context of fast fashion. Lu, the University of Delaware professor, found that
in a recent 12-month period, the Gap listed roughly 12,000 different items on its website, H&M had about 25,000,
and Zara had some 35,000. Shein, in that period, had 1.3 million. “We offer something for everyone at very
affordable prices,” Chiao told me. “Whatever customers need, they’ll be able to find it on Shein.”

Shein isn’t the only company that makes small initial orders with suppliers, then re-ups when products do well.
Boohoo helped pioneer that model. But Shein has an advantage over Western competitors; while many brands,
including Boohoo, use suppliers in China, Shein’s own geographical and cultural proximity allows it to be extra
nimble. “It’s very difficult to build this kind of company and almost impossible for a team that’s not based in China
to do this,” Chan, from Andreessen Horowitz, said.

Pressure is coming from inside Shein’s workforce too. In interviews or lawsuits, several US employees described an
unpleasant, disorganized work environment where complaints went unaddressed. A former US Shein employee with
years of experience in her field told me, “I worked at Shein because I needed a job, and it was remote and easy as
heck.” She was surprised, though, to see Shein cutting corners in the design and safety of its products. She noticed
that offensive items, such as a swastika necklace and a Muslim prayer mat sold as a decorative rug, were removed
only after customers complained.

On social media, stories have circulated about outright design theft. Leah Flores, a photographer and artist in
Portland, discovered last year that Shein had copied a photo of hers—foamy waves crashing into sand, the sky
pinkish-orange behind it—and was selling it on a tapestry for $10. As she scrolled deeper on Shein’s website, she
found seven additional works belonging to her. Flores sued Shein and, last June, obtained a $40,000 settlement.
Then, a couple of days after receiving her first settlement check, she found four more of her images on Shein and
Romwe. “My lawyers were like, ‘I can’t believe this,’” she said. Again, she took action against the company; again,
they settled, this time for an amount she would only describe as “substantial.” (Shein did not respond to a request for
comment.)

In far more cases, though, small designers seem to be simply taken advantage of. Last spring, a 26-year-old musician
named Katie Bailey found a strangely familiar image on Shein’s website: a T-shirt she had commissioned from an

13
illustrator to promote her band, Southbound 17. The page had dozens of reviews from people who for months had
been buying the T-shirt, listed at $9. But Southbound 17 hadn’t even started selling the shirt yet.

After Bailey posted about her experience on social media, she got an Instagram message from Shein: “Hello,” it
began. “Please allow us to apologize for what happened.” The message explained that the “unlicensed items” had
been sent to Shein by a supplier who promised there were “no copyright issues.” While no further explanation was
offered, Bailey suspected that someone working for the supplier had pulled the design from the Instagram feed of
the illustrator she had hired to create it. In her exchange with Shein, the company representative wrote that the
T-shirt had been removed from its site, and that it wouldn’t work with the supplier anymore. They promised to
review designs more thoroughly in the future. But a month later the T-shirt resurfaced, with slight edits, on Romwe.
Exhausted, Bailey dropped the issue; the T-shirt sold out. By then, her initial TikTok about the ordeal had been
viewed more than 300,000 times.

In an October guidance document about copyright violation that I reviewed, the company’s legal team wrote, “There
have been many IP infringement complaints recently, leading to millions of dollars of damages and attorneys’ fees
being paid and negative news articles and social media posts about the company.” It goes on, “Copyright
infringement is a straight liability offense, meaning ‘We did not know’ is not a defense.”

Supporting document 4

Shein Is the World’s Most Popular Fashion Brand—at a Huge Cost to Us All
(17/01/2023)

BY ASTHA RAJVANSHI, VIDEO BY JENNA CALDWELL AND ANDREW D. JOHNSONJANUARY 17, 2023 1:09 PM
EST

A global juggernaut
Pronounced “she-in,” the fast fashion Chinese behemoth was founded in the city of Nanjing in 2008 by Chris Xu, a
U.S.-born entrepreneur and search engine optimization specialist. Over the years, Shein went from being a low-cost
Chinese apparel merchant to a global, online-only fashion juggernaut, climbing in sales from $10 billion in 2020
(according to Bloomberg) to a whopping $100 billion in 2022.
Its biggest selling point is the low pricing of clothes that are shipped to more than 150 countries and regions
worldwide, catering to women in their teens and 20s. The business model works like Amazon—a sprawling online
marketplace brings together about 6,000 clothing factories in China under Shein’s label, while internal management
software collects near-instant data about which items are selling and which aren’t to visibly boost the popular items.
According to an investigation by Rest of World, Shein added anywhere between 2,000 and 10,000 individual styles
to its app each day between July and December of 2021.

14
An Extinction Rebellion protestor holds a placard reading "SHEIN = 22% of warming gas emitted for youths" in
front of a pop-up store.Alain Pitton—NurPhoto/Getty Images

An unsustainable model
Put simply, Shein produces an astounding number of items on a daily basis—the primary reason why the company
has an unsustainable model. Shein’s CEO, Molly Miao has stated that each item is produced only in small numbers,
between 50-100 pieces a day, before it becomes popular and is then mass-produced. But the manufacturers’ rapid
use of virgin polyester and large consumption of oil churns out the same amount of CO2 as approximately 180
coal-fired power plants, according to Synthetics Anonymous 2.0, a reportpublished on fashion sustainability.
As a result, the company leaves about 6.3 million tons of carbon dioxide a year in its trail—a number that falls well
below the 45% target to reduce global carbon emissions by 2030, which the U.N. has said is necessary for fashion
companies to implement to help limit global warming.

With almost all of its impact taking place in its supply chain, Shein also committed to submitting its own targets for
validation. In October, on the heels of the company coming under fire for fuelling wasteful consumption, Shein
announced it would spend $7.6 million on a partnership with the nonprofit, Apparel Impact Institute, which works
with manufacturers to set and implement energy efficiency programs. It aims to reduce supply chain emissions by 25
percent by 2030 through energy-efficient projects and a transition to renewable power for manufacturing.

A damning record on workers’ rights

Despite it all, perhaps the bigger controversy regarding Shein is the treatment of its workers, who toil away in
Chinese factories in unfit conditions. A lengthy investigation by Wired first chronicled how both laborers and
consumers suffered from the production of its clothes, while a documentary by the U.K.’s Channel 4 found that
Shein employees were working 75-hour shifts with very little time off. Then, Swiss watchdog Public Eye released
another detailed report in November which accused Shein of violating Chinese labor laws. The group hired

15
independent Chinese researchers to track Shein’s manufacturing and packing process in China and Europe and found
that many were running informal factories set up in residential buildings.
Advocacy groups and journalists also uncovered evidence that Shein’s $11 bikinis and $7 crop tops were being made
by people working in unsafe workshops, lacking safety protocols like windows and emergency exits. 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.

A crowd waits to enter SHEIN's first physical store in Madrid, on June 2, 2022.Cezaro De Luca—Europa
Press/Getty Images

Eventually, Shein admitted to the breaches and released a statement that read: “We know we have a responsibility to
safeguard the welfare of workers in our supply chain. In light of the recent report in the news, we launched an
investigation into the claim that 2 of our suppliers had unacceptable working conditions at their facilities.”

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