Full Steam Ahead For Shein Despite Mounting Concerns

Shein, the company synonymous with trendy fast fashion and Gen-Z TikTok hauls, has ambitious plans for global growth. On July 20, the Chinese e-commerce giant announced its cooperation with China Southern Airlines Logistics to expand its flight capacity and warehousing resources, allowing for more shipments to the US and Europe. Earlier this month, Shein also hired Jacobo Garcia Miña as development director to take charge of its expansion in Europe. With almost 20 years of experience in European fashion retail distribution, including Hamp;M and Burberry, his latest role will see him “helping new and existing brands grow together with Shein,” as his LinkedIn profile reads. This follows further marketing pushes in the region, including pop-up stores in fashion hubs like Paris, Barcelona, Berlin, and Rome this summer. With some pop-up locations even seeing long queues outside, competitors in the west, such as Primark, Hamp;M, and Zara, have their work cut out for them to compete with the advanced capabilities of the Chinese conglomerate. However, Shein will still have a battle on its hands. Although the DTC unicorn is taking over the closets of European and American youth — putting it at a 100 billion valuation in April — it has also been the target of heavy backlash. Adding 6,000 new items each day to its site and producing them at lightning speed, the Guangzhou-based manufacturer has been accused of 75-hour work weeks (violating Chinese labor laws) and clogging landfills with returned items. On top of this, Shein has been named a defendant in at least 50 federal lawsuits alleging trademark or copyright infringement over the past three years. To mend its reputation, Shein announced a 50 million fund to address global textile waste management in June, starting with a 15 million grant to tackle the piles of clothes in Accra, Ghana, the world’s largest secondhand clothing market. On the design front, Shein rolled out a designer incubator program in early 2021 called Shein X, which aims to “introduce hundreds of creatives from diverse backgrounds to millions of people in the SHEIN global community." In its inaugural year, it supported almost 1,500 creatives and paid out over 1.5 million. But with sales beginning to slow (annual sales growth hovered around 60 percent in 2021 compared to the 250 percent growth in 2020), the cheap apparel maker will have to do more than improve logistics and shake up management to kickstart momentum again. Especially if it plans to go public in 2024. Still, Shein is a behemoth that won’t be rattled that easily — and its latest ESG initiatives are steps, albeit small, in the right direction.

Full Steam Ahead For Shein Despite Mounting Concerns

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Published July 27, 2022

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Full Steam Ahead For Shein Despite Mounting Concerns