Shein, Chinese fast fashion trial
[ad_1]
After all, it was obvious that such a success would lead to equally sensational controversies. Obvious because in this climate of Cold War 2.0, Shein (pronounced sci-in) is another company of Chinese origin that conquers the world. Because he is doing it in a sector, fashion, in which it was not a given that oriental taste would meet western taste. And why, while everyone strives to be or appear sustainable, they do it with an ultra low cost model, which ships clothes from a Chinese factory to your door for 9 euros or t-shirts for 4, use-it-or-if-you-want -throw.
The global rise
Success, therefore: from the lockdowns to today, the Shein app has always been among the most downloaded, in particular by young people from the TikTok generation, and today – according to Coresight Research estimates – it is the leader of the fast fashion market in terms of sales, having surpassed both H&M and the Spanish giant Inditex (Zara). Controversies follow, legal and otherwise: accusations of appropriating other people’s designs, exploiting labor, promoting unsustainable consumption, the spotlight of American regulators and politicians, a law in France, already approved by a branch of Parliament, which wants to penalize companies that update their offer in an ultra-accelerated manner, taxing their garments up to 10 euros.
«There is a profound misunderstanding of our business model», he replies Leonard Lin, head of global affairs at Shein, one of the protagonists of the lobbying and communication campaign that the company launched globally. In years after moving the headquarters from Nanjing to the free and neutral port of Singapore precisely to appear less Chinese, and now that it wants to list in New York, this political-regulatory backlash is the biggest threat to the stock market and further growth. «Our inventory rates of less than 5%, compared to those in the sector which range from 20 to 40, enormously reduce waste compared to other fast fashion companies», explains the manager, who has repeated this to government officials in Germany, Italy and France.
Instant fashion
This “on demand”, or “ultra-fast”, or “instant fashion” acceleration created by the Chinese needs to be explained Xu Yangtian known as “Sky”, the digital marketing expert who founded Shein in 2008, so shy that – he says jokingly but not too much – not even his employees would be sure of recognizing him. The company, which has no physical stores, launches thousands (!) of new items online every day, one and a half million (!) in just one year in the United States, 37 times more than Zara and 65 times more than H&M. But it does so with small numbers for each object, only to then rely on digital intelligence to understand which ones attract the most and push production. A revolution compared to competitors, who have indeed speeded up fashion, but remain tied to the mechanism by which it is produced by predicting what customers will want. Shein does not foresee, he sees: and he realizes it thanks to one ultra-flexible network of 5 thousand Chinese suppliers which can increase volumes very quickly. Shipping directly to your home means eliminating the warehouse, one of the major costs in the sector.
Codes of conduct for suppliers
The numbers add up: according to Financial Times last year Shein would have doubled its profits to 2 billion dollars, on 45 of goods sold, less than Zara but more than H&M. But whether it is sustainable, from a labor and environmental perspective, is the contested question. Investigations have revealed that in some factories in the Shein network, workers are subjected to grueling shifts. Other than that part of the materials comes from Xinjiang, where Muslim minorities are forcibly re-educated and subjected to forced employment. Lin responds that the company has every supplier sign a “code of conduct aligned with World Labor Organization standards” and has introduced “accountability standards” along the supply chain. According to the last one Sustainability report of the company, relating to 2022, 2812 audits were carried out, also with the help of third-party auditors. As for zero tolerance, Lin assures, there is also when design violations are reported, other matter of causes. Even if Shein plays on the thin border between “inspiration” and “copy”, as demonstrated by the various tutorials available on social media that explain how to find low-cost replicas of other brands in her catalog.
Shein’s Chinese low-cost fashion is targeting Wall Street. But the US is making a wall
by Carlotta Scozzari
The environmental impact
Attempting to project a commitment to sustainability – with strategy evolveShein – is evident above all from an environmental point of view, with various objectives put in black and white. Also because the topic is very important among Shein’s young customers. The results are currently difficult to evaluate. Critics underline the impact of home delivery of goods made in China: since last year the company has also started producing in Brazil and Türkiye, to serve the European market, but Lin himself speaks of “a very small share”. And an even more substantial criticism of the entire fast fashion industry and even more so of Shein is to encourage equally fast consumption, full of waste, among young and old.
It is the concept behind the French law, which the company wants to avoid by “forming”. “It would increase costs and penalize consumers,” says Lin, a stick to which he adds several carrots: Shein has launched a platform for the resale of used clothing, it is open to working with the authorities for solutions that concern the entire industry – not ad personam -, while investing in Europe and Italy where it opened a small office in Milan and placed a warehouse in Stradellaprovince of Pavia, with which it would like to serve the entire Mediterranean area.
Temu, the “price butcher” who broke every record. From spyware to sustainability, all the doubts behind the app of the year
by Giulia Cimpanelli
Between the United States and China
How much substance and how much image is the facts will tell. But let the battle also be played out on the level of lobby and public opinion it is inevitable, in a climate which, especially in the United States but also in Europe, places a more powerful spotlight on every Chinese company, even if it does not deal with antennas and communication networks (like Huawei), nor with social media that influence the masses (like TikTok), but only in cheap clothes. In the United States some politicians are asking to investigate the links between Shein and the Communist Party, while the green light for the listing has not arrived, so much so that the company is now considering falling back on the London market. And the relationship with is equally delicate Beijing, if it is true that – despite the headquarters in Singapore – for the IPO on Wall Street it also serves as the green light from the communist regulators, who do not like to see the national champions enrich the American stock markets. Compared to a value that seemed to be close to $100 billion in 2022, Shein’s valuation would now be much lower, some say even halved. And if sales and profits continue to grow, so do the risks. At least until the world decides how to deal with instant fashion coming from China.
[ad_2]
Source link
