Shein is one of the most successful start-ups in the world, and the fast fashion company’s rise parallels the global spread of the shopping holiday Black Friday. It has been valued at $100bn. Shein still has many unknowns, including questions about its working conditions as well as its materials. So what we know about its success – and what we don’t – tell us about the future of fast fashion.
This episode:
- Terry Nguyen (@terrygtnguyen), Dirt Newsletter journalist
- Sheng Lu (@shenglu27), Professor at the University of Delaware
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Full episode transcript:
This transcript was created with AI. It’s been reviewed by humans, but it might contain errors. Please let us know if you have any corrections or questions, our email is [email protected].
Halla Mohieddeen: It’s one of the most successful start-ups in the world, and for many young shoppers, it’s become a household name: Shein, the biggest new name in fast fashion.
Newsreel: It’s a Chinese company called Shein.
Newsreel – This is an online company worth 100 billion.
Newsreel – It was the top shopping app in 56 countries.
Newsreel: It surpassed Amazon to become the most downloaded iOS shopping app.
Halla Mohieddeen, It flew under radar for a long while. But by the time Shein’s success fully emerged, it had surpassed big brands like Zara and H&M. And it’s reinventing the industry in the process. Shein still has many unknowns.
Newsreel: Shein, a highly secretive company, shares very little about its origins.
Halla Mohieddeen: Today, we’re taking a look at what we know about Shein’s success, what we don’t, and what that means for all of us. I’m Halla Mohieddeen and this is The Take.
[THEME MUSIC PLAYING] [PACKAGES OPENING]
Halla Mohieddeen: If you type your favourite brand into YouTube or TikTok, you’ll find many videos like these. Shoppers posting their hauls of packages and displaying the newest products they’ve bought, usually online. Shein makes sure their money goes a long way.
Haul video: This $600 Shein haul is what we are doing. As you can tell, it’s a huge package.
Haul video: I’m back at it again with a massive haul from Shein. The box is amazing, man.
Haul video – Shein has always a sale and always has coupon codes.
Haul video: It’s my favorite. This is my favorite. 10 out of 10. Love.
Terry Nguyen: I saw a tweet that you can create a year’s worth of outfits with $280 on Shein. A complete outfit, accessories, and shoes can be bought for as low as $30.
Halla Mohieddeen: That’s journalist Terry Nguyen from Dirt Newsletter.
Terry Nguyen: Terry is a reporter covering culture, entertainment and politics at Dirt. I used to cover consumerism at Vox.
Halla Mohieddeen: In Terry’s reporting, she described herself as haunted by Shein. And if you’ve experienced ads for a certain item of clothing following you around, from Facebook to Instagram to your internet ads, you’ll know what she means. Terry said that the most haunting item she saw was an exercise dress. Not just Shein, but many brands.
Terry Nguyen: This exercise dress that originally was from, I think this athleisure brand, called Outdoor Voices, but I’ve seen so many replications of that from a variety of brands. And I’ve just kind of had to tell myself, no, there’s too many exercise dresses in the world. They’re everywhere in New York. I can’t buy one.
Halla Mohieddeen: Back in 2019, it wasn’t just a Shein product following Terry, but the brand itself. Shein was founded back in 2012, but it wasn’t really until 2019 or 2020 that it really began to take off.
Terry Nguyen : I noticed that my awareness of Shein increased quickly when I started using TikTok during the pandemic. It felt very ubiquitous, whether it was people sharing their hauls, or what adorable trending tops were they getting from Shein.
Halla Mohieddeen, Terry covers fast fashion for the consumer. We also wanted to know about the supply so we talked to Professor Sheng Lu from the University of Delaware.
Sheng Lu: I think I’m one of the very few economists working in a fashion department. I have to admit I’m one of the very, you know, least fashionable faculty. I probably need to take my colleagues’ classes.
Halla Mohieddeen said: But Sheng said he learns from students. That’s how he heard about Shein.
Sheng Lu : Generation Z students shop a lot. I notice that my students check their iPhone, iPad, and Shein apps during class breaks.
[MUSIC PLAYING]
Halla Mohieddeen wrote: So Sheng researched how Shein beat many fast fashion brands at their own game. The most noticeable difference consumers notice is the cost. Shein’s prices are so low, it can be hard to believe them.
Sheng Lu: Shein’s price is even 70 percent to 60 percent lower than what Zara and H&M can offer to consumers. This makes Shein quite different and very interesting to me.
Halla Mohieddeen: Terry shared some of the numbers she’s seen.
Terry Nguyen: There are always deals for basic tank tops or shirts that cost as little as $3 to $5. And if it’s a more complicated top, like a halter top, it might be a little more like around, like, $10 to $13, and that sort of coupled with free shipping makes it really appealing to shoppers who might not have a lot of income.
Halla Mohieddeen – One of the ways Shein keeps its prices low is by avoiding physical stores. Major fashion brands have an offline presence, even with online shopping. But not Shein – they only do temporary pop-ups.
Sheng Lu: Shein doesn’t have any physical store. So, that’s number one and a second is about the kind of product you can find.
Halla Mohieddeen: The number of styles on Shein’s website or its apps seems endless. Fast fashion disrupted the industry in its early days. It was revolutionary to have new styles every month, or every week of the calendar year.
Newsreel: H&M changes its merchandise all the time, and the turnover keeps customers coming in.
Newsreel: Zara is a fast-growing chain that can produce and distribute clothing in less than a month.
Halla Mohieddeen: But that’s a trickle compared to the firehose from Shein.
Sheng Lu: According to my research, say Zara and H&M, they offer about 25,000 or 20,000 different styles of products to market in a year. Shein can launch up to 1.3 million products.
Halla Mohieddeen – One to three million new styles each year. It’s this sheer volume that is changing the entire industry. Terry says it’s technology on a whole new level that Shein has pioneered, software it developed that collects feedback at a rapid pace about what’s selling and what’s not, and what might sell next.
Terry Nguyen : Shein has been able to use technology to predict what kind of fashions will be in style. And it’s allowed them to really expedite their supply chain compared to their competitors.
Halla Mohieddeen – A brand like Zara may measure its turnaround from design to sale in weeks. Shein measures in days. Shein can react to trends much more quickly than Sheng, according to Sheng.
Sheng Lu: These fast fashion brands try not to predict what the markets will like. They attempt to keep up with the current trends in a given market. Then, they use their highly efficient or sophisticated supply chains to make these products readily available on the market.
Halla Mohieddeen: And that’s where the synergy with social media comes in. All of it started with TikTok.
TikTok video – I have three tops. All black and all giving off Western vibes.
TikTok video: Little top is giving schoolgirl.
TikTok Video: I have a lot of clothes that are appropriate for both work and internship.
Terry Nguyen : Terry Nguyen : I believe there is a lot synergy in Shein being a China-based company, and TikTok also being a Chinese product. Shein certainly had an advantage over the more Western-based competitors. It had the foresight to realize that it could be the next big thing in reaching more customers.
[MUSIC PLAYING]
Halla Mohieddeen explains how it works: Terry creates very small orders in factories.
Terry Nguyen: Say for example, they’re creating a new top, and they want to place, like, a hundred iterations of that top to be made. They then put it on the website and wait to see if it sells quickly. They may have to order between 300 and 500 units for Shein, as opposed to an ultra-fast fashion retailer like Fashion Nova. Their website can be inundated with many styles, and they can produce more designs and sell fewer tops. And whichever ones go viral on TikTok overnight, they’ll be able to ramp up production on the garment, like almost instantaneously, depending on demand.
Newsreel: Real time retail. Clothing can be produced in three days by companies that disrupt the status quo.
Newsreel: They sell clothing at pocket-money prices and add 30,000 items per day.
Halla Mohieddeen : Shein believes that cargo pants will be back for fall. Shein can test them in highlighter colours and in chequerboard. Shein also has the option to order a few from their suppliers. They can order more if the zebra print sells well. If the chequered print flops – well, they’re already onto something else.
Sheng Lu: It doesn’t really have to care. It launches new products on the market, which then excites the customers.
Halla Mohieddeen: Shein’s been compared to the Uber of the fast fashion industry, and that’s because of its on-demand order system.
Terry Nguyen: An analyst kind of described it to me as every new design is kind of a bet, but it’s able to take more bets than its other fast fashion competitors by virtue of their unique relationship to factories in China, and within that sort of, like, commercial region.
Halla Mohieddeen says that Shein is based in the same place as its factories. Many fast fashion companies subcontract out their orders to third parties, so they might not be able to follow all steps of their supply chain.
Newsreel: There’s always business in subcontracting, even if it means putting the finishing touches and garments before they’re shipped out.
Halla Mohieddeen: There still is a lot that we don’t know about Shein’s supply chain. Rest of World conducted an investigation and found that the outlet works with around 6,000 Chinese garment factories. It also appears that many of these factories have closer relationships with the workshops that produce the items.
Newsreel: The company’s reputation for making timely payments to suppliers, a rarity in the industry, meant factories that would normally accept orders of a minimum quantity were eager to take on Shein’s orders
Halla Mohieddeen says: It is hard to believe that clothes are coming in such a steady stream and at such low prices. This raises many questions. How are the workers treated How are the materials made? How long does the clothing last? We’ll talk about the efforts to get answers to those questions in a moment.
Sheng Lu: I have to admit there’s still many unanswered questions regarding Shein’s supply chain.
Halla Mohieddeen: And it’s hard to get answers from Shein. The company didn’t reply to our request for comment for this episode.
Halla Mohieddeen was named in 2021 as the most opaque major fashion company in the world. Much remains a mystery, particularly regarding the workers who make the garments. One Swiss NGO’s investigation of workers at six different factories in the Chinese city of Guangzhou found long hours, no fire exits in the factories, and even barred windows.
Terry Nguyen: The company has not publicly disclosed workers’ wages or their hours, or essentially even the conditions.
Halla Mohieddeen: And Sheng said that’s running up against a trend in the industry toward more supply chain transparency, not less.
Sheng Lu: This means that we don’t just want to know the final assembly of the products. Like if you look at the product label, it will tell you it’s made in China, it’s made in India, made in Vietnam, but that label only reflects the last stage of production that is which country assembled the finished garments, but who makes the fabrics okay, who makes the yarn, who made the fibre. This information is not available.
[MUSIC PLAYING]
Halla Mohieddeen: And that’s a concern because much of the world’s cotton comes from Xinjiang province in China, where human rights groups have uncovered evidence of forced labour. The US has targeted Xinjiang cotton for an import ban, but it’s almost impossible to sort out where raw cotton comes from. So, if Shein or any other brand is using it, it’s easy to get lost in the supply chain. Sheng claims that some brands are working with new technology to make such information easily accessible.
Sheng Lu: I believe Shein should do the same. But I assume that to do that will be a lot more challenging because they’re selling so many different kinds of products.
Halla Mohieddeen: So, Shein has changed the game for fast fashion production, but what’s happening now is it’s also changing the habits of consumers, especially in the US.
Newsreel: Americans buy about five times more clothing than they did back in 1980, and one study suggests we wear each item, an average of – just listen to this – seven times.
Halla Mohieddeen: So now, if you can buy a year’s worth of clothes for a few hundred dollars, for the people posting their new outfits on social media, it starts to redefine what a year’s worth of clothes looks like.
Newsreel: Clothing is worn for two weeks, then thrown away.
Newsreel: There’s still a stigma associated with outfit repeating. You see some products and it’s just garbage. You sort of fold it up and you think, yeah, you’re gonna wear it Saturday night to your party. And then it’s literally gonna fall apart.
Sheng Lu says: I used to wear clothes for about a half-year in the past. Now I can afford to buy two units of clothing for less than $10, whereas I must wear them so many times. You can also change your lifestyle and change how you shop for clothing.
Halla Mohieddeen: It’s behaviour with drastic environmental consequences. Once you’re done with that year’s worth of clothes, where does it go? All fast fashion is more disposable by nature, but as Sheng said, Shein’s business model takes it to another level. That means that textile waste is already a significant pollutant around the globe and will only get worse.
Newsreel: Millions of discarded garments make their way overseas and they’re causing an environmental disaster.
Newsreel – The United States is the leader in exporting used textiles. Each year, more than 1.5 million pounds of used textiles are exported from the United States.
Newsreel – Ghana is a country that dumps 70 tonnes of fabric per day into landfills. This is an ecological disaster.
Terry Nguyen: I think people need to realise that if even if you’re donating clothes, a lot of the times those clothes don’t make it onto resale racks. And they’re essentially shipped overseas to developing countries, where the trash is essentially burned.
Halla Mohieddeen: Shein has made some minor moves toward sustainability, including donating $15m to an organisation in Ghana, one of the world’s largest markets for secondhand clothing. Critics have called it an empty gesture. But Sheng does say that the responsiveness of Shein’s supply chain could become a force for good.
Sheng Lu: Many products, you know, they’re simply not welcome, are not needed, not wanted by the consumer. They’re forecasted by fashion companies, but you know, they’re kind of wrong judges. But if Shein can really, you know, leverage their big data to really produce or launch products wanted by the consumer, I think that’s a great thing for the entire industry.
[MUSIC PLAYING]
Halla Mohieddeen: Among Sheng’s fashion students at the university where he teaches, he said they’re split on the company, and that reflects its polarising place in the industry.
Sheng Lu: About half of the participants are excited about this company. They love all the variety they have on the app and website. But also many students, they’re concerned about the environmental impact of Shein.
Halla Mohieddeen: When digging into the story behind Shein’s success, it made Terry look at those ads in her social feeds a bit differently. This is not only about the ethics of the brand but also about what is driving her choices.
Terry Nguyen: It kind of leads me to think more critically about the styles that I see and like why I choose certain types of clothes and whether that’s manufactured. If it’s a coincidence or if it’s part of this greater fast fashion machine, that’s just trying to get me to buy into whatever’s trendy.
Halla Mohieddeen
Terry Nguyen: Shein’s price point speaks for itself and it will be a very fierce competitor depending on who wants to emerge next, because really, like, how much lower can you go?
Halla Mohieddeen: And that’s The Take. Alexandra Locke produced this episode with Chloe K. Li (Chloe K. Li), Ruby Zaman, Amy Walters and Negin Owliaei. Halla Mohieddeen was the producer. Our engagement producers are Aya Elmileik, Adam Abou-Gad. Alex Roldan serves as our sound designer. Ney Alvarez is Al Jazeera’s head of audio. We’ll be back.
Episode credits
Alexandra Locke produced this episode with Chloe K. Li (with Ruby Zaman), Amy Walters (with Amy Walters), Negin Owliaei and Ashish Malhotra) and Halla Mieddeen. Our engagement producers are Aya Elmileik, Adam Abou-Gad. Alex Roldan serves as our sound designer. Ney Alvarez is Al Jazeera’s head of audio.