Fast fashion

Shein: successful cheap fashion with a bad reputation

The Shein range comprised 1.5 million different items last year.

(Bild: AFP)

A summer dress for 6.95 euros, a bracelet for 57 cents: Chinese fashion company Shein is flooding the market with unbelievable bargain prices and a huge selection. France wants to impose penalties on Shein and other low-cost suppliers in future. The accusation: fast fashion exploits seamstresses and harms the environment with its inferior disposable garments made from synthetic fibers.

The Shein range comprised 1.5 million different items last year, as fashion expert Sheng Lu from the US University of Delaware found out. The Spanish fast fashion brand Zara only had 40,000 products.

Normally, such diversity is associated with enormous risks and production costs. "Shein only manages this because they are extremely flexible and have very little waste in their warehouses," says Rui Ma, an expert on Chinese companies and founder of the Tech Buzz China newsletter.

"We test and produce new products in small initial quantities of 100 to 200 units," Shein explained when asked by the AFP news agency. "This allows us to collect customer feedback in real time and only reorder the products that our customers really want." This avoids overproduction.

Shein also saves on design. The company analyzes user search data and tracks trends on social media to design models that are almost certain to sell. Shein often seems to simply copy designs from other brands, as the many lawsuits for copyright infringement suggest.

(Bild: Krone KREATIV)

Big in business
According to the Wall Street Journal, Shein achieved a turnover of 23 billion dollars (around 21 billion euros) and a net profit of 800 million dollars in 2022. Two years ago, the online retailer, which was founded in 2008, moved its headquarters from China to Singapore in order to escape the increasingly extensive control of the Chinese authorities, according to analysts.

Nevertheless, the company benefits from the unique combination of a huge, low-cost textile industry and highly developed e-commerce technology and logistics networks in the People's Republic. "Theoretically, Bangladesh could probably sell garments even cheaper than Shein. However, unlike in China, the system is not in place there to market and sell them abroad," says Allison Malmsten, China expert at the consultancy firm Daxue Consulting in Beijing.

Tightly organized
Shein's on-demand strategy only works with a tightly organized supply chain with more than 5,000 producers. Chinese media report on districts full of small workshops that sew for Shein. Those who do not deliver fast enough are sorted out, they say.

Shein tries to refute the criticism that its business model is based on exploitation and environmental destruction. Regular audits by third parties guarantee fair wages, the company explains. In addition, production based on demand avoids waste.

Omnipresent
Despite the bad reputation of fast fashion, Shein has many fans. They argue that the company makes fashion affordable for people on a budget, especially in plus sizes. The online retailer cultivates this image by paying influencers with money and clothes for advertising. Consumers are literally bombarded with them, says analyst Malmsten. "Everywhere you look online, you see Shein products."