What we know about Shein’s success – and what we don’t.
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 reportedly been valued at $100bn and it has been ranked the top shopping app in dozens of countries. But Shein is still full of unknowns, including big questions about its working conditions and its materials. So what we know about its success – and what we don’t – tell us about the future of fast fashion.
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Full episode transcript:
This transcript was created using 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 TheTake@aljazeera.net.
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 a 100 billion online company.
Newsreel: It was the number one shopping app in 56 countries.
Newsreel: It overtook Amazon as the most downloaded shopping app in the iOS app store.
Halla Mohieddeen: It flew under the radar for a long time. 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. But Shein is still full of unknowns.
Newsreel: Shein is a very secretive company and shares little publicly 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. And at Shein, their money goes far.
Haul video: We are doing a $600 Shein haul. As you can tell, it’s a huge package.
Haul video: I’m back at it again with a massive haul from Shein. Man, you see the box.
Haul video: Shein always has a sale and always has coupons.
Haul video: I love it. I love this. 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. You can just essentially buy an entire outfit, accessories, and shoes for under $30.
Halla Mohieddeen: That’s journalist Terry Nguyen from Dirt Newsletter.
Terry Nguyen: I am a reporter covering culture and entertainment at Dirt, and I was formerly covering consumerism and the internet 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. For Terry, the item haunting her most recently was an exercise dress, not just from Shein, but from many different 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. I see them 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: When I went on TikTok and started using it a lot during the pandemic, I sort of noticed my awareness of Shein kind of rapidly increased just because there was so much content. Whether it be, you know, people sharing their hauls or like what cute trending tops they got from Shein, it just felt quite ubiquitous.
Halla Mohieddeen: Terry covers the consumer side of fast fashion. But we also wanted to hear about the supply, so we spoke to Professor Sheng Lu at 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: But Sheng said he does learn from his students. That’s how he heard about Shein.
Sheng Lu: My students are now Generation Z, and they shop a lot. And I just notice, maybe during the class break and they check their iPhone, their iPad and just visit an app called Shein.
Halla Mohieddeen: So Sheng dug into how Shein beat so many fast fashion companies at their own game. The biggest difference that consumers notice is the price. 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. So, this makes Shein very different, very different to me.
Halla Mohieddeen: Terry shared some of the numbers she’s seen.
Terry Nguyen: You can definitely find deals for, you know, simple tank tops or shirts from anywhere as low as, like, $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: And one of many ways that Shein keeps those prices low is through its lack of physical stores. Even with the rise of online shopping, most major fashion brands still have an offline presence. 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. Back when the industry was first disrupted by fast fashion, it was radical to have new styles every month or every week of the year.
Newsreel: H&M changes its merchandise all the time, and the turnover keeps customers coming in.
Newsreel: Chains like Zara are so fast, they can design and manufacture clothing and get it on store shelves in 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 as many as 1.3 million.
Halla Mohieddeen: One point three million new styles every 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 managed to use technology and develop technology that kind of anticipates what sort of styles would be trending. And it’s allowed them to really expedite their supply chain compared to their competitors.
Halla Mohieddeen: A brand like Zara might measure its turnaround time from design to sale in weeks. Shein measures in days. And as Sheng says, Shein is able to react much better to trends.
Sheng Lu: Fast fashion brands, they try not to predict what markets may like. They try to follow the popular trends already in a market. And then through their very sophisticated or efficient supply chain try to make these products available in the market.
Halla Mohieddeen: And that’s where the synergy with social media comes in. It all started with TikTok.
TikTok video: I have three tops, all black, all give off Western vibes.
TikTok video: Little top is giving schoolgirl.
TikTok video: So I have a bunch of clothes that is going to be office appropriate, internship appropriate.
Terry Nguyen: I think there is a lot of synergy, in that Shein is a China-based company and TikTok is also a Chinese product. And I think Shein definitely had an edge over its more Western competitors. And it sort of had the forethought to realise that it might be the next big thing to reach more customers.
Halla Mohieddeen: Terry explains it works by creating very small orders at 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. And then they put that on the site and they wait to see how quickly that sells out. Compared to maybe an ultra-fast fashion retailer, like Boohoo or Fashion Nova, they might have to order about 300 to 500 units for Shein. And they can essentially make more designs and even sell less tops, but still manage to kind of inundate their website with a variety of styles. 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. Companies disrupting the status quo produce clothes in as little as three days.
Newsreel: It sells clothing at pocket money prices, adding 30,000 new items a day.
Halla Mohieddeen: So, say Shein detects that cargo pants are making a comeback for fall. Shein can try them in highlighter colours, in zebra print, in chequerboard, with pockets, without, just ordering a few dozen of each item from their suppliers and seeing what sells. If the zebra print does well, they can order more. If the chequered print flops – well, they’re already onto something else.
Sheng Lu: It doesn’t really have to care. It just keeps launching new products to the market and then excites the consumers.
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: That relationship comes partly from Shein being based in the same country as its factories. Many fast fashion companies subcontract their orders out to the point where they may not necessarily even know all the steps in 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. An investigation by the outlet Rest of World found it works with about 6,000 Chinese clothing factories, and it appears that they do have more direct relationships with many of the workshops producing 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: But when the clothes just keep coming, and the prices are so low, it raises one question after another. How are the workers treated? What is the quality of the materials? And how long do the clothes 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: It was ranked in 2021 as one of the least transparent major fashion companies in the world. A lot is still a mystery, especially surrounding the workers making 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: Which means not only do we want to know who finally assembled the finished 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.
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 says some brands are trying to use new technology to make this information accessible.
Sheng Lu: And I think Shein, you know, probably should also 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: People wear clothes for just, like, two weeks and then just discard them.
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: So, in the past I will wear clothing at least for like a half a year, for example. But now I can really spend less than $10 to purchase two units of clothing while I have to wear so many times. Or I can probably simply change my lifestyle or change my shopping behaviour 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. And that means textile waste, already a huge pollutant across the world, is only going to get worse.
Newsreel: Millions of discarded garments make their way overseas and they’re causing an environmental disaster.
Newsreel: The US leads the world in exporting used textiles. More than 1.5 billion pounds are shipped out of the country every year.
Newsreel: In Ghana, 70 tonnes of fabric a day ends up in landfills, presenting 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 labelled 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.
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: Half of them are very excited about this company. They like all the different kind of choice they can find from the website or from their app. 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. Not just about the ethics behind the brand, but what is driving her choices in the first place.
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: And when forecasting the next trend, the question for all of us is what could disrupt Shein?
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. This episode was produced by Alexandra Locke with Chloe K. Li, Ruby Zaman, Amy Walters, Negin Owliaei, Ashish Malhotra, and me Halla Mohieddeen. Aya Elmileik and Adam Abou-Gad are our engagement producers. Alex Roldan is our sound designer. Ney Alvarez is Al Jazeera’s head of audio. We’ll be back.
This episode was produced by Alexandra Locke with Chloe K. Li, Ruby Zaman, Amy Walters, Negin Owliaei, Ashish Malhotra, and Halla Mohieddeen. Aya Elmileik and Adam Abou-Gad are our engagement producers. Alex Roldan is our sound designer. Ney Alvarez is Al Jazeera’s head of audio.
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What we know about Shein’s success – and what we don’t.