Note: this is the script of what was supposed to be a video essay. I did most of the research and writing in October of 2022, but I eventually got burned out while trying to edit the 20-minute long video and decided to table it for now. I still wanted to release the script while my research is timely.
SOURCES/NOTE
To easily circumvent paywalls on websites like the Wall Street Journal, New York Times, and many others, I highly recommend using the “Bypass Paywalls” Chrome extension: https://github.com/iamadamdev/bypass-paywalls-chrome.
Archived websites can take a long time to load; to more easily read sources that have been archived, I recommend downloading the archived version with the Pocket extension: https://chrome.google.com/webstore/detail/save-to-pocket/niloccemoadcdkdjlinkgdfekeahmflj?hl=en. Downloading web pages with the Pocket extension can also help to circumvent paywalls on some sites.
I did not use many Chinese-language sources in my research due to the language barrier. Jiemian, which I referenced, can be translated and read in English with Google, but I can’t attest to the accuracy of the translation.
INTRO
If you’ve been on any popular social media in the past two years, you’ve almost certainly heard of Shein, a Chinese-run ultrafast fashion company now selling a wide variety of apparel, jewelry, makeup, and even home goods, for extremely low prices. The company has become a staple for teens and young adults who are on a tight budget but still want to follow fashion trends. In May of this year, Bloomberg estimated that Shein now makes up 40% of all US fast fashion sales—up from 18% in March 2020. The Wall Street Journal estimated that Shein is worth $100 billion as of July.
But Shein has also drawn attention from different watchdog organizations and labor advocacy groups. Not only does the company produce an extremely high volume of its wares; its products are released at a faster rate and sold at a lower price than virtually all of its competitors’. Additionally, Shein is notoriously secretive about its internal operations, and has lied about having certifications from the ISO and the Social Accountability Standard (SA8000). As a result, many people have questioned whether Shein’s products are manufactured under safe and ethical circumstances. This video will discuss what we know about Shein’s operations, and the potential drawbacks of buying this company’s products.
COMPANY BACKGROUND
According to Shein, the company’s founder, Xu Yangtian, or Chris Xu, specialized in “search engine optimization” and studied at either George Washington University or Qingdao University of Science and Technology. A lot of the available information about Xu’s life is unconfirmed or conflicting.
It is known that Xu began a startup called Nanjing Dianwei Information Technology with two business partners, Wang Xiaohu and Li Peng, in 2008. They began selling items such as teapots and mobile phones. Xiaohu and Peng said that the company later began to sell clothing, purchasing and reselling sample items from Guangzhou, a large city in southwest China which is a major hub for clothing manufacture. However, Shein disputes this, claiming that the Nanjing Dianwei company never sold any clothing. Xiaohu and Peng claim that after a year of business, Xu stopped working with his associates without warning, taking the company money and starting his own new venture alone. (Shein claims instead that Xu “separated peacefully” from the project and did not have control over its money).
In 2011, Xu founded SheInside.com, which would eventually be shortened to “Shein” in 2015. He was an early adopter of social media as a tool to promote his site, advertising Shein on platforms like Pinterest. The site continued to rise in popularity throughout the 2010’s, but it was during the COVID-19 pandemic that it began to see record-breaking profits. While many people were in lockdown and spending lots of time on their phones, the Shein app rose in popularity, unseating Amazon as the most-downloaded shopping app. The brand grew popular on TikTok, where “Shein hauls” became an entire subgenre of content, where people purchased hundreds of dollars’ worth of cheap Shein garments and modeled them in front of the camera.
LET’S GO SHOPPING
It’s autumn and I know we’re all in the mood to be cozy; let’s go shopping for some sweaters together. Shein is currently selling trendy sweaters for less than $25. These prices are nowhere close to those of its competitor Zara, the company that is often considered to be the originator of the fast fashion industry; at Zara today, shoppers can scarcely find a sweater for less than $45. The prices are a bit better at other fast fashion stores like Forever 21 and H&M, but price-wise, Shein still has them beat.
Taking a look at some of Shein’s other inventory, we can see plenty of blouses and tops being sold for less than $10. Full-length dresses are selling for about $15; coats are going for $25. In addition, the site is entreating us to purchase $50 of its inventory to get free shipping, and to register an account in order to get 15% off our order. So while we could go somewhere like Zara and get one sweater for almost $50 and spend several dollars on shipping, we could get about two sweaters or five blouses from Shein for an even lower price and pay absolutely nothing to have it shipped all the way from China.
If we came back to Shein’s site tomorrow and again the next day, another thing we’d notice is that the inventory is constantly changing, and these categories at the top are updated all the time to reflect the latest trends. Whatever the biggest TikTok influencers are wearing this week, it’s being sold cheaper than dirt on Shein. In addition, there’s always some kind of flashy sale going on urging users to purchase a greater quantity of clothes. Longtime Shein users have described the experience of shopping here as game-like; they’re constantly stacking different items and checking new inventory, seeing exactly what they can purchase for the smallest amount of money. In a way, it becomes addictive.
HOW IT WORKS
Shein’s garments are made in thousands of warehouses scattered throughout the Guangdong province of China. The exact number of operations that supply clothing for Shein isn’t certain for reasons we’ll discuss later, but last year Rest of World estimated that Shein had about 6,000 suppliers. All of these operations are connected virtually via a system that updates each factory on how much of each clothing item is being sold and informs them of the schedule they must follow. Factory owners receive daily orders for Shein directly to their phones.
Shein’s business model is extremely profitable, but it’s entirely different from the way other companies do things. For instance, earlier I described Zara as the originator of fast fashion. In the 1990’s, Zara began to outsource its labor to countries with more relaxed labor laws than the US and pump out new designs every 3-4 weeks; before then, brands normally worked at a slower pace and focused their new releases around the seasons of the year. Zara set a precedent for companies to produce their garments more rapidly. But companies like Zara have far fewer suppliers than Shein, and the orders they place for each factory are often for several thousand units of each garment.
Shein’s factorys’ daily orders are small, often fewer than 100 items, and their production cycle makes Zara’s look sluggish. Shein, on average, takes only 7-10 days to design a new clothing item, produce it, put it online, and begin shipping it to customers. The volume of new items Shein comes up with dwarfs other brands, as well; Sheng Lu, a professor of fashion and apparel who studies the global textile market, found in his independent research that between July and December of last year Shein uploaded 20 times as many new items to their site as Zara and H&M did, with between 2,000 and 10,000 new Shein designs launched every single day during those five months.
It seems that Chris Xu’s business model hasn’t changed much since his time reportedly selling clothing at the Nanjing Dianwei company—he’s still pushing to fulfill a high volume of very low-cost, low-risk orders. This way, if an item doesn’t sell well, Shein can simply take it off their site without losing much money; but if an item does perform well, Shein can order more of it from its suppliers the very next day. Shein also has an advantage over other traditional fast fashion companies because it has no physical stores. Shein wastes no time producing for and shipping clothing to brick-and-mortar establishments, where they would have to guess on which items might be successful in a given area. Everything about Shein’s production cycle is lightning-fast, efficient, and direct-to-customer.
LABOR PRACTICES
Dozens of small workshops produce clothing for Shein in Nancun Village, Guangzhou. Nancun is one of many “urban villages” in this area of China: crowded developments of closely-spaced buildings, where many migrants from poorer backgrounds come to work in the textile industry.
Last year, the Swiss watchdog organization Public Eye travelled to Nancun and launched their own investigation of Shein’s labor practices, interviewing people who work in Shein’s factories. The Nancun workers they spoke to reported working up to 75 hours a week and having only one day off each month. Most of them had “years or decades” of experience in the textile industry, which enabled them to fulfill orders rapidly; most of them were also migrants from other Chinese provinces. Additionally, none of the workers they spoke to had signed employment contracts. Although it isn’t uncommon for workers in this industry to be uncontracted in very small Chinese workshops, Chinese law does state that operations of more than 100 people must have contracts.
Public Eye also interviewed workers in a major Shein supplier in Foshan, about 22 miles from Nancun Village. The warehouse, called “Ambo,” employs roughly 10,000 people and operates 24 hours a day, 365 days a year. The Foshan workers reported working under similar conditions to their colleagues in the smaller Nancun Village factories: their work days were 12-14 hours long, 24-28 days every month.
While Public Eye found in their interviews that the workers in these factories were earning well over the average monthly wage for people in this area of China, they noted that the people in Nancun and Foshan were working the equivalent of two full-time jobs inside cramped factories whose aisles were dangerously crowded with textiles and boxes. Did they receive the equivalent of two full-time salaries for their efforts? No. “Shein systematically takes advantage of the fact that these employees are prepared to forgo even a minimum degree of safety, free time and quality of life, because they feel that they don’t really have an alternative,” they wrote.
Sixth Tone, a Chinese publication, also launched their own research into Shein’s operations last year. They resorted to interviewing workers in Guangzhou factories they described as “unregistered,” as the contracted Shein suppliers they reached out to declined to speak. The owner of the first unregistered factory they spoke to reported that his employees worked 15 hours a day; he had no direct ties to Shein, but instead was producing clothing to help his “friend,” who worked for a contracted Shein supplier, meet his quotas. Sixth Tone also interviewed factory workers in South Village and Tangbu West Village, other “urban villages” in Guangzhou similar to Nancun.
Sixth Tone spoke to an anonymous Shein supply chain analyst, who confirmed that the system of “casual subcontracting” was common, and claimed that Shein was trying to gain “greater control” of subcontracted factories. According to the analyst, Shein is aware that many factories outsource their labor to smaller operations in the Guangxi region and Jiangxi province, where wages are lower than in Guangdong province.
A bit ago, I said we would talk about the reason why the exact number of Shein suppliers is uncertain. Well, this is why: Shein’s primary suppliers often appear to outsource their labor to smaller operations, which are unregistered. They’re “subcontracted” in name only—in reality, most of these little manufacturers have no formal contracts with Shein or its suppliers at all. This is profitable to Shein’s suppliers, since they can get away with paying workers in provinces outside of the Guangdong province even less than they pay their workers in the city of Guangzhou. And while Shein claims that it’s trying to gain better oversight of these operations, I don’t see what their motivation would be; they’re clearly profiting from having these tiny external manufacturers in their supply chain.
It's for this reason that some people have raised concerns that Shein’s suppliers may be using forced labor. It’s known that about 80% of China’s cotton comes from the Xinjiang region in northwest China, which is infamous for the forced labor of the area’s Uyghur people. Since Shein is all about producing their clothing as cheaply as possible, and it arguably incentivizes its own suppliers to outsource their labor to make the biggest possible profit—without requiring these operations to maintain contracts or be subject to company oversight—it doesn’t seem unlikely. When asked earlier this year in a Wired interview, a Shein spokesperson declined to say whether the company uses cotton from Xinjiang “given the politics of it.”
In 2021, Shein published an audit of 700 Shein suppliers as part of their Shein Responsible Sourcing program. In it, Shein reported that only 2% of the 700 factories were operating with labor practices and safety conditions that they considered to be “outstanding,” and the majority of the factories scored as “mediocre.” More concerning, Shein admitted that 12% of the 700 factories audited displayed what they described as Zero Tolerance Violations, which include forced labor, underage labor, severe health and safety violations, and serious environmental pollution. According to the report, most of the violations they found were related to fire safety and emergency preparedness. In the report, Shein stated that the factories who displayed Zero Tolerance Violations were required to take immediate action to improve their operation; if the violations didn’t cease within a period of 30 to 90 days, the factory would allegedly be shut down.
My concern with this program is that there may not be any strong authority holding Shein accountable to actually make the changes they’ve promised here. It seems that many of the known factories supplying clothes for Shein do not conform to Chinese labor laws or safety standards, and yet the operations have been allowed to continue for years. Neither has the court of public opinion pushed Shein to take action; in spite of widespread criticism, the company continues to grow and expand itself. Plus, as far as I can tell, Shein didn’t include any of its unregistered suppliers in this analysis. And given what we know, the unregistered suppliers are the ones that we should probably be most concerned about—they’re the operations that are subject to the least oversight.
To summarize everything we’ve talked about in this section: we don’t know where all these clothes are produced, and neither does Shein. We have evidence that many of the people who manufacture clothing for Shein are subject to unsafe working conditions and forced to work long hours without receiving fair compensation. We also have reason to suspect that some of Shein’s subcontractors may be engaged in darker actions, such as forced or underage labor. Shein’s own self-report doesn’t exactly inspire confidence in me—they were literally able to pick and choose the suppliers they wanted to include in their audit, and yet they still found roughly 84 out of 700 to be guilty of extreme violations of safety and labor practices. In the words of Yan Huang, a professor who studies Chinese labor practices, Shein’s decentralized production process means that “It’s easier for manufacturers to ignore their responsibilities, and it’s easier to obscure the voices of workers.”
HOW WE CAN HELP
Shein is remarkable at circumventing laws that would require them to sacrifice profit. Although the US is the cornerstone of their market, they manage to pay virtually zero American import taxes by keeping all their shipments below $800—the price at which the 1930 Tariff Act decided imported packages must pay fees. But obviously the global trade market looks a bit different today than it did over 90 years ago—with the popularity of online shopping, millions of packages from around the world are coming into the US from overseas every single day.
In January of this year, an US representative from Oregon, Earl Blumenauer, proposed the Import Security and Fairness Act. This bill would get rid of the import tax exemption on units costing less than $800, and it would also require more information to be gathered on the origin of packages coming in from overseas. In his press release about the Bill, Blumenauer explained: "As long as foreign companies that sell their goods in America are splitting up their shipments to evade tariffs and oversight, American businesses will continue to be put at a competitive disadvantage cost-wise.” He also explained that the $800 loophole “makes it easier for people to import illegal goods and harmful products, because there is virtually no way to tell whether these packages contain products made through forced labor, intellectual property theft, or are otherwise dangerous." In a May interview, Blumenauer confirmed that Shein was one of the biggest beneficiaries of the tax exemption status for packages of less than $800, and that it was one of the primary companies he was concerned about.
Unfortunately, this proposed act is still idling in Congress’s drawer, and there’s no telling if it will ever be signed into law—but in my opinion, it would be a step in the right direction. Some might argue that companies like Shein wouldn’t be harmed much by the act, since they will just raise the prices of the items on their site, forcing customers to pay the import tax. I digress. If Shein raises their prices, it could put them on a more level playing field with their fast fashion competitors, encouraging customers to consider different options for purchasing goods rather than buying every conceivable wardrobe item, household good, gadget, or makeup item on Shein for the price of a Buffalo nickel. It could ultimately harm their profit margins—which would be a good thing.
But the biggest thing that we can do about this situation as a collective is to stop buying cheap shit from Shein and all its lookalikes—Aliexpress, Fashion Nova, Boohoo; when you dig into it, they all appear to be involved in similarly shady practices. We need to stop gassing up every single Shein-related microtrend that bubbles to the surface of TikTok—the strawberry dresses, the prismatic blushes, the cropped argyle sweaters—and we need to stop giving their site and their social media platforms traffic and engagement.
I think people really underestimate the collective bargaining power they have as consumers. Boycotts work—they just require widespread awareness of the issue at hand, and a powerful motivation for people to avoid supporting a harmful entity. My favorite example of this is about thirty-some years old, but it’s the decline of the veal industry. In the 1980s, about 3.4 million calves each year were subjected to inhumane treatment to produce veal; but after the Humane Farming Association began a strong campaign that educated people on the realities of veal production, that number dropped by about a million calves in three years. Today, only half a million calves are annually raised for veal.
As a marketplace, we have the power to castrate Shein. We just need to make people aware of the information I’ve shared in this video: Shein throws an unknown number of workers spread across thousands of Chinese factories under the juggernaut in order to make Chris Xu richer each year, and the iceberg may go as deep as literal slavery—we have no idea how far Shein is willing to go, but they truly seem to be hiding something sinister from consumers. And we need to decide, as a society, that following these trends is not as important as boycotting the ultrafast fashion ecommerce industry.
Comments
Post a Comment