Shein is a remarkable company. The Chinese fast fashion brand (pronounced She-In after its original name, Sheinside) has contrived to conquer the world so rapidly that many people have not noticed, aside from its millions of bargain-conscious, social media aware, Generation Z fans.
Its low profile comes in handy, given the criticism that rivals have faced for selling cheap clothes sewn by low-paid workers. Boohoo, the UK brand that also appeals to teenagers and shoppers in their early twenties, is facing an investor rebellion on Friday over a labour abuse scandal, with some suppliers having paid far below the minimum wage.
Shein has done its best to remain private, despite having overtaken Amazon as the most downloaded shopping app in the US last month. TikTok and YouTube fans parade their “Shein hauls” of £8.49 floral dresses and £15.25 chunky mules, yet the company appears “generic, storyless and nationless”, as one analysis put it. Its app provides few clues to its national origin.
Anonymity is getting harder, given that it is reported to have sold $10bn of clothing last year as the pandemic encouraged online orders. Several companies and designers, including AirWair International, the maker of Dr Martens boots, have taken legal action against Shein for allegedly copying designs and infringing trademarks. “They’re infamous for what they do,” one told the FT.
This feels like a throwback to the past, when Chinese companies were known for cheaply imitating western brands, and Shein is certainly cheap. But it is also innovative: it has refined the fast fashion model pioneered by Hennes & Mauritz and Zara’s owner Inditex, in which clothes move from design to production in as little as three weeks.
Shein has accelerated into what Matthew Brennan, author of a book on TikTok, calls “real-time retail”. It often designs and makes new clothes in less than a week, flooding its apps and online stores in 220 countries with new designs (4,981 “daily new” products were listed on Shein’s UK site on Thursday).
Its founder Chris Xu (also known as Yangtian Xu) started out in search engine marketing before selling wedding dresses and other clothes online, and Shein is natively digital in a way that older rivals such as Zara, which was founded in 1975 and has 2,000 stores, are not. It uses TikTok influencers and celebrities such as Katy Perry to make its bargains glamorous.
Shein’s cleverest trick is to plug its digital marketing funnel straight into its supply chain. It has grouped a network of factories and suppliers, all using its software, around a hub in Guangzhou and can adjust its production rapidly according to what sells, or even attracts clicks. It produces small batches of thousands of designs, then ramps up the popular ones.
It has been made possible by the internet but is reminiscent of an older Asian innovation — Toyota’s postwar “lean manufacturing” system, which the Japanese carmaker invented to eliminate waste by moving parts to production lines only when needed (or “just in time”). Shein has extended its own information chain from factories in the Pearl River Delta to shoppers on their global apps.
Curbing waste sounds ecological, and there are obvious benefits to making only dresses that women want, rather than producing masses for store shelves and having to dump the excess. Eventually, fast fashion could even become bespoke, with a piece of clothing being made only after someone buys it online.
Cider, a rival to Shein in which the US venture capital fund Andreessen Horowitz has invested, calls itself “a globally minded, social-first fashion brand” that sees “a collective future where we can reduce waste and make zero inventory a reality”. If Shein sheds its reticence to go public (it says it has no short-term plan for an initial public offering), it will need a similar pitch.
This is only half the story, though. Even if little is wasted in production, real-time fashion encourages excess, as the shopper discards one piece of clothing to buy another. A group of environmental scientists called last year for “an urgent transition back to ‘slow’ fashion” by “decreasing clothing purchases and increasing garment lifetimes”. Shein is pulling the other way.
Shein’s shoppers are not too bothered yet. Although surveys find that Generation Z says it is committed to ethical consumption, it also likes affordable self-expression. That is encouraged by the company’s secrecy; it is easier not to worry about the origins of your clothes while they remain obscure.
Like other fast growth companies before, Shein can probably clean up some of its early transgressions. It has to avoid copying designs (it insists that it “takes swift actions” against suppliers that infringe intellectual property). It needs to eliminate the blunders caused by cultural insensitivity, such as selling a swastika necklace last year.
But one day, it will also have to cease being what one environmental ratings group calls “as opaque as a brand can get” and accept similar scrutiny to Boohoo of its supply chain and labour practices. Only then will the full story of real-time retail be known.
john.gapper@ft.com
