SHEIN is a Chinese fast fashion online retailer based in Singapore. Founded in Nanjing, China in October 2008 as ZZKKO by businessman Chris Shaw, SHEIN has grown to become the world’s largest fashion retailer as of 2022. SHEIN applied to over 150 countries and was valued at $100 billion after a funding round in April 2022
Known for selling relatively cheap clothing, SHEIN owes its success to its popularity among Z-generation consumers. The company was initially compared to Drop Shipping, where it was not involved in design and manufacturing, instead sourcing products from Guangzhou’s Balg Mill clothing market. Starting in 2012, SHEIN began creating its own supply chain system, transforming itself into a fully integrated retailer] The company established its supply chain in Guangzhou with a network of more than 3,000 suppliers as of 2022.
In 2019, the company moved its headquarters from China to Singapore for financial and financial reasons – while maintaining supply chains and warehouses in China. In 2022, SHEIN generated $24 billion in revenue, a total that approximates the volume of revenue of well-known retailers Zara and H&M. According to Bloomberg Business Week et al., Shane’s business model has benefited from the trade war between China and the United States, particularly in terms of tax benefits. In recent years, SHEIN has found itself in the middle of many controversies including trademark disputes, tax evasion, human rights abuses, and health and safety concerns.
Originally, She-in did not design her clothes. The company mainly sourced its clothing from China’s wholesale clothing market in Guangzhou. However, SHEIN became a fully integrated retailer in 2014 when she secured her supply chain system. Now, the company uses the network of manufacturing partners and suppliers to make and deliver its products.
SHEIN provides trend predictions and produces items as quickly as possible three days after trend identification. SHEIN also limits its orders to small groups of about 100 items to gauge customer interest, while its other competitors, such as Zara, order larger quantities (about 500), increasing their chances of losing profits if orders are not purchased in full. According to Bloomberg News, Shein’s micro-push strategy is seen as the key to her success. Suppliers working with SHEIN have also seen their business grow as volume has increased.
Environmental and health issues
In late 2021, Deutsche Welle released a video detailing the super-fast fashion system that Shein was built on, criticizing the targeting of young teens who are less likely to make wise financial decisions, as well as the resulting environmental impact. Other media outlets have pointed to the addictive nature of the app, noting that its low prices push people to buy things they don’t need. Due to the cost of Shein, most clothing is not of high quality and can lead people to dispose of it, exacerbating the problem of textile waste.
In response to criticism, SHEIN launched a resale service on its US app that allows buying and selling used Shein fashion. There are mixed reactions to the effectiveness of this initiative. Shein parts are very affordable and therefore customers may choose to buy a new item instead of buying a resale piece.
Concerns about lead toxicity
Sheen was also cited in a Marketplace investigation overseen by Professor Miriam Diamond at the University of Toronto for selling toddler jackets containing nearly 20 times the amount of lead allowed under Health Canada’s safety regulations. The company also sold a red wallet containing 5 times the allowable amount of lead. Shein Marketplace reported that they would stop selling the two items and stop getting supplies from matching suppliers until the issue was addressed.
Human rights and labour violations
Shen was accused of violating the rights of Chinese workers. In 2021, a public-eye investigation found that employees across six locations in Guangzhou were working 75 hours a week in violation of Chinese labor laws. Public Eye also discovered workshops with blocked walkways and stairs.
In August 2021, SHEIN claimed on its website that its factories are certified by the International Organization for Standardization (ISO) and SA8000. This was disputed and was seen as a violation of the UK’s Modern Slavery Act 2015. According to Reuters, Sheen was also violating a similar anti-slavery anti-slavery in Australia.
The Wall Street Journal reported that SHEIN has an in-house team to monitor supply chain partners. Independent agencies such as Intertek Group will also be involved to conduct audits.
In November 2022, Bloomberg News reported that SHEIN made cotton parel from Xinjiang amid the Uyghur genocide. Following the report, a coalition of U.S. senators wrote to Xin demanding information about the possible use of forced labor in Xinjiang for cotton products.
Legal experts note that SHEIN may be able to avoid the repercussions of the Uyghur Forced Labor Prevention Act as a result of a favorable tax loophole. A 2022 article in Fortune magazine notes that most SHEIN packages shipped to the US are worth less than $800 (minimum shipments), meaning import taxes are waived on them. According to attorney Manuel Levitt of Miller & Chevalier, the small size of these packages means it is unlikely that U.S. Customs and Border Protection (CBP) will “inspect these shipments under US$800 as much as a cargo container filled with goods bound for a brand store.”
In May 2023, a group of US lawmakers called on the U.S. Securities and Exchange Commission to halt Shein’s IPO until the company verifies that it does not use forced labor for its products.
Intellectual property theft
In 2018, Levi Strauss & Co. sued the company for copying a trademarked sewing Jean. The case was settled out of court. In 2021, AirWair International Limited, known for Dr. Martin’s genuine Dr. shoes was accused of “luring customers”, to which Sheen responded with a blanket denial of AirWair International’s allegations.
In March 2021, Ralph Lauren filed a lawsuit related to trademark infringement and unfair competition against parent company Shane. In the complaint, Ralph Lauren said that Zoetop Business Co. selling clothing with a label “confusingly similar” was an exploitation of its “goodwill and reputation for Ralph Lauren genuine products”.
In 2022, the Mexican Secretariat of Culture objected to Shein’s use of traditional Mayan designs, prompting Shein to remove them from its website.
Accusations of design theft by artists and retailers
Dozens of artists and petty retailers also accused Shien of stealing designs. Reclamare PH and Sincerely RIA, both small fashion brands, SHEIN copied their designs. Shien has also been accused of copying designs other than clothing such as enamel pins.
In 2018, Ilse Valfre, which owns the Los Angeles-based Valfré brand, was notified by its customers that SHEIN was selling “mirrors” of its products. Quinn Jones, co-founder of Kikay USA, said he found earring designs on SHEIN’s website very similar to Kikay earrings. In response to the controversy, SHEIN removed the products and pledged to abandon the supplier who produced the copied item. Elexiay also claims that SHEIN stole a pink and green crochet sweater design by hand, which cost $330 but was sold by SHEIN for $17.
To raise awareness of Shane’s actions and to help support independent brands and artists, the hashtag “Shin County” became popular on TikTok and Twitter in 2020. In 2021, Mariama Diallo, founder and designer of Sincerely Ria, accused Shane of stealing her designs in a tweet that included comparative images to prove her point.
Data and privacy issues
The company also suffered a data breach in 2018 that compromised the email addresses and encrypted passwords of 6.42 million users, prompting security experts to denounce the retailer’s “reactive cybersecurity strategies” and the inability to adequately protect its customers’ information. Later, it was established that the company lied about the number of compromised accounts and that 39 million users not only stole their passwords and usernames but also information related to their credit cards. In 2022, Zoetop, Shein’s parent company, was fined $1.9 million by US authorities for inadequate response to a data breach and attempting to reduce the seriousness of the breach. In 2023, the United States accused Temu and SHEIN of data risk in the recent action targeting Chinese-backed apps.
Block apps in India
In June 2020, the SHEIN app was banned in India due to privacy concerns. India’s Ministry of Electronics and Information Technology has classified SHEIN along with 59 other Chinese apps under Section 69A of the Information Technology Act 2000, saying “Receiving reliable up-to-date input that such applications pose a threat to the sovereignty and integrity of India, the Government of India has decided not to allow the use of […] Both [on] devices that support mobile and non-mobile internet. Section 69A gives the central government “the power to issue directions to prevent public access to any information through any com computer resources.”
Criticism of offensive images
In July 2020, a necklace with a swastika was reported and later removed from the site in response to widespread public criticism; the brand clarified that it was a Buddhist religious symbol, not a Nazi swastika. In May 2021, Shane received criticism for presenting a phone case with a picture of a handcuffed black man illustrated with chalk. Shen issued an apology for the offensive image, and also for using the image without the permission of the person who created the design.