The Shein Story: The Rise of Fast Fashion's Most Controversial Giant

In the world of fast fashion, Shein has quickly become one of the biggest names, but its success and practices have stirred significant debate. What are the ethical implications of Shein? 

A Quick Look at Fast Fashion

Fast fashion revolutionized the clothing industry by trading seasonal collections for constant, high-speed production. Zara’s parent company pioneered this approach in the 1990s, launching new items every couple of weeks instead of by traditional seasonal cycles. Brands like H&M and Forever 21 soon adopted this model, and the trend accelerated in the late 2010s with the rise of “ultra-fast” fashion brands like Asos, Boohoo, and Fashion Nova. 

Enter Shein, which has taken “ultra-fast” to unprecedented levels. Many have called it Fast Fashion 2.0 and experts question if brands like Zara can even compete. 

Shein’s Meteoric Success

Today, Shein is a global powerhouse, shipping to 220 countries, with the U.S. as its largest market. In June 2024, it even overtook Amazon to become the top shopping app on iOS in the U.S. and holds this position in over 50 countries. Investors project Shein’s growth will continue at a staggering rate, with the company valued at $100 billion and expected to bring in $32.5 billion in revenue by the end of 2023.

Unlike competitors such as Fashion Nova and Missguided, which release about 1,000 new styles each week, Shein can release even more while producing items in smaller quantities. By working with smaller workshops that receive orders in real time, Shein can rapidly test new designs and scale successful ones while keeping unpopular items off shelves. This system resembles the gig economy, with orders sent directly to factory managers' phones in an “Uber-like” model. Unlike many other brands, Shein remains fully online, with no brick-and-mortar stores.

The Mysterious Founder Behind Shein

Despite Shein’s high profile, its founder, Chris Xu (also known as Sky Xu), maintains an enigmatic presence. Born in Shandong, China, Xu worked in SEO and digital marketing before launching Shein in 2008. Though some reports indicate he attended George Washington University, most evidence suggests he graduated from Qingdao University of Science and Technology. Rarely photographed, Xu’s online presence is so scarce that even company employees reportedly would not recognize him. This elusiveness has fostered significant mystery, adding to the intrigue around Shein’s leadership. Most of his employees wouldn’t even recognize him. Why the ultra mystery? 

Shein’s Unique Business Model

Shein’s business model leverages a direct-to-consumer approach with outsourced production. The company works with around 5,400 third-party manufacturers, most of whom are located in China. This is a STAGGERING number compared to other common brands — Good American has a single source; Levi’s works with 650 manufacturers; Patagonia getting it down to around 100. 

SHEIN

To control costs, Shein uses on-demand production, rapidly increasing production of popular items and ceasing production on slow sellers. This approach minimizes inventory waste and keeps costs down, but also raises concerns about the working conditions of the small suppliers Shein relies on.

SHEIN

One notable practice is Shein’s use of a U.S. tariff exemption called the "de minimis" provision, which exempts packages valued under $800 from import taxes. By shipping small, individually addressed packages directly to the consumer instead of to a warehouse, Shein capitalizes on this exemption, bypassing major warehouses and avoiding inspection under the Uyghur Forced Labor Prevention Act (UFLPA), a loophole that has sparked controversy. This typically lengthens shipping time significantly but consumers are willing to look past it for the ridiculously cheap apparel. 

SHEIN worker

The Data-Driven Machine Behind Shein’s Designs

Shein’s ability to analyze and respond to trends is a critical advantage. Using an in-house algorithm, the company mines data from its own customer base and social media to track trending styles. The design team uses this information to create new products quickly, with an impressive pace of 500 new items added daily. If a style proves popular, Shein increases its orders; if it doesn’t, they quickly phase it out. This quick turnover is a primary driver of Shein’s success, as well as a reason for its reputation as a bargain retailer with constantly refreshed inventory.

Shein also encourages engagement on its app, rewarding users for actions such as checking in daily, watching live streams, and participating in outfit contests. This approach has helped build a loyal customer base, especially among young consumers. In a 2022 survey, Shein was the second favorite e-commerce site for American teenagers.

The Future of Fast Fashion

Shein’s success stems from its ability to blend data-driven production with consumer engagement and ultra-fast fashion cycles. But the company’s rapid growth and dominance in the fast fashion world raise questions about the long-term sustainability of its practices, especially given the environmental and ethical concerns inherent in its model.

As Shein moves forward, its strategy will likely continue to evolve in response to regulatory pressures, consumer demands for transparency, and ongoing scrutiny of its labor practices. Whether this “fast fashion 2.0” giant can continue to scale while addressing these issues remains to be seen, but one thing is certain: Shein has reshaped the fashion industry in profound and lasting ways.