Thanks to a new fundraising round, fashion giant Shein has now reached a valuation of $100 billion, making it the third most valuable startup in the world. Far ahead of its competitors HM and Inditex, parent company of Zara. After fast fashion and ultra fast fashion, Shein has just created a new segment: Real-time fashion, based on hyper-reactivity and low prices. A concept developed at the expense of the planet and workers.
If you have Instagram, Tik Tok, or even Facebook, you can’t escape Shein’s ads. Mainly targeting young women, this Chinese ready-to-wear start-up is a hit all over the world. In just a few years she won a wide audience with her dresses for 8.99 euros, her T-shirts for 4.99 euros or her jeans for 9.49 euros. According to the Wall Street Journal, this heavyweight has just raised between $1 and $2 billion. A major operation that valued the company at $100 billion, more than H&M and Inditex, Zara’s parent company, combined.
As a sign of this meteoric rise, Shein has overtaken Amazon and is now the number one most downloaded applications in the United States. The start-up is also winning the consumer in France. According to Kantar Worldpanel, Shein is now the sixth largest fashion e-tailer. With a model based on low prices and hyper-responsiveness, Shein has gone even further than the pioneers of fast fashion. For Matthew Brennan, a tech specialist who researched the start-up, the latter even created a new segment of the textile industry. While Zara launched the fast fashion model, Asos and BooHoo developed ultra fast fashion, but Shein is defined as the creator of real-time fashion.
“Shein’s pioneered real-time retail model reduces the time between design and production from three weeks to just three days”, says the specialist. By collecting and analyzing real-time customer data and social media trends, Shein creates new models in moments. Instead of producing them in large quantities, he orders a hundred.
“If an item performs well, more batches will be ordered; otherwise lines will be shut down immediately. Shein ships to 250 countries – a sobering thought when you consider the issues of not only deliveries but returns as well. Most returns end up on landfill because it costs more to put them back into circulation.”writes the director of the Center for Sustainable Fashion at the London College of Fashion Dilys Williams in a column to The Guardian. “It’s a lot like an Uber system, where new orders come on factory owners’ phones and they receive the order. It’s very messy, but effectiveMathew Brennan explains to Vox.
Things are less rosy behind this very well-oiled machine. Several investigations have revealed disastrous working conditions in the Chinese garment factories from which the new fashionable Tops will come. Last November, the NGO Public Eye wanted to know the real price of this ultra-fast fashion: workplaces without emergency exits, broken windows, safety conditions with fatal consequences in case of fire, which unfortunately reflect the collapse of Rana Plaza in 2013, this Bangladeshi textile factory that caused the death of thousands of textile workers.
“The workers, who come from the poorest provinces in the country, work 11 to 12 hours a day, with only one day off a month – more than 75 hours a week. Such schedules not only violate Shein’s code of conduct, but also against Chinese law”, writes the NGO. Difficult conditions also observed by a journalist from Le Monde who was investigating the company. He describes “even faster cadence” than those imposed by the giants of the sector. The group refutes such accusations and goes through employment agencies “avoid responsibility” and escape the “social contributions”† It remains to be seen whether this steamroller will not meet new consumer requirements. Indeed, Zara or H&M have been the target of boycotts after being jailed for forced labor cases of the Uyghur community particularly in their supply chain.