The super-fast fashion site Shein has taken over the portfolio of young buyers. But at what cost ?
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If you haven’t met Shein yet, it’s probably because you weren’t supposed to.
The Chinese fashion site has grown exponentially in recent years with a hyper-targeted social media strategy that has captured the attention – and the wallets – of Gen Z and Millennial shoppers.
For younger consumers who want to be fashionable and often have less disposable income, Shein feels almost irresistible.
“I don’t think there are many players in the world targeting younger consumers like Shein does,” said Charles de Brabant, chief executive of the Bensadoun School of Retail Management. McGill University in Montreal.
Toronto resident Jai Elanko says she shops at Shein when looking for an affordable basic or a unique outfit for an occasion.
“I’m like, ‘Okay, I’ll wear it once or twice or a few times, but I don’t care too much about the quality itself,'” Elanko said.
And while the material isn’t up to par with other brands, the 27-year-old says the price makes up for it.
Shein is now said to be valued at $100 billion, surpassing big industry players like Zara and H&M, as it emerges as a leader in e-commerce. However, the company has been criticized for its sustainability concerns, particularly due to the frenetic pace of production.
While Zara offers some 600 products labeled “new” on its site, Shein offers more than 6,000 new products daily at prices significantly lower than those of its competitors.
A CBC Marketplace investigation last fall also found that Shein was one of several online retailers selling products containing high levels of toxic chemicals, which were later removed from its site.
Despite the attention paid over the years to unsustainable fashion industry practices – and a young population that claims to care about the environment – the site’s rise is proof that fast fashion is getting even faster. .
A native online player
Shein was founded in 2012 by current CEO Chris Xu as a business-to-consumer retailer that sources products from domestic manufacturers and sells them around the world.
According to their US site, their “agile, digital supply chain” allows them to arrange small-batch orders from manufacturers that can be delivered quickly to consumers, to see what’s hot.
Shein’s ability to run small production batches and test them with customers exceeds the capabilities of other retailers, says Montreal-based McKinsey senior partner Sandrine Devillard.
“Because you have all the advanced analytics, you’re able to read the customer and identify it’s going to be a smash hit or it’s going to be a flop, and then you can restock in less than three weeks,” said Devillard said.
“You’re on the amazing winning formula, and that’s what they do.”
Unlike other retailers that have had to adapt to the rise of e-commerce, de Brabant says Shein’s operations have been designed with a digital approach.
“The huge benefits there are, you can sell pretty much anywhere, or that’s what Shein has done incredibly effectively,” de Brabant said.
And while there are downsides to the lack of physical stores, Shein eliminates some of the hesitation associated with shopping online by offering customers free returns and free shipping on orders over C$49.
But what emerges from experts who have followed Shein’s rise are his site algorithms that serve virtual shoppers exactly what they want to see. According to McKinsey, Shein uses “behavioral economics and game principles” that allow customers to spend an average of 8.5 minutes on the website, longer than any other US fashion site.
WATCH | Brazilian musician Anitta collaborates with Shein on the collection:
Shein has also excelled in its ability to direct customers to its site. The retailer has cultivated a strong social media presence through influencers who promote their products primarily on Instagram and TikTok, reaching the next generation of consumers.
“We think that’s the main driver of their growth,” Devillard said. “They are able to use their influence to reduce investment.”
Shein partners with all levels of influencers, from celebrities like Brazilian singer Anitta to micro-influencers with thousands of followers. Some have even replicated the same outfits using products from Shein and mainstream competitors to contrast price and products.
“All reinforce [Shein’s] credibility in fashion,” Devillard said.
Affordable, trendy and unsustainable
Shein’s success with young consumers is at odds with their expressed values of the environment and sustainability.
The apparel and textile industry is responsible for 2-8% of global greenhouse gas emissions, according to the UN Alliance for Sustainable Fashion. This is in addition to the heavy use of water by industry for production and the environmental impact of products that end up in landfills.
According to an Ipsos poll last fall, young Canadians ranked threats to the environment and climate change among the top five concerns. A sample of 501 Canadians between the ages of 18 and 29 was surveyed from September 3 to September 6, 2021. For comparison purposes only, a probability sample of the same size would yield a margin of error of +/- 5 percentage points, 19 times out of 20.
Shelley Haines, a lecturer at Metropolitan University of Toronto’s School of Fashion, posted a study last year on the gap between consumer attitudes towards sustainability and their actions.
“I found it [the participants’] wardrobe did not express the same level of enduring interest that they expressed in terms of interest and values,” Haines said.
Some of the barriers to sustainable behavior the researcher found were related to price, style, and lack of knowledge about how to care for and repair clothes.
“One participant told me that she bought the same skirt twice in a very short time, just because the zipper on the first skirt she broke,” Haines said.
Elanko says price is really what drives young people to embrace fast fashion, despite knowing its impact on the environment. Those with less financial means shouldn’t have to choose between style and durability, she added.
“I really think it’s because they really can’t afford anything else,” Elanko said.
Consumers today have more options to shop consciously with independent sustainable brands offering fast fashion alternatives. However, their prices are often much higher than those of major retailers for a variety of reasons, including the cost of materials and the scale of production.
Haines says sustainable fashion is more accessible to the privileged. For shoppers looking to balance their finances with their values, Haines recommends allocating some of your fashion budget to buying fewer but more durable items, wearing fast fashion items longer, or exploring second-hand stores.
The future of fashion sustainability
Big brands have invested more in sustainable products and practices in recent years. Zara describes on her website its timeline for a list of environmental goals, including reducing the water impact of their supply chain by 25% by 2025. And recently, H&M announced that its baby range is fully compostable .
Shein also dedicated a page on its website where they list some ways its operations are incorporating sustainability, including using solar-powered vehicles to transport products and testing small batches before mass-producing an item.
Shein’s success is likely to attract the attention of competitors and raise concerns about the future of the industry. Devillard predicts Shein will continue to grow and its success will inspire other retailers to “up their game.”
But de Brabant is lukewarm about whether their growth can be sustained, especially given the extremely thin margins.
“I’m always a little wary of exponential growth rates like that,” he said.
For traditional players in the industry, de Brabant does not recommend trying to compete with Shein on price and instead says they should focus on their business models that bring steady but good growth.
Shein’s success might feel like he’s found a way to avoid any consequences for his role in accelerating fast fashion. However, de Brabant and Devillard believe the company will eventually face environmental, social and governance issues with consumers.
“TO [some] point, behavior is going to follow mindset,” Devillard said.