Shein defends his business model. According to the Chinese fast fashion giant, the low prices are based on demand-oriented production and not on forced or cheap labour, the company said in an interview with the French news agency AFP.
Founded in China in 2008, the company has quickly secured a top spot in the global fast fashion market by offering young, social media-savvy customers affordable collections that hit the market at a steady pace.
At the launch of a Shein pop-up in Paris, Peter Pernot-Day, the Singapore-based company’s chief strategy officer, told AFP that Shein is “an on-demand maker…the global pioneer of this technology.” By testing short-run products and ramping up production when there’s demand, Pernot-Day says Shein has eliminated “stock risk,” eliminating “the biggest cost factor in apparel.”
According to Bloomberg, Shein’s sales rose by 60 percent to 16 billion US dollars (14.49 billion euros) worldwide in 2021 – just behind the Swedish fashion chain H&M.
With more than 11,000 employees worldwide, Shein has big plans for further expansion. “It’s important to have teams in the countries, regions and locales where we operate,” Pernot-Day said. The “localization” strategy includes the construction of a 40,000 square meter new warehouse in Poland that will enable faster delivery of the European market. “More will follow,” he added.
The company also plans to set up a digital marketplace where customers can also buy products from other brands. The fashion and lifestyle shopping experience will be similar to a “digital department store”, based on the posh department stores in Paris.
“Still Learning”
But the relentless expansion of sales and production is exactly what NGOs and some governments are blaming Shein for, saying its low cost is incompatible with fair treatment of workers or the environment.
Pernot-Day emphasized that eliminating the risk of unsold inventory and warehousing is what allows Shein to offer extremely low prices, such as t-shirts for as little as €4.99. “We’re able to accurately gauge demand and only produce as many garments as we need,” he said. Shein’s efforts to improve her image include a second-hand clothing store in the United States, materials research and the integration of recycled materials into the products.
While Pernot-Day acknowledged that there are “justifiable criticisms” that the company’s product pages provide consumers with little detail about recycled content and other traceability factors, “we try to understand the way we describe and categorize our products, improve them”.
He stressed that Shein is “digitally very well connected to suppliers’ information about sourcing.”
The company has conducted up to 300,000 chemical tests this year alone, Pernot-Day said, adding that it works with Oritain, a product analysis firm that also works for the US government.
“We’re still learning,” he added. “The challenge is that we have many suppliers and many products.”
“Decrease in Complaints”
U.S. lawmakers recently called on the SEC to conduct an independent investigation into allegations of Uyghur forced labor at several brands, including Shein.
However, the company is working with a US government “blacklist” on forced labor “to review our supply chain and understand whether or not the companies are represented there,” Pernot-Day said.
And if claims are made that counterfeit goods are being sold at Shein, “then we withdraw them from sale, if not then not,” he added, although “that’s a tough legal issue.”
“We’ve seen a decrease in the number of complaints against us,” Pernot-Day said. (AFP)
This translated post previously appeared on FashionUnited.com