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Last fall, with life at a standstill during the pandemic, I became obsessed with videos of influencers standing in their bedrooms trying on clothes from a company called Shein.
In TikToks with the hashtag #sheinhaul, a young woman would lift a large plastic bag and tear it open, releasing a succession of smaller plastic bags, each containing a neatly folded piece of clothing.The camera then cuts to a woman wearing one piece at a time, quick-fire, interspersed with screenshots from the Shein app showing prices: $8 dress, $12 swimsuit.
Down this rabbit hole are the themes: #sheinkids, #sheincats, #sheincosplay.These videos invite viewers to marvel at the surreal collision of low cost and abundance.Comments that align with emotions are supportive on performance (“BOD GOALS”).At some point, one will question the morality of such cheap clothes, but there will be a flurry of voices defending Shein and the influencer with equal enthusiasm (“Too cute.” “It’s her money, leave her alone.” ), the original commenter will remain silent.
What makes this more than just random internet mystery is that Shein has quietly become a huge business.”Shein came out very fast,” said Lu Sheng, a professor at the University of Delaware who studies the global textile and apparel industry.“Two years ago, three years ago, nobody had heard of them.” Earlier this year, investment firm Piper Sandler surveyed 7,000 American teens on their favorite e-commerce sites and found that while Amazon was the clear winner, Shein came in second.The company has the largest share of the U.S. fast-fashion market — 28 percent.
Shein reportedly raised between $1 billion and $2 billion in private funding in April.The company is valued at $100 billion — more than fast-fashion giants H&M and Zara combined, and more than any private company in the world except SpaceX and TikTok owner ByteDance.
Considering that the fast fashion industry is one of the most dangerous in the world, I was flabbergasted that Shein managed to attract this kind of capital.Its reliance on synthetic textiles destroys the environment, and by encouraging people to keep updating their wardrobes, it creates enormous waste; the amount of textiles in U.S. landfills has nearly doubled over the past two decades.Meanwhile, workers who sew clothes are paid very little for their work in exhausting and sometimes dangerous conditions.In recent years, many of the biggest fashion houses have felt the pressure to make small moves in reform.Now, though, a new generation of “super-fast fashion” companies has emerged, and many have done little to adopt better practices.Of these, Shein is by far the largest.
One night in November, when my husband put our 6-year-old to bed, I sat on the couch in the living room and opened the Shein app.”It’s big,” said the banner of the Black Friday sale on the screen, flashing for emphasis.I clicked the icon for a dress, sorted all the items by price, and selected the cheapest item out of curiosity about quality.This is a tight-fitting long-sleeve red dress ($2.50) made of sheer mesh.In the sweatshirt section, I added a cute colorblock jumper ($4.50) to my cart.
Of course, every time I choose an item, the app shows me similar styles: Mesh body-con begets mesh body-con; colorblock comfort clothes are born from colorblock comfort clothes.I roll and roll.When the room was dark, I couldn’t get up and turn on the lights.There is a vague shame in this situation.My husband came up from the living room after our son fell asleep and asked me what I was doing with a slightly concerned tone.”No!” I cried.He turned on the light.I picked a cotton puff-sleeve tee ($12.99) from the site’s premium collection.After the Black Friday discount, the total price of the 14 items is $80.16.
I’ve been tempted to keep buying, partly because the app encourages it, but mostly because there’s so much to choose from, and they’re all cheap.When I was in high school, the first generation of fast-fashion companies trained shoppers to expect an acceptable and cute top for less than a night’s delivery fee.Now, more than 20 years later, Shein is undercutting the price of deli sandwiches.
Here’s some known information about Shein: It’s a China-born company with nearly 10,000 employees and offices in China, Singapore, and the United States.Most of its suppliers are located in Guangzhou, a port city on the Pearl River about 80 miles northwest of Hong Kong.
Beyond that, the company shares surprisingly little information with the public.As privately held, it does not disclose financial information.Its CEO and founder, Chris Xu, declined to be interviewed for this article.
When I started researching Shein, it seemed like the brand existed in a borderline space occupied by teens and twenties and no one else.On an earnings call last year, a financial analyst asked executives at fashion brand Revolve about competition from Shein.Co-CEO Mike Karanikolas responded, “You’re talking about a Chinese company, right? I don’t know how to pronounce it—shein.” (She came in.) He dismissed the threat .A federal trade regulator told me he had never heard of the brand, and then, that night, he sent an email: “Postscript – my 13-year-old daughter not only knows about the company (Shein), but also Still wearing their corduroy tonight.” It occurred to me that if I wanted to know about Shein, I should start with whoever seemed to know it best: its teen influencers.
One fine afternoon last December, a 16-year-old girl named Makeenna Kelly greeted me on the doorstep of her home in a quiet suburb of Fort Collins, Colorado.Kelly is a redhead with a glamorous Cabbage Patch Kid vibe, and she’s known for ASMR stuff: clicking boxes, tracing text in the snow outside her house.On Instagram, she has 340,000 followers; on YouTube, she has 1.6 million.A few years ago, she started filming for a Shein-owned brand called Romwe.She posts new ones about once a month.In a video I first watched last fall, she was walking around her backyard in front of a tree with golden leaves, wearing a $9 cropped diamond check sweater.The camera is aimed at her belly, and in the voiceover, her tongue makes a juicy sound.It’s been viewed over 40,000 times; the Argyle sweater is sold out.
I came to see Kelly filming.She danced into the living room—warming up—and took me upstairs to the carpeted second-floor landing where she filmed.There’s a Christmas tree, a cat tower, and in the middle of the platform, an iPad mounted on a tripod with ring lights.On the floor lay a pile of shirts, skirts and dresses from Romwe.
Kelly’s mother, Nichole Lacy, scooped up her clothes and went to the bathroom to steam them.”Hello Alexa, play Christmas music,” Kelly said.She went into the bathroom with her mother, and then, for the next half hour, dressed in one new dress after another—heart cardigan, star-print skirt—and silently modeled in front of the iPad camera, doing Kiss the face, kick a leg up, stroke the hem here or tie a tie there.At one point, the family’s sphinx, Gwen, strolls through the frame and they hug each other.Later, another cat, Agatha, appeared.
Over the years, Shein’s public profile has been in the form of people like Kelly, who formed a coalition of influencers to shoot blockbuster movies for the company.According to Nick Baklanov, a marketing and research expert at HypeAuditor, Shein is unusual in the industry because it sends free clothing to a large number of influencers.They in turn share discount codes with their followers and earn commissions from sales.This strategy has made it the most followed brand on Instagram, YouTube and TikTok, according to HypeAuditor.
In addition to free clothes, Romwe also pays a flat fee for her posts.She would not disclose her fees, though she said she made more money in a few hours of video work than some of her friends with regular after-school jobs would make in a week.In exchange, the brand gets relatively low-cost marketing where its target audience (teens and twentysomethings) likes to hang out.While Shein works with major celebrities and influencers (Katy Perry, Lil Nas X, Addison Rae), its sweet spot seems to be those with a medium-sized following.
In the 1990s, before Kelly was born, Zara popularized a model of borrowing design ideas from the things that caught the attention of the runway.By producing apparel close to its Spanish headquarters and streamlining its supply chain, it offers these proven styles at shockingly low prices in a matter of weeks.Andreessen Horowitz investor Connie Chan invested in Shein’s rival Cider.Put on.”They don’t care if Vogue thinks it’s not a cool piece,” she said.UK-based company Boohoo and US-based Fashion Nova are part of the same trend.
After Kelly was done shooting, Lacey asked me how much I thought all the pieces on Romway’s website — 21 of them, plus a decorative snow globe — cost.They look better than what I bought when I purposely clicked on the cheapest item, so I’m guessing at least $500.Lacey, my age, smiled.”That’s $170,” she said, her eyes widening as if she couldn’t believe it herself.
Every day, Shein updates its website with an average of 6,000 new styles — an outrageous number even in the context of fast fashion.
By the mid-2000s, fast fashion was the dominant paradigm in retail.China has joined the World Trade Organization and has quickly become a major clothing production center, with Western companies moving most of their manufacturing there.Around 2008, Shein’s CEO’s name first appeared in Chinese business documents as Xu Yangtian.He is listed as the co-owner of a newly registered company, Nanjing Dianwei Information Technology Co., Ltd., along with two others, Wang Xiaohu and Li Peng.Xu and Wang each own 45 percent of the company, while Li owns the remaining 10 percent, the documents show.
Wang and Li shared their memories of the time.Wang said that he and Xu were acquainted by work colleagues, and in 2008, they decided to do marketing and cross-border e-commerce business together.Wang oversees some aspects of business development and finance, he said, while Xu oversees a range of more technical matters, including SEO marketing.
That same year, Li gave a speech on internet marketing at a forum in Nanjing.Xu — a lanky young man with a long face — introduced himself that he was seeking business advice.”He’s a novice,” Lee said.But Xu seemed tenacious and diligent, so Li agreed to help.
Xu invited Li to join him and Wang as part-time advisers.The three of them rented a small office in a humble, low-rise building with a large desk and a few desks — no more than a dozen people inside — and their company was launched in Nanjing in October.At first, they tried selling all kinds of things, including teapots and cell phones.The company later added clothing, Wang and Li said.If foreign companies can hire Chinese suppliers to make clothing for foreign clients, then of course Chinese-run companies can do it more successfully.(A spokesperson for Shein disputed that claim, saying Nanjing Dianwei Information Technology “is not involved in the sale of apparel products.”)
According to Li, they started sending buyers to a wholesale clothing market in Guangzhou to buy individual clothing samples from various suppliers.They then list these products online, using a variety of different domain names, and publish basic English-language posts on blogging platforms like WordPress and Tumblr to improve SEO; only when an item goes on sale do they report to a given item Wholesalers place small batch orders.
As sales rose, they began researching online trends to predict which new styles might catch on and place orders ahead of time, Li said.They also used a website called Lookbook.nu to find little influencers in the US and Europe and started sending them free clothing.
During this time, Xu worked long hours, often staying in the office long after others returned home.”He had a strong desire to succeed,” Lee said.”It’s 10pm and he’ll nag me, buy me late-night street food, ask more. Then it might end at 1 or 2am.” Lee on beer and meals (salted duck boiled, vermicelli soup ) gave Xu advice because Xu listened carefully and learned quickly.Xu didn’t talk much about his personal life, but he told Li that he grew up in Shandong province and was still struggling.
In the early days, Li recalls, the average order they received was small, about $14, but they sold 100 to 200 items a day; on a good day, they could be over 1,000.Clothes are cheap, that’s the point.”We’re after low margins and high volumes,” Lee told me.Furthermore, he added, the low price has lowered expectations for quality.The company grew to about 20 employees, all of whom were well paid.Fat Xu has grown fat and expanded his wardrobe.
One day, after they had been in business for more than a year, Wang appeared in the office and found that Xu was missing.He noticed that some of the company’s passwords had been changed, and he became concerned.As Wang described, he called and texted Xu but got no response, then went to his house and the train station to look for Xu.Xu left.To make matters worse, he took control of the PayPal account the company used to receive international payments.Wang notified Li, who eventually paid the rest of the company and fired the employee.Later, they learned that Xu had defected and continued in e-commerce without them.(The spokesperson wrote that Xu was “not in charge of the company’s financial accounts” and that Xu and Wang were “peacefully separated.”)
In March 2011, the website that would become Shein—SheInside.com—was registered.The site calls itself “the world’s leading wedding dress company,” even though it sells a range of women’s clothing.By the end of that year, it described itself as a “super international retailer”, bringing “the latest street fashion from London, Paris, Tokyo, Shanghai and New York high streets quickly to stores”.
In September 2012, Xu registered a company with a slightly different name from the company he co-founded with Wang and Li – Nanjing E-Commerce Information Technology. He held 70% of the company’s shares and a partner held 30% of the shares.Neither Wang nor Li have ever been in touch with Xu again – for the best in Li’s opinion.”When you’re dealing with a morally corrupt person, you don’t know when he’s going to hurt you, right?” Lee said.”If I can get away from him sooner, at least he can’t hurt me later.”
In 2013, Xu’s company raised its first round of venture capital funding, reportedly $5 million from Jafco Asia, according to CB Insights.In a press release at the time, the company, which calls itself SheInside, described itself as “launched as a website in 2008″ — the same year Nanjing Dianwei Information Technology Co., Ltd. was established.(Many years later, it will start using the 2012 founding year.)
In 2015, the company received another $47 million in investment.It changed its name to Shein and moved its headquarters from Nanjing to Guangzhou to be closer to its supplier base.It quietly opened its U.S. headquarters in an industrial area in Los Angeles County.It also acquired Romwe – a brand that Lee, as it happens, started with a girlfriend a few years ago, but left before it was acquired.Coresight Research estimates that in 2019, Shein brought in $4 billion in sales.
In 2020, the pandemic devastated the apparel industry.Still, Shein’s sales continue to grow and are expected to hit $10 billion in 2020 and $15.7 billion in 2021.(It’s unclear if the company is profitable.) If some god decided to invent a clothing brand fit for a pandemic era, where all public life is shrunk into the rectangular space of a computer or phone screen, it might look a lot like Shein .
I’ve been covering Shein for months when the company agreed to let me interview several of its executives, including US President George Chiao; Chief Marketing Officer Molly Miao; and Environmental, Social and Governance Director Adam Winston.They described to me a completely different model from how traditional retailers operate.A typical fashion brand might design hundreds of styles in-house each month and ask its makers to make thousands of each style.The pieces are available online and in physical stores.
By contrast, Shein works mostly with external designers.Most of its independent suppliers design and manufacture clothing.If Shein likes a certain design, it will place a small order, 100 to 200 pieces, and the clothes will get the Shein label.It takes only two weeks from concept to production.
Finished garments are sent to Shein’s large distribution center, where they are sorted into packages for customers, and those packages are shipped directly to people’s doorsteps in the U.S. and more than 150 other countries—rather than sending large quantities of garments everywhere in the first place. The world on the container, as retailers have traditionally done.Many of the company’s decisions are made with the help of its custom software, which can quickly identify which pieces are popular and automatically reorder them; it stops production of styles that sell disappointingly.
Shein’s purely online model means that, unlike its biggest fast-fashion rivals, it can avoid the operational and staffing costs of brick-and-mortar stores, including dealing with shelves full of unsold garments at the end of each season.With the help of software, it relies on suppliers to design to make work faster and more efficient.The result is an endless stream of clothes.Every day, Shein updates its website with an average of 6,000 new styles — an outrageous number even in the context of fast fashion.In the last 12 months, Gap listed about 12,000 different items on its website, H&M about 25,000 and Zara about 35,000, University of Delaware professor Lu found.At that time, Shein had 1.3 million.”We have something for everyone at a very affordable price,” Joe told me.”Whatever customers need, they can find it on Shein.”
Shein isn’t the only company that places small initial orders with suppliers and then reorders when products perform well.Boohoo helped pioneer this model.But Shein has an edge over its Western rivals.While many brands, including Boohoo, use suppliers in China, Shein’s own geographic and cultural proximity makes it more flexible.”It’s very difficult to build such a company, it’s almost impossible for a team not in China to do it,” says Chan from Andreessen Horowitz.
Credit Suisse analyst Simon Irwin has been puzzling over Shein’s low prices.“I profiled some of the most efficient sourcing companies in the world that buy at scale, have 20 years of experience, and have very efficient logistics systems,” Owen told me.”Most of them admitted that they couldn’t bring the product to market at the same price as Shein.”
Still, Irving doubts that Shein’s prices are staying low at all, or even mostly through efficient purchasing.Instead, he points to how Shein has used the international trading system ingeniously.Shipping a small package from China to the U.S. typically costs less than shipping from other countries or even within the U.S., under an international agreement.In addition, since 2018, China has not imposed taxes on exports from Chinese direct-to-consumer companies, and U.S. import duties do not apply to goods valued at less than $800.Other countries have similar regulations that allow Shein to avoid import duties, Owen said.(A spokesperson for Shein said it “complies with the tax laws of the regions in which it operates and is subject to the same tax regulations as its industry counterparts.”)
Irving also made another point: He said many retailers in the U.S. and Europe are increasing spending to comply with regulations and norms on labor and environmental policies.Shein appears to be doing far less, he added.
On a cool week in February, just after Chinese New Year, I invited a colleague to visit Guangzhou’s Panyu District, where Shein does business.Shein declined my request to speak to the supplier, so my colleagues came to see their working conditions for themselves.A modern white building with Shein’s name on it stands along a wall in a quiet residential village, between schools and apartments.At lunchtime, the restaurant is packed with workers wearing Shein badges.Bulletin boards and telephone poles around the building are densely populated with job advertisements for garment factories.
In a nearby neighborhood—a dense collection of small informal factories, some in what appears to be a remodeled residential building—bags bearing Shein’s name can be seen stacked on shelves or lined up on tables.Some facilities are clean and tidy.Among them, women wear sweatshirts and surgical masks and work quietly in front of sewing machines.On one wall, Shein’s Supplier Code of Conduct is prominently posted.(“Employees must be at least 16 years old.” “Pay wages on time.” “No harassment or abuse of employees.”) In another building, however, bags full of clothes are piled on the floor and anyone trying will need to Complicated footwork passes and gets through.
Last year, researchers who visited Panyu on behalf of the Swiss watchdog group Public Eye also found that some buildings had corridors and exits blocked by large bags of clothing, an apparent fire hazard.Three workers interviewed by the researchers said they typically arrive at 8 a.m. and leave around 10 or 10:30 p.m., with a roughly 90-minute break for lunch and dinner.They work seven days a week, with one day off a month — a schedule prohibited by Chinese law.Winston, director of environmental, social and governance, told me that after learning of the Public Eye report, Shein “investigated it herself.”
The company recently received a zero out of 150 on a scale maintained by Remake, a nonprofit that advocates for better labor and environmental practices.The score partly reflects Shein’s environmental record: The company sells a lot of disposable clothing, but discloses so little about its production that it can’t even begin to measure its environmental footprint.”We still don’t really know their supply chain. We don’t know how many products they make, we don’t know how many materials they use in total, and we don’t know their carbon footprint,” Elizabeth L. Cline, director of advocacy and policy at Remake tell me.(Shein did not answer questions about the remake report.)
Earlier this year, Shein released its own sustainability and social impact report, in which it pledged to use more sustainable textiles and disclose its greenhouse gas emissions.However, the company’s audits of its suppliers found major security issues: Of the nearly 700 suppliers audited, 83 percent had “significant risks.”Most violations involved “fire and emergency preparedness” and “working hours,” but some were more serious: 12% of suppliers committed “zero tolerance violations,” which could include underage labor, forced labor, or serious health problems and safety issues. I asked the speaker what these violations were, but she didn’t elaborate.
Shein’s report said the company will provide training to suppliers with serious violations.If the supplier fails to resolve the issue within the agreed time frame – and in severe cases immediately – Shein may stop working with them.Whinston told me, “There’s more work to be done—just like any business needs to improve and grow over time.”
Labor rights advocates say focusing on suppliers may be a superficial response that fails to address why dangerous conditions exist in the first place.They argue that fast-fashion companies are ultimately responsible for pushing manufacturers to make products faster at lower prices, a demand that makes poor labor conditions and environmental damage all but inevitable.This isn’t unique to Shein, but Shein’s success makes it particularly compelling.
Klein told me that when a company like Shein touts how efficient it is, her thoughts jump to people, usually women, who are exhausted physically and mentally so the company can maximize revenue and maximize revenue. Minimize costs.“They have to be flexible and work overnight so the rest of us can push a button and have a dress delivered to our door for $10,” she said.