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If you haven't come across Shein by now, it's probably because you were never meant to.
The Chinese fashion site has grown exponentially in recent years with a hyper-targeted social media strategy that's captured the attention — and wallets — of gen-Z and millennial shoppers.
For younger consumers with a desire to be fashionable and often less disposable income, Shein feels almost irresistible.
"I don't think there are many players in the world that target younger consumers like Shein does," said Charles de Brabant, the executive director of the Bensadoun School of Retail Management at McGill University in Montreal.
Toronto resident Jai Elanko says she shops at Shein when she's looking for an affordable basic or a one-time wear for an occasion.
"I'm like, 'okay, I'm going to wear it one or two times or a few times, but I don't really care too much about the quality itself,'" said Elanko.
And although the material isn't on-par with other brands, the 27-year-old says the price makes up for it.
Shein is now said to be valued at a whopping $100 billion, overtaking large players in the industry like Zara and H&M as it proves itself to be a leader in e-commerce. However, the company has faced criticism over sustainability concerns from, among other practices, the staggering pace of production.
While Zara has some 600 products labelled "new" on their site, Shein pumps out upwards of 6,000 new products in a day at significantly lower price points than its competitors.
A CBC Marketplace investigation last fall also found Shein was one of several online retailers selling products with elevated levels of toxic chemicals, which were then removed from its site.
Despite much attention over the years to the unsustainable practices of the fashion industry — and a youth demographic who claims to care about the environment — the site's rise is evidence 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 acquires products from manufacturers domestically and sells them globally.
According to their U.S. site, their "digitally empowered agile supply chain" enables them to arrange small-batch orders from manufacturers that can be delivered quickly to consumers, to see what's hot.
Shein's ability to execute small production batches and test them out 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 that this is going to be a smashing hit or this is going to be a flop, and then you're able to replenish in less than three weeks," said Devillard.
"You are on the amazing winning formula, and that's what they're doing."
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-first approach.
"The huge advantages there are you could pretty much sell anywhere, or which is what Shein has done incredibly effectively," said de Brabant.
And while the absence of physical stores does come with disadvantages, Shein eliminates some of the hesitancy associated with online shopping by offering customers free returns and free shipping on orders over $49 Cdn.
But what stands out to experts who have been watching Shein's rise is its site algorithms that serve virtual window shoppers exactly what they want to see. According to McKinsey, Shein uses "behavioural economics and gaming principles" that gets customers to spend an average of 8.5 minutes on the website, longer than every other U.S. fashion site.
WATCH | Brazillian musician Anitta collaborates with Shein on collection:
Shein has also excelled at its ability to direct customers onto its site. The retailer has cultivated a strong social media presence through influencers that promote their products predominantly on Instagram and TikTok, reaching the next generation of consumers.
"We believe that this is the primary driver of their growth," said Devillard. "They are able to use their clout to reduce investment."
Shein partners with all levels of influencers, from celebrities like Brazilian singer Anitta to micro-influencers with follower counts in the thousands. Some have even replicated the same outfits using products from Shein and traditional competitors to contrast the price and products.
"All of them reinforce [Shein's] credibility in fashion," said Devillard.
Affordable, trendy and unsustainable
Shein's success with young consumers is at odds with their expressed values about the environment and sustainability.
The clothing and textile industry is responsible for two to eight per cent of global greenhouse gas emissions, according to the United Nations Alliance for Sustainable Fashion. That's in addition to the industry's significant use of water for production and the environmental impact of products ending up in landfills.
According to an Ipsos poll from last fall, young Canadians listed threats against the environment and climate change as a top-five concern. A sample of 501 Canadians aged 18 to 29 were surveyed from September 3 to 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 Toronto Metropolitan University's fashion school, published a study last year on the discrepancy between consumers' attitudes toward sustainability and their actions.
"I found that [the participants'] wardrobe did not express the same level of sustainable interest that they were expressing in terms of their interest and their values," said Haines.
Some of the barriers to sustainable behaviour the researcher found related to price, style, and a lack of knowledge on how to care for and repair garments.
"I had one participant tell me that they purchased the same skirt twice in a very short period of time, simply because the zipper on the first skirt that they had had broken," said Haines.
Elanko says price is really what's driving young people to turn to fast fashion, despite knowing its impact on the environment. Those with less financial means shouldn't be made to choose between style and sustainability, she added.
"I really think it's because they really can't afford anything else," said Elanko.
Consumers do have more options today to shop consciously with independent sustainable brands offering alternatives to fast fashion. However their prices are often much higher than large retailers for a range of reasons, including cost of materials and scale of production.
Haines says sustainable fashion is more accessible for those with privilege. For shoppers looking to balance their finances with their values, Haines recommends allocating some of your fashion budget to buying fewer but more sustainable items, wearing fast fashion items for longer, or exploring second-hand stores.
The future of fashion sustainability
Major brands have been investing more in sustainable products and practices in recent years. Zara outlines on its website its timeline for a list of environmental targets, including reducing their supply chain water impact by 25 per cent by 2025. And recently, H&M announced its baby line was fully compostable.
Shein has also dedicated a page on its website where they list some ways its operations incorporate sustainability, including the use solar-powered vehicles for transporting products and testing out small batches before mass-producing an item.
Shein's success is likely capturing the attention of competitors and raising concerns about the future of the industry. Devillard predicts Shein will continue to grow and their success will push other retailers to "up their game."
But de Brabant is tepid about whether their growth can be sustained, especially given the razor thin margins.
"I'm always a little bit wary about exponential growth rates like that," he said.
For traditional players in the industry, de Brabant doesn't recommend trying to compete on price with Shein and instead says they should focus on their business models that bring stable but good growth.
Shein's success might leave the impression that it's found a way to evade any consequences for its role in accelerating fast fashion. However, both de Brabant and Devillard believe the company will eventually face a reckoning with consumers over environmental, social, and governance concerns.
"At [some] point, the behaviour is going to follow the mindset," said Devillard.
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2022-05-08 08:00:00Z
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