Jessica is embarrassed by the way she used to shop. Two years ago, she and her friends would post regular videos of their Shein hauls on TikTok – in them, they would unbox and then parade around in brand-new colourful dresses, tops and jackets to a slew of fire emojis in the comments below.
“Shopping [from Shein] felt like getting a coffee or a packet of crisps – it was a spur-of-the-moment thing you didn’t have to feel guilty about,” says Jessica, 22.
The clothes themselves still cost as little as lunch-on-the-go – £8 for a dress, £5 for a top – but today Jessica is less thrilled about sharing her purchases with the world.
“I don’t want everyone to know I shop there anymore,” she says, citing the quality of the clothes and the environmental impact as her reasons why. “Sure, we all do it every now and then, but it’s not something to be proud of.”
The brand, which was founded in Nanjing in China in 2008 but is now based in Singapore, has felt all but indestructible for years – a funding round in 2022 put its value at $100 billion (£76 billion), making it the biggest and richest fashion firm on earth. Now, for the first time, it appears to be faltering.
Well, sort of. In late February, news emerged that while sales for last year increased by 19 per cent to £30 billion, they were significantly lower than the £36 billion the company had projected for 2024, while profits dropped by nearly 40 per cent.
“Yes, sales were up but profits were down dramatically,” says Dana Thomas, the journalist and author of Fashionopolis: The Price of Fast Fashion and the Future of Clothes. “What’s causing the drop? New, and better, regulation, traceability, and accountability in the apparel business.”
Shein – which is still privately owned – last week confirmed its plans to become a listed company and reports suggest that they have chosen to do so on the London Stock Exchange. However, questions are now being raised about whether this should go ahead.
Small independent brands have, for years now, been accusing Shein of plagiarism without much success. But rumours of new regulations against imports under $800 (£620) by the US could hit the company hard. Trump’s tariffs will cause even more problems – as will EU plans for a crackdown later this year. Hence Shein, which had reportedly initially hoped to list in New York, looking to London. Rumours say the flotation could take place as early as next month – and this news has been welcomed in many quarters as a listing of this size could give the beleaguered City a much-needed injection of cash.
Standing in their way is the “Say No to Shein” campaign, backed by campaigners including Global Justice Now and a handful of Labour MPs, which is urging the government to block a float in London.
They point to the environmental cost: according to an investigation by Rest of World, Shein added between 2,000 and 10,000 new individual styles to its app each day from July to December 2021. Another argument is that workers are suffering: a Channel 4 investigation claimed that labourers making Shein’s clothes in contractor-owned factories were often working up to 18 hours a day, and being paid as little as 3p per item, with no weekends and only one day off per month.
Add to that, Shein has been questioned by British MPs about using cotton from Xinjiang, the Muslim-majority part of China where the local Uighur population is reportedly coerced into manual labour and where video evidence shows that children have been forcibly taken from their parents and put in re-education camps. The general counsel for Shein’s European arm repeatedly said she was not qualified to answer questions about the fast-fashion retailer’s supply chain; one MP accused her of “wilful ignorance”.
A spokesperson for the brand says: “Shein has a zero-tolerance policy on forced labour, and we are committed to respecting human rights. We take visibility across our entire supply chain seriously and we require our contract manufacturers to only source cotton from approved regions.”
‘Landfill waiting to happen’
Shein also argues that its clothes are cheap because of an agile business model which is built around reducing waste. Unlike other brands, it tends to make around 200 test samples of each item – if consumers show interest, it then makes thousands more. As a result, its excess is lower than many high-street names. It also claims that because everything is made in China in one small area near the Pearl River Delta, its costs are lower than for equivalent companies that tend to manufacture in an array of sites around the world.
“There is a common misperception that affordable prices must mean low quality,” says the Shein spokesperson.
Patrick Grant, the journalist and author of Less: Stop Buying So Much Rubbish scoffs at the idea that a brand that he describes as making “landfill waiting to happen” could ever take the environmental high road. “If they release 2,000 new styles a day, that’s 400,000 test garments a day. And then of the thousands they do produce [in high quantities], how many of those then go unsold? It is also worth noting that China has some of the dirtiest power on the planet because most of it is coal-fired.”
“I don’t think we should allow Shein to float in London,” he adds, “Aside from the ethical and environmental arguments, of which there are many, I think it will be a disaster – share prices will continue to drop and while you might get a brief jump while it lists, this is a not a good move for shareholders and it is absolutely not the right message for Britain to be putting out in the world.”
“I am hyper-sceptical about it,” agrees one fund manager. “It’s a sign of how desperate London is to get a listing.”
City analyst Wayne Brown has a different perspective.“[Shein is] a proper disruptive digital retailer that happens to be very good at technology,” he said in an interview with the Telegraph. “Any good story which brings liquidity and fosters people to view the London stock market as a good place to raise capital… has to be looked upon favourably.”
Of course, when you have disrupted the market this successfully, rivals with a similar business model will always emerge. Temu is another Chinese company [albeit one selling a range of goods beyond fashion] that is in the process of doing to Shein what it did to ASOS, Boohoo and Pretty Little Thing: undercutting them with more designs, often at an even lower price.
“The thing with these companies is that they are built on very thin foundations,” says Grant. “In the past, brands would build loyalty over many years by standing for something, but I don’t think [these online-only fast fashion retailers] stand for anything: there’s no trust, no design aesthetic and no personality. They are just hollow vessels that create a following very quickly by spending money on marketing, but then someone else comes along and spends more and they crumble quickly.”
The race to the bottom that has occurred since the entire concept of fast fashion burst onto the international retail scene means that even if we don’t shop from these websites, few of us will have escaped their influence.
Other high street names – watching their profits go into freefall – have been forced to at least partly emulate them. As anyone who compares the quality of mid-range brands from the 1990s will know, clothes are made with far less care and with lower-quality materials now. In fact, fast fashion is now cheaper than it was 30 years ago. Partly this is due to our culture of excess consumption, but mostly it is because everyone has been forced to drop their prices, as the fashion industry finds it can no longer persuade people who are used to spending £5 on an item of clothing to spend £50.
“We used to sell clothes based on design and craft and talent, and now we sell them through influencers who peddle the dream of a better lifestyle we can’t actually have,” says Grant. “It’s grim.”
‘Gen Z are buying on Vinted in droves’
Nowhere has the dent in Shein’s upward trajectory been welcomed more than by the fashion industry itself. Aside from city analysts and Shein publicists, everyone I spoke to for this piece is hoping that a fall in profits is at least partly due to a shift in consumer habits. For them, there remains a shimmer of hope: that younger generations are shifting their focus away from fast fashion towards second-hand websites.
“Gens Z and A are buying on Vinted and Depop in their droves – they are looking to purchase cult brand items at fast-fashion prices, meaning the need for fast fashion for those demographics is being decimated by the resale market of more aspirational brands,” says Tamara Cincik, the founder of Fashion Roundtable.
The second-hand clothing market is growing at 18 times the rate of new clothing, and the proliferation of resale apps means people are now thinking carefully about the value of an item before they purchase it.
“If they shop from Shein or Temu, they know they know they can’t easily sell it,” says Grant. “This means they now place a monetary value on an item of clothing at the start of the process which has huge and very positive implications.”
And Shein is not the only fast-fashion brand in trouble: H&M, Boohoo, and PrettyLittleThing have all reported a drop in earnings and revenue in the last six months. The Boohoo Group has now announced it is rebranding itself to become The Debenhams Group – illustrating how toxic the fast fashion label is becoming. Fashion insiders say that even though Debenhams itself makes up just a quarter of the group’s revenue, executives have decided to focus on its growth over that of their fast-fashion labels.
“Maybe the noise being made by activists is starting to be heard by consumers?” says Thomas. “Or maybe consumers are burned out by all that shopping, and – according to experts – prefer ‘experiences’, as opposed to hoarding stuff. Hard to say. I suppose in time we’ll see if this is a blip or a trend. I’m hoping it’s a trend.”
And then there is the embarrassment factor, which – when you are targeting young people – can be particularly damaging.
“In the Nineties, Vogue editors would wear Topshop to the shows,” says Peter Robinson, the former head of PR for New Look. “Now, nobody in the public eye now would be caught dead wearing Shein or Temu.”
Jessica agrees – adding that all her friends are still making unboxing videos for TikTok, but now their clothing brand of choice is second-hand Kate Moss for Topshop pieces that they found on Vinted.