Chinese brand ‘SHEIN’ singly controls USA’s 40% fast fashion

Shein's on-demand business model is the reason for its low prices

Desk Report November 30, 2023Last Updated: November 30, 2023

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Figure: SHEIN has catapulted to the top of fast fashion, but not without controversy © ABC News

SHEIN, a Chinese fast fashion company, has become a major player in the US market. According to a recent report, SHEIN now controls 40% of the fast fashion market in the US. This is a significant increase from just a few years ago, when SHEIN was a relatively unknown brand.

One of the reasons for SHEIN’s success is its low prices. The company is able to sell its clothes for much cheaper than its competitors because it uses an on-demand business model. This means that SHEIN only produces a small number of each item, based on customer demand. This helps to reduce waste and keep costs down.

SHEIN’s on-demand business model has also been criticized. Some critics have said that it leads to worker abuse. In 2021, an investigation by the Wall Street Journal found that SHEIN suppliers were paying workers as little as $1.50 per hour.

SHEIN has also been criticized for its environmental impact. The company’s fast fashion model produces a lot of waste. In 2022, SHEIN was estimated to have produced 11 million tons of carbon emissions.

Despite these criticisms, SHEIN remains a popular brand among young consumers. The company’s low prices and trendy designs have made it a go-to destination for shoppers who are looking for a quick and affordable way to update their wardrobes.

What is SHEIN’s on-demand business model?

SHEIN’s on-demand business model is a system in which the company only produces a small number of each item, based on customer demand. This helps to reduce waste and keep costs down.

Here are the steps involved in SHEIN’s on-demand business model:

SHEIN designers create new designs based on data from popular items.
SHEIN only initially produces 100 to 200 units of each new product.
SHEIN uses technology that monitors users’ engagement activity.
When a customer shows interest in an item, SHEIN takes note.
SHEIN creates new designs based on data from popular items.
If an item is popular, SHEIN starts producing more.

What are the criticisms of SHEIN’s on-demand business model?

SHEIN’s on-demand business model has been criticized for leading to worker abuse and environmental impact.

Worker abuse: Some critics have said that SHEIN’s on-demand business model leads to worker abuse because it puts pressure on suppliers to produce clothes quickly and cheaply. This can lead to workers being paid low wages and working long hours.
Environmental impact: SHEIN’s fast fashion model produces a lot of waste. The company’s clothes are often made from cheap, synthetic materials that are not biodegradable. This means that they end up in landfills, where they can take hundreds of years to decompose.

What is SHEIN doing to address these criticisms?

SHEIN has said that it is committed to improving its labor practices and environmental impact. The company has released a number of reports detailing its efforts to address these issues. However, some critics have said that SHEIN needs to do more to be transparent about its supply chain and to ensure that its workers are being treated fairly.

SHEIN’s on-demand business model is a complex issue with both benefits and drawbacks. On the one hand, it helps to reduce waste and keep costs down. On the other hand, it has been criticized for leading to worker abuse and environmental impact. It remains to be seen whether SHEIN can address these criticisms and continue to grow its business in a sustainable and ethical way.