Ten years in the business, Shein has grown rapidly by winning over shoppers with unbeatable prices and a kaleidoscope of new products. In the process, e-commerce retailers have questioned their ties, particularly with China, accused them of stealing designer work, and voiced their concerns about how cheap goods contribute to environmental waste. It has also garnered high praise from critics.
Shane has kept everything tight-lipped for the most part. Now the company is looking to change its perception of its business and practices ahead of its expected initial public offering filing.
We’re pouring millions of dollars into initiatives that try to address years of criticism as a way to get goodwill. In the process, Shane has established itself as the retailer with which industry stalwarts inevitably have to share space.
“We try to engage with a lot of stakeholders,” Peter Day, Shein’s head of strategy and corporate affairs, said in an interview. “We are an upstart brand and have done a lot of things well. There are still some things we need to learn how to do, but the best way to do that is by talking to the community.”
Shein has one of the most downloaded mobile apps, has its own active hashtag (#Sheinhaus) on TikTok, and is right behind Amazon and Nike when it comes to Gen Z. Favorite e-commerce websiteSell mesh dresses, glitter t-shirts, two-piece lime green bathing suits and more for under $9.
Shein, who is regularly accused of copying design, recently held an all-day summit in Los Angeles with hundreds of designers to show that they want to work with them, not against them. . The event is part of her $55 million initiative, which Shein launched in 2021, to hire and fund artisans to create the site’s clothing line.
The program has been around for several years since designer Justin Romero, co-founder of fashion brand Freak City, joined a chorus of designers in 2020 calling Shein out for selling clothes that look like copies of their own products. started months later.
After an initial conversation with Shane’s legal team, Mr. Romero spoke directly with George Chao, president of Shane’s U.S. business. Romero asked for data on how much of the clothing in question Shane sold.
“After seeing how much they had already sold our product, it seemed like we were already making a deal without agreeing,” Romero said.
From there, Romero and Shane began collaborating under a program the company calls ShaneX. Romero and his co-founder Valerie Campbell are on board.
Through Shein X, the company funds independent designers, pays for production, and sells merchandise on Shein’s site. Designers receive a commission on sales or a portion of the profits. This is usually limited to designers who have licensing agreements with retailers. Chao said at a summit in Los Angeles last month that about 3,000 participants had received a total of $5 million in commissions, and his remarks were met with cheers.
Shein is looking to acquire a diverse group of designers, creating a pipeline of potential industry ambassadors. A spokesperson for the company said the retailer doesn’t collect demographic information on its designers, but the team that runs the program emphasized that Shein X’s artists and designers come from a myriad of backgrounds. I’m here.
“What they want to do is make more money, and having a more diverse roster will help generate millions and billions of gross margins,” said Sean Grain Carter, a business professor at the Fashion Institute of Technology. “This is not an altruistic endeavor. This is a financial business attempt.”
At the all-day event held in the heart of the city’s downtown Fashion District, Shein demonstrated that she is an innovator with a profitable business model and an advocate for diversity and inclusion. She established the ties between pop culture and fashion by conducting panel discussions with haute couture designers and health and beauty influencers. She finished the day with dancing and playing music. Shane’s Head of Sustainability introduced designers to recycled materials, such as polyester, which the company encourages to use.
“We have grown very quickly as a business,” Caitrin Watson, head of sustainability, who was hired last April, told the designers in the room. “But as you grow up, people want to know more than what products you sell. They want to know who you are as a brand. What are your values?” What is it? How are the clothes made? What are the materials?”
This kind of message seems to have been devised to answer questions about how Shane does business. Investors group Shane as a fast-fashion player. The company rejects its title, which is reminiscent of piles of textiles dumped in landfills. Critics say its ultra-low price contributes to overconsumption and environmental waste. Retailers say they are more focused on sustainable solutions.
And recently, Shein’s ties to China have raised concerns that the company is abusing import laws. The company was founded in Nanjing but is now based in Singapore. Most of the factories that produce its clothing are in China.
Critics like the group Shut Down Shein, which formed in March, say that Shein’s shipping directly to customers under certain price thresholds has exacerbated the scrutiny of U.S. Customs and Border Protection and billions of dollars in tariffs. Like most other U.S. retailers, these shipments aren’t recorded in bulk, the group said.
Shut Down Shein also alleges that the company commits human rights abuses. Her two members of Congress on Monday sent a letter to the U.S. Securities and Exchange Commission certifying, through an independent agency, that Shein did not use forced Uyghur labor as a condition of the planned sale. I asked for what I needed.
In a statement, the company said it operates “legally and with full respect for the communities we serve.”
“As a global company with customers and operations around the world, Shein takes visibility across the supply chain seriously,” the statement said.
Attendees at the Los Angeles event didn’t seem to dwell too much on the wide-ranging concerns of bystanders about Shane. They seemed more interested in networking with Shein executives and fellow designers. They tinkered with their latest designs and wanted to learn more about how they could use Shane’s name to enhance their designs.
The Shein X designer said the retailer’s huge number of customers contributed to the brand’s rapid growth and high sales rates. During happy hour, two attendees jumped up and down noticing Shein had posted a photo of them on her Instagram and tagged them, gaining more exposure to her 1.7 million followers.
“When you look at the number of people drawn to the Shein brand, there are millions of people. Sold at Shein from January 2021.
Shein still uses 100 in-house designers and third-party suppliers to design the clothes shoppers see on its website and mobile apps. And on TikTok, he continues to post videos accusing independent designers of defrauding the company.
In 2020, Shein established a team in the United States to investigate potential intellectual property infringement. Previously, these reviews were conducted in China. It also invested in image recognition technology to recognize cases of potential infringement and required third-party suppliers to certify that their products did not infringe the intellectual property of others. A spokesperson said that from 2021 to 2022, he said infringement allegations dropped at her double-digit rate. She declined to share exact figures.
Armand Mehidri, a 30-year-old Dubai-based designer participating in the Shein X program, said Shein used the data to help sell more of his designs. After receiving a message from Shein warning him that one of his shirts was selling well and suggesting a hoodie and tank top with the same design, he did just that and they continued to sell, he said. Told.
Shein X has given designers an opportunity to expand their business, but working with retailers is still a challenge. Casey Russell, 33, said on social media in 2022 that after announcing she was accepted into the program in 2022, two days later, she said, “Doing something with a brand that’s considered bad will get you harassed like you always do.” It said I received an email. Critics flooded his Instagram comments and direct messages, calling him sold out and claiming he was destroying the environment by making fast-fashion clothes.
When Russell launched the Shein line, it wasn’t given a budget. A men’s collection named Claude Russell produced 13 items. In the first round, he said he made about $53,000 in sales. At the Los Angeles gathering, Shein set up a booth displaying his black and green cloak and his matching button-up shirts, raising about $5,000 in sales.
“If you work in this industry, you’ll realize that a lot of the things people say are actually not as bad as they look,” Russell said.
Sapna Maheshwari contributed to the report.
