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Since the first dress modeled off of a catwalk trend hit stores for a fraction of the cost, fast fashion has become its own industry. Some credit Amancio Ortega’s debut of Zara in 1963, offering affordable designs from popular high-end designers, as the beginning of the fast fashion craze. Since then, the quick response concept has seen retailers like Shein rise to $100 billion valuations while offering customers a rotation of 2,000 new styles daily. However, as one of the biggest fast fashion retailers, the company has been singled-out for its exploitation of workers, pollution, waste and apparent lack of responsibility over its environmental and social impact in producing its cheap garments. Now, with a slip in sales, some activists, environmentalists and others rising against fast fashion are correlating the brand’s slip in sales as a sign that the craze for fast fashion might be over as shoppers adopt alternatives such as slow fashion or zero waste lifestyles.
Growth doesn’t always last forever. Despite seeing years of of explosive growth, fast fashion juggernaut, Shein, has now taken a recent hit to sales. Prices as low as $5 for a dress, a fast rotation of more than 6,000 new styles added daily and influencer campaigns saw it become one of the biggest Chinese fashion retailers making $15.7 billion in sales during the pandemic in 2021. In 2022, Shein generated $30 billion, a 91% increase on what it made in 2021. However, according to The Financial Times, the company has dropped from a $100 billion valuation in early 2022 to a $64 billion in 2023.
Some experts credit this slip in sales growth to the criticism over Shein’s social and environmental impact. In 2021, The Public Eye published an in-depth investigation of several of the retailer’s suppliers in Guangzhou. A few of the concerns were employee hours which amounted to over 75 hours weekly, building safety violations and a pay-per-piece model without an employment contract. Similar accounts were also reported in an investigation from Channel 4 and The i newspaper in 2022 showing that some female employees worked 18-hour days to earn $556 monthly for making 500 pieces of clothing daily.
Shein’s apparent lack of social governance does not sit well with all of its customer base and could be a driving factor for its lack of recent growth. Reports showing Gen-Z’s growing interest in purchasing sustainable and ethically-made products, could mean that the retailer is no longer remaining popular with its customer base. According to Unidays, 55% of students bought more eco-friendly products in 2022 than they did in 2021. Also in 2022, was a report from the World Economic Forum showing that 62% of Gen Z shoppers preferred to buy from sustainable brands and many are prepared to spend more for these products.
Consumer pressure through campaigns like #PayUp or #WhoMadeMyClothes have seen more brands reassess their supply chains. Some companies have released social, environmental or impact reports detailing these assessments and the changes that they’ve made to ensure that labor rights are upheld in factories where their products are made. Shein is no different in that the brand has responded with its own report sharing that 60% of their suppliers’ factories have 1-3 major risks. But, as sustainable and slow fashion retailers rise whose ethics match those of their targeted customer base, is it enough to rebuild the customer trust needed to fuel growth? Or, is Shein’s loss in sales the beginning of a new trend – the rise of sustainable brands?