Shein mired in another controversy around formalization trip for influencers

11 July 2023, Mumbai

Founded in Nanjing, China in October 2008 as ZZKKO by entrepreneur Chris Xu, Shein grew to become the world's largest fashion retailer by 2022.

Global fashion & lifestyle e-retailer

Shein obviously is the envy of the fashion trade as it trailblazed its way into the wardrobes and hearts of women in a short time span, making it one of the biggest success stories.

With its super-cheap fast fashion that its fans couldn’t seem to have more of, Shein has particularly made a huge dent in a large market like the US.

Indeed this saw American policymakers go after Shein, all guns blazing. What shook the American lawmakers is that Shein was planning to sink itself into the heart of America by launching an IPO in the US.

Of course, that is still up for debate but clearly, the US and many parts of the Western world have regarded the Chinese brand as an interloper and a dodgy one at that.

Facts about the success story

From Global Triumph to Local Turmoil; Shein generated $30 billion in 2022, a 91 percent increase from the $15.7 billion it made in 2021. It has an estimated 74.7 million active shoppers of which, 13.7 million are based in the US.

Shein the app was downloaded 200 million times in 2022, making it the most downloaded shopping app of that year.

Recently it was valued at $68 billion ahead of a potential late 2023 IPO. Although Shein’s early growth came primarily from India and Saudi Arabia in the past two years, Brazil, Mexico, and the US have been its largest markets.

In a complete turnaround, India, the country that had contributed to Shein’s initial success banned the app in June 2020 as India and China faced off each other over land disputes in the Himalayan terrain that separates the two countries.

App

Shein was amongst the total 59 apps that were sent packing. However, a resilient Shein continued selling its items in India through Amazon and the latest news is Shein is partnering with the retail arm of Mukesh Ambani’s Reliance Industries for a return to India. A Shein spokesperson confirmed this in May 2023.

However, Reliance Retail and Shein are tightlipped about a major comeback to India but media reports suggest the two organizations had struck a licensing deal in which Shein will get a share of the profits and this license would allow its return.

The catch is, Shein plans to produce in India to cater to the domestic market.

Mired in controversy

Shein and controversy have been going hand in hand for some time. And the recent controversy erupted when a team of American social media influencers was taken on a familiarization trip to a manufacturing unit in China so Shein could first-hand give it's North American customers a genuine point of view of its much-maligned production process.

Unveiling the Truth Behind Shein

The well-executed familiarization trip was to help address the issues Shein keeps getting bombarded with in terms of its quick and cheap manufacturing, forced Uighur labour and child workers, dismal working conditions and paltry wages, and so on.

However, according to the five social media influencers, what they saw at the production hub belied the accusations Shein faces in the Western world. “I’m not going to lie, I really expected it to look like it does in the movies, like really dark and dingy, but I was really surprised to see each piece handled with care,” said Destene Sudduth, one of the five visitors, in her Instagram feed.

Surprising Glimpse

The perfectly executed PR campaign was ripped to shreds by many critics, particularly by authors Aja Barber and Cora Harrington who accused the five of being Shein’s spokesperson unwittingly.

Since the controversy started, the social media influencers have deleted some posts but continue upholding that what they heard about Shein in the US is far from what actually Shein is in China’s manufacturing hubs.

Also, Shein has been accused of exploiting trade loopholes to import goods into the US without paying duties or making shipments subject to human rights reviews, said a U.S. House committee report.

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