Riccardo Liguori The Chinese e-commerce giant spoke at the Venice Sustainable Fashion Forum with a new self-narrative. The company seems to want to respond to growing pressure from consumers, environmental organizations and regulatory authorities, who are asking for greater transparency and commitment towards sustainability (environmental and social)
Within this context, with the industry in discussion especially at the heart of the claims of the impact on the environment and overproduction, Shein claims that it only produces based on real demand.
Peter Pernot-Day is the Head of Strategic Relations for North America and Europe at Shein-the brand defending its approach and production model against this “ultra-fashion” or “fast-fashion” label. When interviewed by Andrea Cabrini, Director of Class CNBC and Class Life in Venice, during the Venice Sustainable Fashion Forum, Pernot-Day told him: “We don’t use the term fast fashion or ultra fashion. We prefer to call ourselves on-demand fashion.”
Shein’s model explained
How does that work in practice? “Our designers start by producing just 100 units per item. These go on our e-commerce sites, where we test customer reaction-from sales to likes on our mobile app. Only if there’s interest do we go back to our manufacturers and order a second run of 400 or 800 units. This way, we avoid overproducing more than the market actually wants to buy,” Pernot-Day said.
This strategy seems to be working for Gen Z. “Our main customer globally is female, usually between the ages of 18 and 33, which lets us have a wide variety of clothing and sizes. This inclusivity has strongly resonated with Generation Z.”
Supply chain management also forms a big part of Shein’s model: “By eliminating inventory risk, staying online-only, closely monitoring margins, and using a fully digital supplier management system, we achieve economies of scale and highly competitive material costs.”
Shein works with an estimated 5,800 suppliers, primarily small and medium-sized businesses, in China, Brazil, and Turkey. “We have zero tolerance for forced labor and child labor“, Pernot-Day emphasized. “We want the workplaces to be safe. We do this through our supplier code of conduct, through regular audits-we conducted almost 4,000 in 2023-and through a supplier community empowerment program, with an investment of 70 million dollars in upgrading their facilities through more sustainable technologies such as solarization, digital thermographic printing, and cold transfer processes. ”
Environmental and social uncertainties
However, the “on-demand” model has also got its shadows: The fast production and huge quantity of new items coming every single day are one more critical point for the company and fuel overconsumption, the speed at which garments become obsolete, and consequently, the throwaway culture and waste production.
Shein’s carbon footprint meanwhile jumped from 9.17 million metric tons of CO2 in 2022 to 23.16 million tons in 2023. “A big increase,” Cabrini noted. Pernot-Day attributed this jump to business growth but re-iterated Shein’s commitments to greener pastures: “We aim to reduce our overall carbon emissions by 25% by 2030.”
For this objective, Shein collaborates with Queen of Raw, a New York-based startup that maps all the residual fabric stocks to integrate them into Shein’s collections, thereby limiting the demand for new raw materials.
However, a Greenpeace investigation carried out in 2022 found hazardous chemicals, such as phthalates and formaldehyde, in Shein’s clothing and accessories, which raises a question about the company’s actual commitment to environmental sustainability and consumer health.
There are also persistent concerns about social sustainability. A report by the Swiss NGO Public Eye last May showed poor working conditions and low wages at some of the factories that produce for Shein, testing the credibility of the company’s audits and monitoring. The report cited interviews with workers in Shein factories in China who related accounts of arduous shifts, pay less than allowed by the minimum wage laws, and safety violations.
Pernot-Day reinforced Shein’s commitment to transparency and protection of intellectual property: “We have teams in both the United States and China actively reviewing designs before they go live on the site to make sure they don’t violate any rights.” He also mentioned the program SheinX, a design incubator supporting independent designers and artists, as a proof of the commitment of Shein to creativity and innovation.
