PARIS: Chinese cut-price fast-fashion giant Shein defended its business model, saying demand-based production accounted for its low prices and not forced or cheap labour. Founded in China in 2008, Shein has swiftly claimed a top place in the global fast-fashion marketplace, offering young social-media-savvy customers low-priced collections that turn over at a steady clip.
The Singapore-based firm’s strategy chief Peter Pernot-Day said that Shein is “an on-demand manufacturer... the global pioneer of this technology” during a visit to Paris to attend the opening of a Shein pop-up store.
Testing products with a small run and spooling up production if there was demand meant Shein has eliminated “inventory risk”, Pernot-Day said, wiping out “the most significant component of garment cost”. Shein’s sales rose 60% in 2021 to $16 billion worldwide, Bloomberg reported—just behind Swedish high-street name H&M.
With 11,000 employees worldwide and counting, Shein has big plans for further expansion. Online, Shein plans to create a digital marketplace that will allow shoppers to buy other products from other brands through its platform.
Pernot-Day said the fashion and lifestyle shopping experience would resemble a “digital grand magasin”, referring to Paris’ swanky department stores. But relentless expansion of sales and production is exactly what NGOs and some governments hold against Shein, saying its low costs cannot be compatible with fair treatment of labour or the environment.
Pernot-Day insisted that doing away with the risk of being left with unsold inventory and warehousing accounted for its ability to offer extremely low prices, such as T-Shirts for just $5.50.
“We are able to accurately measure... demand and only produce enough garments to meet that,” he said.
Shein’s efforts to green its image include a second-hand clothing business in the United States, materials research and integrating recycled materials in its products.