SHEIN: Ethical Cost of Ultra-fast Fashion
| Case Code: BECG184 Case Length: 17 Pages Period: 2022 Pub Date: 2023 Teaching Note: Available |
Price: Rs.400 Organization: SHEIN Industry: Retailing Countries: China Themes: Business Ethics, Ethics in Business,Ethics in Business |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Rapid Growth
SHEIN adopted a business model termed as ‘ultra-fast-fashion’. The company hired some in-house designers who scouted for the latest fashion trends in the west. SHEIN identified hot searches and trends in countries across the world to predict the most popular colors, fabrics, and styles..
The Suppliers’ Story
Though SHEIN had started as a dropshipping business, it grew into a full-fledged retailer of apparel and related accessories, which called for this a revamped supply chain. But behind a new supply chain, SHEIN had an underlying rule – to keep the prices as low as possible and to bring the designs quickly to the market..
Violation of Labor Laws
Investigations showed that unhealthy labor practices were being used to ensure a quick turnover time for the products. Investigators interviewed some of the people who were part of SHEIN’s supply chain like workers, factory bosses, and workshop owners..
A secretive company?
SHEIN was often dubbed as “China’s most mysterious billion-dollar company”. It was in the lowest segment of the Fashion Transparency Index (Refer to Exhibit XI for A Glimpse of the Fashion Transparency Index)..
Culturally Insensitive Products
On July 4, 2020, it was noticed that SHEIN was selling a product labelled as a decorative frilled Greek carpet on its website. These mats had pictures of mosques and the Kabaa on them. Such mats were used by Muslims to kneel down for prayers. When the brand was criticized for the mats, it issued a statement of apology..
Plagiarized Products
SHEIN was also accused of plagiarism. Many people and companies accused the company of using their designs without their approval. William Miles, an Intellectual property lawyer at Briffa, a specialist art law firm, said, “The problem of designs being lifted is becoming ever more prevalent in the fast fashion sector. The fundamental issue, I think, is that fashion companies are under pressure to produce large volumes of new and fashionable goods, so their designers often go for the quick fix.”..
What lies ahead?
In 2021, SHEIN published it first Sustainability and Social Impact Report. (Refer to Exhibit XIII for SHEIN’s Top Violation Categories). In the report, SHEIN suggested that it was aware of the problems in its supply chain and was taking corrective actions to improve the situation. The company audited 700 of its suppliers in 2021 and found that 83% of them needed some corrective action. Adam Whinston, head of environmental, social and governance for Shein, said, “While the audit did reveal an issue with working hours, this has been raised with both manufacturers and we have significantly scaled back our orders from them until they take effective action.” ..
Exhibits
Exhibit I: A Note on Fast Fashion
Exhibit II: Number of New Fast Fashion Styles Added in the US
Exhibit III: SHEIN’s Online Presence (As of 2021)
Exhibit IV: Design to Store Time of Fast Fashion Giants
Exhibit V: Key Success Factors of SHEIN
Exhibit VI: Revenue Growth of Fast Fashion Giants ($ Billion)
Exhibit VII: SHEIN Hauls
Exhibit VIII: Value of Fast Fashion Giants ($ Billion)
Exhibit IX: SHEIN Supply Chain Model
Exhibit X: Labour Dispatch Practice in China
Exhibit XI: A Glimpse of the Fashion Transparency Index
Exhibit XII: SHEIN’s Corporate Structure
Exhibit XIII: SHEIN’s Top Violation Categories
Exhibit XIV: Salient Features of SHEIN Supplier Code of Conduct
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