That there are a lot of people walking down Fuencarral street is not news, that there is a queue to enter a store located in the same street, but if that queue is multiplied by 10, then we are at a milestone that makes people talk. This is what Shein generated upon his physical arrival in the Spanish market.
These days, the Asian brand that conquers millennials is giving people something to talk about. And it is that its business model, which sweeps sales, has an atypical background with respect to conventional retail that arises from tailoring.
To understand it and you have to apply the comparison of those who are behind the fashion empires. Amancio Ortega founded Zara after venturing into bathrobes. Erling Persson, founder of h&m, started his empire when he was selling women’s clothing in a shop in a small Swedish town. Xu Yangtian, however, had no textile experience, but was an expert in search engine optimization.
The Economist describes him as bringing Western fashionistas a Chinese style of “social commerce,” combining social media with online shopping. And it is that he has the perfect formula: ‘low cost’ product, dissemination through influencers, and guaranteed impact or consumption.
This formula applied to Western trade, which initially only worked on the web, and which now has a physical presence in France, the United States, Mexico and recently in Spain, has triggered the Asian giant to reach a valuation of about 100 billion dollars, a figure that neither Inditex nor H&M together, their main rivals, achieve.
Formula: ‘fast fashion’
“Shein’s success is based on a turbocharged version of the ‘fast fashion’ formula of offering a constantly updated range of clothing at bargain prices,” explains The Economist. The problem is that behind these immensities of textile production, behind the concept of ‘fast fashion’, there are human stories that make possible this operation that borders the limits of the “ethical”.
In this context, a study prepared by the Swiss defense group Public Eye reported that workers in six factories that supply Shein in Guangzhou work 75 hours per week.
One day off per month and without contracts
As detailed in the text, the employees they interviewed stated that they worked three shifts per day, with only one day off per month. However, according to Chinese labor law, a work week can comprise a maximum of 40 hours, overtime cannot exceed 36 hours per month, and workers must have at least one day off per week.
The Public Eye document also notes the absence of employment contracts. “Factories like these do not have to give out contracts, or so the workers believe. It is not surprising that in small and informal workshops they do not exist and companies with more than 100 employees do not issue them either,” argues the Swiss advocacy group.
Chinese labor law requires that they do so and provide a copy of the contract to employees. Along these lines, the Public Eye investigation affirms that companies of this size are generally not at risk of being forced to pay significant damages if they are sued for lack of contracts.
Shein’s Defense
Faced with the explosion that this publication generated at the media level, Shein in his defense alleged that, upon learning of the report, they requested “an immediate copy.” “When we receive and review it, we will initiate an investigation. We have a strict Code of Conduct for suppliers that includes health and safety policies and complies with local laws. If a breach is identified, we will take immediate action,” they responded from the company.
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