Madison Obata

Associate Editor

Loyola University Chicago School of Law, JD 2026

In late 2023, fast-fashion retailer Shein filed to go public in the U.S. markets, which has been delayed because of tensions between the U.S. and China. On June 3, 2024, which was predicted due to the delay in the U.S. markets. Although the company is well known its clothing prices and its value reported at $66 billion in 2023, the company faces controversy due to its ties to China, negative environmental impact, and alleged forced labor practices.

Defining “fast fashion”

Fast fashion is clothing or products that are created quickly to fit in with the current fashion trends at a low price. Fast fashion companies are responsible for a large percentage of global carbon emissions, using large amounts of water to create the clothing. Furthermore, unwanted clothing ends up in landfills and does not properly biodegrade. Keeping up with trends has also put independent designers on alert because of the possibility of these large fast fashion brands stealing designs.

Shein truly epitomizes the phrase “fast fashion” by using AI to scan for new trends, which gives the company new designs that can result in thousands of new clothing styles on their website. However, even though the company is up-to-date with today’s fashion trends, a lot of the inventory ends up in landfills, contributing to global warming concerns. Nonetheless, Shein is not the only fast fashion company that is guilty of dumping unsold textiles. While the company pumps out at least 300,000 new styles, this is less than other fashion companies such as H&M, which produces around 4000 new styles.

U.S. and China tensions

As the U.S. has seen with the TikTok ban, there is a lot of controversy when it comes to American consumers and Chinese-owned companies. Despite Shein’s executive vice chairman Donald Tang’s decades-long standing as an American citizen, the company faces backlash. The company was founded in China and there is a lack of details regarding structure, relation to the Chinese government, and supply chain structure.

Shein announced that, like TikTok’s effort to align with data compliance, the company will be focusing on compliance efforts when it comes to sourcing material and labor practices. However, without any of the clear details that U.S. lawmakers are demanding, the U.S. IPO continues to be delayed. For now, Shein turns to the London market, which is predicted to improve the UK IPO market and the London Stock Exchange.

Environmental impact

The concern regarding Shein’s supply chain is focused on cotton. U.S. lawmakers are concerned with the source of the cotton and the labor practices around picking the cotton. Currently on Shein’s website, there is nothing that clearly states where the company sources its materials and a report with information about cotton sourcing was removed from Shein’s website late last year. Shein reports that it does not source cotton from Xinjiang (U.S. law bans imports from Xinjiang) or China.

Since fast fashion brands like Shein focus on what is trendy today, a lot of trends quickly die out and the clothing that consumers do or do not buy will end up in landfills. Along with cotton, a lot of clothing includes polyester or other materials that end up sitting in landfills, which could take over 200 years to break down. Even as the clothing breaks down, the small fibers eventually make its way into water ways, which relates back to other concerns such as microplastics in the water.

Labor

Shein’s clothing prices are very low, with tops and pants ranging from $3 to $10. Therefore, Shein is exempt from paying the tariffs on its products because the products are valued less than $800 and the products are directly shipped to the customer. This exemption also makes it harder to confirm whether or not Shein is following legal labor practices. However, the affordability of fast fashion comes from the low-paying labor jobs and cheap materials.

U.S. lawmakers are concerned with the exploitation of forced labor in China’s Xinjiang region. The Uyghur population makes up a north-western region of Xinjiang and also includes mostly Muslim ethnic groups. The U.S. has accused China of genocide in Xinjiang, which has been denied by China and is the reason why the U.S. has a ban on imports from Xinjian. However, this region is a focus for Shein’s manufacturing and material sourcing. Even though Shein claims it does not source cotton from Xinjiang, Bloomberg News reported that testing two batches of garments revealed that they were matches with Xinjiang cotton samples.

Along with the possibility of human rights abuses, Shein faces reports of violations of labor laws. Shein has been accused of 75-hour work weeks with incentives that include that workers are paid for each item of clothing they produce. Shein responded with announcing an investigation and taking immediate action. Shein’s code of conduct for suppliers outlines compliance with local laws, reasonable working hours, no harassment or abuse of employees, and providing a safe and healthy workplace environment.

Slowing down fast fashion

Although Shein has rightfully faced a large amount of scrutiny, other fast fashion brands like H&M, ASOS, and Forever 21 should also face the same scrutiny when it comes to environmental impact and labor laws. However, most eyes are on Shein because of their market value, their popular following on social media, and it being the leading fast fashion brand. There are efforts that can be taken as a participant in the stock market, consumer, and voter.

As a participant in the stock market, people can invest in environmental, social, and governance (ESG) stocks, which is a socially responsible investing strategy that prioritizes the environment and planet.

As a consumer, shifting a mindset toward sustainability rather than what is popular in the moment can help. Focusing on purchasing high-quality pieces that can be worn more than once or buying clothing from secondhand markets can be a part of the solution.

As a voter, keeping an eye on future legislation can change supply chain reporting or enforce labor laws. Legislation like The Fashion Act aims to hold fashion companies accountable for environmental and social impacts.