Julia King, a 20-year-old art student from Texas, noticed that a particular kind of sweater vest was taking over the internet last year. A wave of millennium-era nostalgia has seen celebrities wearing shrunken, argyle-patterned styles like Clueless. King found a child-sized pink-and-red knitted vest that fit tightly and fit on an adult in a secondhand shop. King wore it with jeans and a Dior bag, snapped a picture, and then listed it for $22 on Depop, an eBay-like app that is popular among Gen Z.
She forgot about the vest after it sold. King received a message from one of her followers. They told her that an obscure Chinese shopping site called Preguy was using her photo to sell its own cheap reproduction of the thrift-store vest. King said seeing the pictures of him on a random fast-fashion website made him really upset.
The vest was soon found on many other clothing sites and e- commerce marketplaces. At one point, another person's manicured hand was awkwardly manipulated on to King's torso.
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Retailers began using their own product photos, but that didn't make the experience any less strange. The vests were marketed by brands such as GadgetVLot and Weania with strings of words such as "Autumn Preppy Style Streetwear Clothes" and "Plaid Cotton Knitted Vest Elastic V-neck Sweater Crop."
A vest that was once a one-off vintage find was now available for anyone to buy, and often for a lower price. It had been plucked from social media and dropped into the frenzied machine of the global e-commerce market. In the factories of China's swelling ultra-fast-fashion industry, it was growing almost of its own accord.
Over the past decade, thousands of Chinese clothing manufacturers have begun selling directly to international consumers online, circumventing retailers that traditionally source their products from the country. They have been able to use English-language social media profiles, Amazon seller accounts, and access to garment supply chains to fuel the growth of trends and flooded closets with a wave of impossibly cheap clothes.
Rest of World, a non-profit, tech-focused journalism outlet based in New York, spent six months investigating this new ecosystem, speaking with manufacturers, collecting social media and product data, making test buys and interviewing shoppers and industry experts in China and the US. The results of that reporting show how Chinese apparel makers have evolved to cater to the desires of internet-native consumers, and changed their consumption habits in the process. Shein is the most successful, well-known and well-funded online retailer of its kind.
Shein is one of the world's largest fashion companies, but little is known about its beginnings. It was founded in 2012 under the name She Inside and began selling wedding dresses abroad from its first headquarters in the Chinese city of Nanjing. Shein denied it ever sold wedding dresses, but wouldn't specify other details about its history. The company says its founder, Chris Xu, was born in China, but a press release says he was from the US. Shein's core business is still selling clothes for women in their teens and 20s, even though it expanded to offer apparel for women, men and children.
Shein's clothes aren't intended for Chinese customers, but are destined for export. In May, the company became the most popular shopping app in the US on both mobile platforms, and in the same month, topped the rankings in more than 50 other countries. Macys.com is the most popular fashion website in the world.
Shein's sales had doubled from the year before, to $10 billion by 2020. In June, the company accounted for almost as much fast- fashion sales as H&M and Zara combined. Shein was one of the most valuable private companies in the tech industry, according to a report. Shein wouldn't say if the sales or valuation figures were accurate.
Shein has brought with it a number of controversies. Several designers have accused it of stealing their work, and several brands have sued the company for trademark violations. Shein said it doesn't comment on ongoing litigation, and the former settled for an undisclosed sum. It was pilloried for selling culturally or historically offensive products. Advocacy groups and journalists have found evidence that Shein's bikinis and crop tops are being made by people working under brutal conditions, while environmental experts warned that those same items are often only being worn once before being thrown away.
Shein has an aggressive business model. It is more like Amazon than H&M, and it has 6,000 Chinese clothing factories. Shein can order new inventory virtually on demand because of the proprietary internal management software that collects feedback about which items are hits or misses. Some designs are original and others are from the factories. A polished advertising operation is run from Shein's head offices in Guangzhou.
Shein tests thousands of different items at the same time through its manufacturing partners in China. Between July and December of 2021, it added anywhere between 2,000 and 10,000 individual styles to its app each day, according to data collected in the course of Rest of World's investigations. The company said that it starts by ordering a small amount of each garment, and then waits to see how buyers respond. Shein orders more if the sweater vest is a hit. The system is called a large-scale automated test and re-order model.
The picture was taken by Bloomberg/Getty.
Fast fashion is well known for its frequent replenishment of products, according to a professor at the University of Delaware. Shein is completely different. Lu found that the company offered more new items than H&M.
Amazon may have contributed to Shein's success. The e-commerce giant began aggressively recruiting manufacturers in the country to sell cheap products abroad on its third-party marketplace. As Chinese sellers joined the platform, western consumers were flooded with thousands of new brands selling basic goods, from kitchen supplies to electronics chargers, under unfamiliar names.
Amazon gave these factories the chance to cut out western middlemen and learn about the tastes of American shoppers. By 2020, 40% of Amazon's third-party sellers were based in China, and Amazon was able to undercut the prices of its competitors.
The partnership between Amazon and Chinese manufacturers soured. Amazon banned hundreds of Chinese merchants for allegedly using fake product reviews after customer complaints about counterfeits and dangerous products from China. Many of the sellers were unhappy with Amazon, which required them to abide by an ever-changing set of policies, and to pay hefty fees for services such as warehousing and order fulfilment.
The founder of an apparel company in China that sells on Amazon and AliExpress said the cost is very high. You have to replenish your Amazon storage from China, which is time-Consuming, if your storage is out of stock.
Shein was able to recruit many of them to supply its own platform because of the rising frustration with Amazon among Chinese sellers. Shein joined it in order to compete with Amazon. Some of the company's products have become bestsellers on Amazon.
According to Allison Malmsten, a China market analyst at Daxue consulting in Hong Kong, Amazon created the habit of online shopping for Americans. Shein decided to make it better.
Shein grew by bringing China's gamified e- commerce market to the rest of the world. Online shopping in the country has evolved into a form of entertainment, featuring livestreamers, flash sales and pop-ups that compel consumers to scroll through the newest products. Taobao, a Chinese e- commerce platform owned by Alibaba, helped pioneer interactive features such as custom product recommendations and built a miniature social network into its app. Shein has a points system that rewards shoppers for making purchases, as well as leaving reviews and playing mini games.
Shein has learned a lot from Chinese companies. She said that the style of shopping that she brought to the west works with Gen Z.
Major Chinese tech giants and newer startups are trying to copy the company after watching it rise. ByteDance and Alibaba are both working on e- commerce platforms that target the same international demographic as Shein. The Hong Kong-based e-commerce clothing brand is backed by the Silicon Valley venture capital firm. The firm described Cider as a market place of global factories that makes it possible for users to have more selection than a store like IndiGo.
Lin Zhen is the head of the largest organisation of Amazon sellers in Fujian, one of China's main garment- producing provinces. He has been selling clothing to consumers in Europe and North America since 2011. Lin told Rest of World that his clothing company, OCS, earns nearly $100m in annual overseas sales. About half of this year's revenue came from Amazon, a third from the company's website, and the rest came from other businesses, including Shein.
OCS was one of the top sellers of dresses on the AliExpress platform for markets outside China. Lin said that the company required him to produce a certain number of different styles every month and deliver them in as little as 10 days. He said the requirements are high.
Suppliers that already have a range of production capabilities and function more like factories have an easier time working with the company.
Lin said that shein has made a difference for Chinese apparel sellers. The company has a long-term vision that includesmeticulous supply chain management, which is why it has been able to endure a number of challenges.
Shein has internal software that connects its entire business from design to delivery. Lin said that everything is made better with big data. Suppliers of Shein get their own account on the platform. If you see the current sales, it will tell you to stock up more if you sell well and what to do if you don't. It is all there.
Simple design specifications are contained in the software. A big brand might need a very high-end designer, or a designer with top technology, and even then may only be able to produce 20 or 30 styles a month. Shein doesn't have high design requirements. It is possible that a typical university student could start designing quickly.
There are clothes in the desert. Martin Bernetti is pictured.
Shein invests heavily in training, technology and IT support to help its suppliers become more efficient and profitable, but it wasn't saying much about the software.
Fast fashion has been embodied by European brands such as H&M, which shortens the route from runway to shop window from months to weeks. Shein often knocks off items seen on TikTok andinstagram where hype cycles move faster. Shein asks for less than 100 products in 10 days, which is less than the minimum order of 2,000 items required by Zara. Lu said that they want factories to be more flexible.
The Chinese media site Sixth Tone reported that the pressure to produce clothes more quickly ends up falling on Chinese garment workers, who sew products for Shein during long shifts in poorly regulated workshops. In China, working overtime is a certainty, according to a knitting machine operator at a factory in the city of Zhejiang.
A worker who asked to remain anonymous said that the manufacturing industry in China has a lot of employees working overtime. It is not possible to work from nine to five. The factory where they work makes clothes for other foreign brands and sells them on AliExpress.
Shein said the company takes supply chain matters seriously and is committed to high labour standards. If it discovers that a supplier isn't adhering to its code of conduct, it will take immediate action.
Shein has a software-driven model that allows it to remain at arm's length from the labour force. It is possible to avoid directly managing inventory for almost any of the products it sells.
Shein had to pay suppliers on time to convince them to join its system. According to the market analyst, receiving timely payments is a huge problem for factories in China. She said that they have built a lot of loyalty from their suppliers. More than 70% of the products on Shein's website were listed less than three months ago, compared with 40% at H&M. She said that she blew out of the water.
There is a downside to Shein working with so many different factories at the same time, that similar products are popping up all over the internet. Consumers have complained on social media about seeing the same clothes on different sites at different prices, because some suppliers such as Lin sell through multiple channels. The duplicated products are often brandless basics, such as T-shirts, or imitations of items from independent labels and major fashion houses. Consumers are wary of being tricked into paying more than they should because they don't seem exclusive or unique.
People are sharing tips on how to find identical-looking clothes for half the price and how to buy a convincing "dupe" of this season's hottest designer handbag. When a crop top from Amazon went viral, TikTok users pointed out that it was available for only $13 on Shein and as low as $3.83 on AliExpress.
The forums are the result of online shopping that has made international consumers more aware of Chinese companies. Many people assume that similar items came from the same factories because they know the majority of what they buy is from China.
Rest of World conducted test buys that suggested that the truth is more complicated. In September of 2021, Rest of World ordered five clothing pieces from different shopping sites, and what looked like imitations of the same products on AliExpress. Most of the items were not carbon copies. This shows that China's apparel factories are very good at mimicking one another and adapting to the same trends as their suppliers.
Lu said that many companies are using data to forecast what they should produce. If you use the same data inputs and the same algorithm, the outcome may be very similar.
He said that it was not the fashion guys that were designing clothing at Shein. It is engineers. Engineers are looking at data.
There are garment workers in China. Agence France-Presse
Two sweater vests, both marketed using Julia King's Depop photo, were among the test buys. The colors were different when constructed in the same way. There were subtle differences between the two cherry-print cardigans. The material and stitching of the jeans differed. A pair of yellow platform shoes from Shop-Pche, a clothing brand with a website that says it was founded in New York, were indistinguishable from the ones on AliExpress.
A company is set apart by its marketing in an environment where the competition can quickly copy your products. Shein has invested a lot of money into advertising campaigns on Facebook and on its own social-media reality show. Cooper Smith, an e-commerce and fashion industry analyst who worked as the head of Amazon intelligence, said that they are spending truckloads of money trying to capture consumers who are searching for products.
In August, Shein had 150 million visitors, 40% of whom came via search, compared with 4% of Zara's, according to Similarweb. The company has partnerships with a lot of people on social media, including micro-celebrities, fashion bloggers, and reality show contestants, who show off deliveries of trendy clothes in "haul" videos. Shein's app was banned in India last year, but the company was working with thousands of people in that country before that.
The Shein model is a new norm. Is it a norm that the clothing industry wants? The company has become a poster child for the fast-fashion sector, which has become notorious for making goods with hazardous chemicals that end up in landfills and oceans. Shein appointed a global head of environmental and social governance in November, and the company told Rest of World that it has put in place water and waste management systems within its supply chain.
It is not known how long ultra-fast-fashion's environmental impact can be ignored. Several experts are concerned about the model's long-term prospects. Do we really need more companies like Shein? Lu wondered if this was really an exciting business model to celebrate.
New and well resourced rivals are following closely. In October, shein learned that she could use AllyLikes to shop in North America and Europe. It looks like a mirror image of Shein, except with far fewer items for sale and a small number of reviews.
The founder of the investment consulting firm Tech Buzz China and a columnist for Rest of World said that it was not clear how much of the existing e- commerce expertise would be prioritised for the project. ByteDance is hiring for dozens of jobs related to international e- commerce, and a bunch of other Chinese firms are trying to claim their own slice of the market.
The activity suggests that the cycle of ultra-fast-fashion will only keep going if consumers continue to buy into micro-trends and discard them.
Elizabeth Shobert, the director of marketing and digital strategy at StyleSage, said that they are already in a race to the cheapest product. Where does this end?
The article was published on Rest of World.
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