Shein Took Over Fast Fashion. Then Came the Backlash. – The Journal. – WSJ Podcasts – The Wall Street Journal

Fashion

WSJ’s Fashion Director Rory Satran explains how Shein, now valued at $100 billion, used social media to dominate the fast-fashion industry, and why it’s now facing intense criticism from sustainable shoppers.

Further reading:
Shein’s Rise Was Nearly Overnight. The Backlash Came Just as Fast 
China’s Fast-Fashion Giant Shein Faces Dozens of Lawsuits Alleging Design Theft 
How Shein Became the Chinese Apparel Maker American Teens Love 

This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.
Ryan Knutson: If you like watching fashion videos on TikTok, there's one company that probably shows up in your feed all the time. It's called Shein.
Speaker 2: My Shein order is here.
Speaker 3: Y'all the Shein package that I was waiting for arrived.
Speaker 4: Back with another Shein package.
Ryan Knutson: Shein is a Chinese clothing company. And over the past few years, people have been posting videos on social media of what's known as a Shein haul.
Speaker 2: Shein haul.
Ryan Knutson: These videos are really simple. It's usually just one person showing off everything they bought on Shein.
Speaker 3: Okay, next is just this top. I feel like a princess.
Speaker 5: Excuse me. (foreign language) super cool (foreign language) top.
Speaker 6: This is so cute.
Ryan Knutson: The company's clothes are so cheap that people buy dozens of items at a time.
Speaker 2: Nice. There is so much stuff.
Speaker 6: First, I got this top. This is so cute.
Speaker 7: Then I got this top.
Speaker 6: I'm obsessed.
Speaker 7: And I got this top.
Ryan Knutson: Videos tagged Shein haul have about 6 billion views on TikTok. And thanks in part to these haul videos, Shein has become one of the most valuable companies in fashion. But our colleague Rory Satran says there's a new trend that's starting to emerge, one that criticizes Shein, because the very thing that makes it popular, might also make it bad for the environment.
Rory Satran: I would say about a year ago, I started seeing as many critiques of Shein as I was seeing haul videos. So for every effusive, enthusiastic, haul video, I was seeing another video where someone was taking down Shein and talking about why it was bad. Everything that Shein stands for is really against what a lot of Gen Z sustainability advocates are fighting for.
Ryan Knutson: Welcome to The Journal, our show about money, business, and power. I'm Ryan Knutson. It's Friday, July 22nd. Coming up on the show, TikTok users helped make Shein the king of fast fashion. But now some of them are trying to tear it down. Our colleague Rory writes a weekly fashion column called Off Brand and she has a title that you don't often see at a newspaper, Fashion Director. So as the Fashion Director, does that mean that you are always wearing like the most stylish clothes?
Rory Satran: Yes. Like right now, I'm wearing jean shorts. Jorts.
Ryan Knutson: Jorts, does that mean, are they back in style now?
Rory Satran: No, it doesn't mean they're back in style. It just means it's really hot.
Ryan Knutson: As Fashion Director, Rory spends a lot of time on fashion TikTok. And over the past few years, there's one company that's been dominating her feed, Shein. Where did Shein come from? Like what's the history of this company?
Rory Satran: So Shein was started in 2008. One of its early URLs was sheinside.com, which is Shein is an abbreviation of that. I'm not sure what She Inside means, but when it was She Inside, it was mostly wedding dresses. And then it kind of branched out.
Ryan Knutson: In 2015, She Inside shortened its name to just Shein. And shortly after it started branding its own clothing. Shein is a fast fashion company, kind of like Zara or H&M, but on steroids. It's constantly pumping out cheap stylish clothes.
Rory Satran: They have kind of turbocharged the Zara model where they're looking to trends, they're looking at what consumers are interested in, and they're making it more quickly than anyone ever would've thought possible before.
Ryan Knutson: Shein doesn't rely on retail stores. It's almost entirely online and it offers a seemingly endless range of new products. On Shein's website, a search for something like a green women's top, for example, can yield hundreds of results. And all those clothes are incredibly inexpensive. A lot of its garments are as cheap as $2. And accessories can cost pennies. I mean, I'm just scrolling through the jeans section and they're selling men's jeans for $28 and a lot of really fashionable looking jorts with lots of holes in them for $24.
Rory Satran: Yeah. And $28 is actually super expensive for Shein. So that's probably at the top end of their quality spectrum.
Ryan Knutson: Hmm.
Rory Satran: But yeah, you can find clothing on Shein for less than $5, for less than $3. It's extremely cheap,
Ryan Knutson: But it wasn't just cheap clothes that made Shein so popular. The company also promoted itself aggressively on social media.
Rory Satran: I think that Shein was one of the first companies to really see the potential for TikTok. So they have their own TikTok, which they actively post to. They were gifting influencers Shein product, so they have been kind of stoking the haul video behavior. So they would give gift cards to influencers. They would give gift cards to young people that actually didn't have huge followings and then they would have this $500 gift card, with which of course they would do a haul video.
Ryan Knutson: Shein didn't just use TikTok to promote itself. It also used it to come up with ideas for what kinds of clothes to make.
Rory Satran: On Shein, they're able to copy these styles really, really quickly. So what I see is styles that look very close to like the Balenciaga looks that Kim Kardashian wears that go for thousands of dollars that you can have for $10 or $20.
Ryan Knutson: And it's not just celebrities that Shein is looking at for inspiration.
Rory Satran: More often than not the trend cycle is coming from TikTok. So I think they're really looking at what young people search. One recent example would be like Juicy Couture tracksuits, right? If Shein notices that's bubbling up on TikTok and then people begin searching for Juicy Couture sweatsuit, or velour sweatsuit, within Shein then they're able to produce more and be kind of responsive to the trend cycle. But, in theory, they can take any trend, see what people are searching for, and then produce it really within a matter of days.
Ryan Knutson: So these clothes are very trendy and very cheap, but what's the quality like?
Rory Satran: With clothing this affordable, there are definitely going to be some trade offs. So the quality is poor. You're paying for the trendiness. And that's what people are buying into when they buy Shein clothing. They're not buying a dress that they want to wear in five, 10 years. They're buying a dress that fits in with the current trend cycle and checks some boxes in terms of a trend they want to follow.
Ryan Knutson: Even though the quality isn't great, Shein's customers say that the prices are hard to resist. One of those customers was Ava Grand.
Ava Grand: Hi, I'm Ava Grand. And I just graduated from Marist College. I studied fashion design and I had a minor in product development and merchandising.
Ryan Knutson: Ava remembers one of the first times she bought from Shein, a couple of years ago. She and a bunch of her friends placed this giant group order.
Ava Grand: It was so much so like picking out, "Okay, who ordered this? Who ordered that? What are we doing with this? Do you guys like this?" It was a free for all. Just like, "Oh, it's $3. Just throw it. Who cares? Do you guys want this? Do you want that?"
Ryan Knutson: Was it exciting a little bit to be like, "Oh my gosh, look at all these clothes I could get for so cheap?"
Ava Grand: Yeah, I can't deny that it's like, "Oh my God, I can't wait to try this on."
Ryan Knutson: But something about the order really struck Ava and it wasn't any of the clothing. It was the packaging that it all came in. Each piece of clothing was wrapped individually, in its own plastic bag, and the bags were thick and sturdy, with this little plastic zipper on top. And as she and her friends dug through their haul, ripping the packaging and trying on clothes, the plastic bags kept piling up on the floor.
Ava Grand: The thing that stuck out the most with me with Shein is that it was one bag per item, not per order, which is crazy to me, because nothing is going to happen to this garment with one bag. It doesn't need the 10 bags that it comes with within one order or more.
Ryan Knutson: And as Shein became more popular, Ava started encountering a lot of haul videos on TikTok.
Ava Grand: That's sort of when it clicked for me, I'm like, "Oh my gosh. If it's just one person," and then the whole point of that video is for other people to do it.
Ryan Knutson: Ava started to get concerned about Shein's impact on the environment and she wasn't alone. Soon, thousands of people on TikTok started turning on Shein. That's next. During the pandemic, Shein blew up in popularity. But the backlash came almost just as fast. Here's our colleague Rory again.
Rory Satran: So I would say really within the past year is when TikTokkers who are concerned with sustainability have started kind of speaking out against Shein.
Ryan Knutson: Haul videos were still going viral, but influencers are starting to get pushback.
Rory Satran: I would say the majority of commenters are saying, "Shein is not a company that young people support. Their sustainability practices are reprehensible. We expected more from you."
Ryan Knutson: So instead of haul videos, people started making videos criticizing Shein.
Speaker 10: We need to have a talk about Shein and everything that's wrong with them.
Speaker 11: Shein is one of the worst because the prices are so cheap that people over consume and view their clothes as disposable.
Speaker 12: Shein, you need to do better. You have officially lost me as a customer. Please do not shop from here, people.
Rory Satran: They're questioning how can a $3 dress come from a company that supports fair wages, that has good labor practices. And then there's a lot of issues with the packaging. So every single garment comes in its own separate plastic bag. These are things that young people care about.
Ryan Knutson: Young people like Ava Grand, the fashion graduate. She was especially concerned about Shein's bags. So for her senior thesis, Ava decided to make a whole line of clothes using Shein bags as the fabric. But because she doesn't shop there much, she didn't have enough bags. So she asked TikTok for help.
Ava Grand: People of TikTok, I'm asking you guys to send me all of your wasted packaging from Shein and all the other places so I can make sustainable clothing like jackets and bags and stuff like that. But I'm running out of bags. So I really need your help.
Ryan Knutson: She didn't think she'd get much response.
Ava Grand: I thought it was going to be like five people. So I was thinking just close friends or friends of friends.
Ryan Knutson: But her video went viral and tons of people started reaching out.
Ava Grand: They were like, "Where can I send them? Oh my God, I have so many of these bags. Oh my God, girl, let me send you my haul" And at first I was like, "Whoa, people."
Ryan Knutson: How did that make you feel to get that kind of reaction?
Ava Grand: Not only was I thinking that I cared about the waste build up, other people cared. So that was definitely a very heartwarming experience for sure.
Ryan Knutson: Pretty soon Ava had more than enough bags to complete her project.
Ava Grand: So I've made a bomber jacket, a vest, two skirts, a pullover, like poncho, accordion top.
Ryan Knutson: How did it look?
Ava Grand: I thought it came out amazing. It was definitely such a beautiful thing to come together. I never would think that I can make clothing out of this plastic.
Ryan Knutson: Ava's line of plastic bag fashion has taken off. Last month the line went on the red carpet, the Tribeca Film Festival, and she's still making clothes out of Shein bags and posting them on TikTok.
Rory Satran: All of her videos go insanely viral. I think she really touched a nerve about what a lot of young people were feeling, which is, "Shein is fun. I buy it. Maybe I'm going to keep buying it, but I really feel guilty about this level of waste. And isn't there something we can do about it?"
Ryan Knutson: Late last year, Shein hired an executive named Adam Winston to oversee the company's environmental and sustainability efforts. Recently he spoke at a fashion sustainability conference and said the company is actually more sustainable than people think.
Adam Winston: We have received a considerable amount of criticism on our business model. And I think that's largely because people don't really understand it. And in reality, Shein takes a unique approach that's enabled us to be a more innovative company from a sustainability perspective from our founding.
Ryan Knutson: Winston said that even though Shein offers a lot of products online, it only actually makes the things that people order.
Adam Winston: We don't have merchants or business planners that try to predict the demand. Our customers do that for us. They tell us what to produce and how much to produce. So traditional forecasting practices, which most of the industry engages in, basically ensures that retailers either over produce or under produce. And overproduction results in sitting on costly unsold inventory that eventually goes to waste. And underproduction results in lost sales.
Ryan Knutson: Shein recently announced that it was putting $50 million toward a fund that aims to address textile waste. And the company said it's actively exploring packaging alternatives. Shein isn't just getting criticized for sustainability reasons though. The company has also been getting sued by designers and brands who accuse Shein of copying. And labor rights activists say that Shein's business strategies create poor working conditions and low pay for suppliers. In a statement, the company said it takes infringement claims seriously, and that it requires suppliers to certify that their products don't infringe on third party intellectual property. And it said that it's business model allows it to charge customers less and pay suppliers more. As for Ava, the fashion school grad. Do you think you'll ever buy anything from Shein again?
Ava Grand: I want to say no. Yeah, no. It's just not a sustainable company and I do not believe that they can do good for anything. So, no.
Ryan Knutson: Have you changed the minds of any of your friends that you used to buy Shein clothes with?
Ava Grand: Oh my gosh, yes. People, whenever I'm out or I'm out, they're like, "Don't look at me. I'm wearing Shein." Like, "Oh my God, the Shein girl's coming. Watch out." So I think that it's definitely awareness. You have to just start with being aware. And then from then on you're subconsciously going to say like, "This isn't good or should I stop doing this?" And I think it's going to be a slow process of realizing where the change can occur. And then from there it'll just only hopefully go up.
Ryan Knutson: Our colleague Rory says that all this criticism doesn't seem to be slowing Shein down. This spring, investors value the company at $100 billion, more than Zara and H&M combined. So it seems like there is a clash between two trends happening here. One is the desire for cheap, stylish, trendy clothes. And the other is a desire for sustainability. Which of those two trends do you think is going to win out here?
Rory Satran: I mean, I think the cynical answer is that the desire for cheap, trendy, clothes is going to win out. Yes, it feels good to buy new things. Yes, it feels good to shop. But then what? Do you save the garments? Do you throw them out? And a lot of videos show the sort of aftermath, which is you're literally throwing out the clothing. And this is where kind of the real paradox of Shein is, is that in study after study Gen Z says that sustainability is at the top of their list for what guides their purchasing decisions. And yet they continue to buy Shein. Shein shows no sign of diminishing. It grows every month.
Ryan Knutson: That's all for today, Friday, July 22nd. Additional reporting in this episode by Dan Strumpf, Eva Xiao, and Trefor Moss. Special thanks to The Sourcing Journal for audio from its sustainability conference. The Journal is a co-production of Gimlet and The Wall Street Journal. Your hosts are Kate Linebaugh, and me, Ryan Knutson. The show is produced by Melvis Acosta Chrishostomo, Annie Baxter, Katherine Brewer, Pia Gadkari, Rachel Humphreys, Brendan Klinkenberg, Matt Kwong, Annie Minoff, Laura Morris, Kim Nederveen-Pieterse, Afeef Nessouli, Enrique Perez de la Rosa, Sarah Platt, Aaron Randall, Alan Rodriguez Espinoza, Vladislav Sadiq, Pierce Singgih, Catherine Whelan, and Victoria Whitley-Berry. Our engineers are Griffin Tanner and Nathan Singhapok, with help from Peter Leonard. Our theme music is by So Wiley. Additional music this week from So Wiley, Emma Munger, Peter Leonard, Bobby Lord, Katherine Anderson, Billy Libby, Nathan Singhapok, Marcus Bagala, and Blue Dot Sessions. Fact checking by Nicole Pasulka Thanks for listening. See you Monday.
Kate Linebaugh is the co-host of The Journal. She has worked at The Wall Street Journal for 15 years, most recently as the deputy U.S. news coverage chief. Kate started at the Journal in Hong Kong, stopping in Detroit and coming to New York in 2011. As a reporter, she covered everything from post-9/11 Afghanistan to the 2004 Asian tsunami, from Toyota’s sudden acceleration recall to General Electric. She holds a bachelor degree from the University of Michigan in Ann Arbor and went back to campus in 2007 for a Knight-Wallace fellowship.
Ryan Knutson is the co-host of The Journal. Previously, he spent more than four years in the newsroom covering the wireless industry, and was responsible for a string of scoops including Verizon’s $130 billion buyout of Vodafone’s stake in their joint venture, Sprint and T-Mobile’s never ending courtship and a hack of the 911 emergency system that spread virally on Twitter. He was also a regular author of A-heds, including one about millennials discovering TV antennas. Previously, he reported for ProPublica, PBS Frontline and OPB, the NPR affiliate station in Portland, Ore. He grew up in Beaverton, Ore. and graduated from the University of Oregon.

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