by How much should a fresh summer wardrobe cost in 2024? Well, with sky-high running costs forcing fashion retailers to raise prices on the high street, a handful of T-shirts, shorts and swimwear could easily set you back £100 or more.
But on Shein, the same order can be delivered straight to your door for as little as £50.
The Chinese fast-food giant is preparing to float on the London Stock Exchange in a £50 billion deal that would be its first stake in more than a decade.
Reports suggest the online retailer is preparing to file registration documents with the Financial Conduct Authority ahead of a listing this year, although sources close to the company have played down speculation that Shein will enter the market soon.
The news was welcomed by the Labor Party, which last week confirmed its MPs had met with the retailer, among “a range of companies including Shein looking to invest in Britain”.
It’s not the first time the company has set its sights on these shores: this year the fashion giant hired former PrettyLittleThing buying director Gemma Dunne, tasking her with building a new brand inspired by UK trends.
So far she has created the Musera clothing line – which includes bikinis for £4.99 and loose trousers for £11.49.
Shein’s meteoric rise could be great for anyone over the age of 40, as the brand is almost entirely the preserve of Gen Z and young millennials. Whether the retailer is profitable is unknown, but even within the wider context of fast fashion, its success has been remarkable as other brands visibly struggle to stay afloat.
It was reported in May that UK-based Boohoo had shed £95m of debt, cutting around 1,000 jobs across its stores and administration, while ASOS admitted sales had fallen 18 per cent year-on-year for the first six months to the year. March 3, contributing to an underlying pre-tax loss of £120 million, up from £87.4 million the previous year.
Meanwhile, Shein has gone from strength to strength: Google is the world’s biggest clothing brand and is set to overtake Zara with sales of more than £1.3 billion in Britain last year. Those low prices are central to its appeal – a quick look at the men’s section throws up T-shirts and tank tops for as low as £1.99, and shorts for £2.49.
How Shein manages to subdue her rivals as aggressively as she does without meeting a similar fate depends on who you ask. The company claims its smart supply chain efficiency allows it to cut costs, and critics have suggested Shein plays smart under international tax laws.
Even measured against its competitors, Shein has zigged where others have zagged. In the early stages of its rise, the company spent a lot on marketing, for example.
Traditional advertising was eschewed in favor of sending clothing packages to social media influencers.
The retailer typically targeted TikTok and Instagram users with a modest but enthusiastic following, who would then film “drag” videos where they quickly try on different outfits.
Shein does not operate traditional brick and mortar stores, which greatly reduces its overhead costs. The company operates a very different design process than other fashion retailers. Rather than creating designs in-house, and outsourcing production to manufacturers, Shein outsources most of its design work to external companies, and most of its clothing is designed and produced by independent suppliers.
The result is that Shein’s website lists thousands and thousands of new designs every day. Demands reach as high as 10,000, which is astronomical even by fast fashion standards.
Shein’s design pipeline is algorithmically driven, says a company source. Designs are suggested based on what customers are already looking for, then made in small “test” quantities. If an item sells well, Shein will order more, leaving behind less popular designs.
A company source says this is why some Shein orders will take up to three weeks to arrive, unlike the fast shipping times of other fashion brands such as ASOS or Boohoo.
As a result, Shein says the company wastes very little waste and claims this is the main factor in its low prices. “Having a rubbish summer means you’re not holding onto a load of white t-shirts when everyone wanted a black jumper,” says a company source.
However, the brand has been criticized for the allegedly poor working conditions in its factories. Later, Marco Rubio, the US senator in the race to be Donald Trump’s presidential running mate, sent a letter to the chancellor this week calling for an investigation ahead of Shein’s potential listing on the £50bn London stock market, accusing the company of “to use a slave. labor and sweatshops”.
A spokesperson said Shein has a “zero-tolerance coercion policy [sic] labour” and is “committed to providing a safe and fair working environment for employers of all our suppliers”.
This is not the first time that Shein has faced such criticism, and she has repeatedly had to deny accusations that the factory staff are overworked. Channel 4 documentary Untold: Inside the Shein Machine, alleged staff in one factory worked 13 and a half days with no fixed structure for days off. Shein vehemently denied allegations made in the documentary.
Experts have also noted Shein’s approach to international trade tax laws.
The company maintains that it “complies with tax laws in the regions in which it operates and is subject to the same tax regulations as industry peers”, but those peers have nevertheless accused Shein of exploiting loopholes.
In May, a chorus of executives including Boohoo CEO John Lyttle said Shein had avoided import duties by sending parcels on his own (companies don’t have to pay tax on shipments worth less than £135).
Theo Paphitis, owner of Robert Dyas, Ryman, and the lingerie brand Boux Avenue, said that a “large swath” of foreign companies were avoiding shipping tax by shipping orders directly from China.
“The government is not filling loopholes,” he said. “It is becoming completely clear that the emperor has no clothes.”
The Treasury said that reducing its customs and tax regime for low-value imports “reduces burdens for retail businesses and consumers buying goods from overseas and reduces the tax playing field for British businesses.”
Meanwhile, Shein consistently argues that its low prices are due to “supply chain efficiencies and operational efficiencies” cultivated over the years.
So far, Shein’s rise shows no sign of slowing down. That much is clear on TikTok, where nearly a million videos have been posted under the hashtag #sheinhaul, each showing a young woman zipping through hundreds and hundreds of outfits.
In one clip, a TikToker named Abigail can barely hold her draw in both hands.
Examining the comments reveals that there is something surreal about lighting – that Gen Z is more than happy to put their usual sustainability concerns aside for a pair of bright red trousers.
