In response to the rising competition from the Chinese-founded rival Shein, the largest publicly listed fast fashion company globally is expanding its budget-friendly Gen Z-oriented brand, Lefties. Inditex, the parent company of popular brands like Zara, is facing challenges from Shein’s rapid growth in the online marketplace, which operates without physical stores. This has prompted companies like Inditex and Sweden’s H&M to explore strategies to address the competitive pressure posed by Shein’s budget-friendly pricing.
Sheins booming business has raised concerns about its treatment of workers. The company is accused of exploiting teenagers hired as “micro-influencers” to promote its crop tops and bikinis on social media. A recent documentary called Untold: Inside the Shein Machine, broadcast on UK TV network Channel 4, alleges that the company uses a factory in Guangzhou to produce the clothes and pays workers as little as 3p per garment with deductions for mistakes during 18 hour shifts. Shein has denied the allegations and says it wants to improve its work conditions.
Shorter lead times mean that Shein can respond faster to trends than its competitors and is often the first to sell out of key items. It is also more likely to stock clothing that its customers want to buy right now — whether because of a specific season, a trend thats catching on or the popularity of a piece worn by a celebrity.
The move is likely to bolster Sheins sales, which rose 30% in the first three months of 2022, outperforming stalwarts like Inditexs Zara and Hennes & Mauritz (HNNSa.ST). Shein also dominates in the United States, where it accounted for more than a third of fast-fashion sales in the quarter, according to research firm Earnest Research.
But the fast pace at which Shein releases new styles is damaging for the planet, campaigners say. They argue that the production of one T-shirt takes 2,700 litres of water, enough to hydrate a person for two years. And 92 million tonnes of textile waste are produced each year, the equivalent of a truckload every second.
In the face of growing public concern about the impact of fast fashion on the environment, consumers are increasingly demanding ethical and sustainable clothing. This is putting pressure on fast-fashion brands to change their supply chains.
The shift to shorter lead times is a big change for the industry and it will be a tough challenge for Shein to keep up. But there are signs that its competitors may be following suit. For example, in April, British fashion retailer Topshop announced a new initiative called Reclaim and Recycle, aimed at making it easier for its customers to recycle their old clothes with the company. The move is the latest sign that some consumers are rejecting a throwaway culture, where clothes are shipped half way around the world before being discarded after a few wears. And it may be a sign that the days of hyper-fast fashion are numbered. As the market for secondhand clothes grows, fast-fashion chains are finding new ways to give them a longer life.