Shein Is Valued At $100 Billion, But We Need To Talk About Who Really Pays The Price
Despite unsafe working conditions and a massive environmental footprint, the brand still earned more than $20 billion in revenue last year.
Chinese e-commerce juggernaut Shein has been valued at a mind-blowing $US100 billion (yes, BILLION), but given its devastating environmental and social impacts, you have to ask: who is really paying the price?
As first reported by Bloomberg, the fashion giant most well known for dirt-cheap clothing is seeking to raise $1 billion in funding, based on a staggering $100 billion valuation (roughly $131 billion AUD). If it actually achieved the $100 billion valuation, Shein would be the third most valuable startup in the world, beaten only by ByteDance (TikTok’s parent company) and SpaceX.
The company’s huge profitability is hardly surprising considering it is a staple among Gen Z’s fast fashion community — particularly on TikTok — who are happy to compromise on quality and ethics for the sake of extremely low prices.
But this valuation is particularly problematic considering the company’s long and documented history of poor working conditions and an awful environmental impact.
According to Shein’s first Sustainability and Social Impact Report, released in February 2022 for the 2021 calendar year, a vast majority of suppliers had risky working environments.
Out of 700 suppliers, 27 percent violated fire and emergency safety preparedness protocols, while 14 percent had working hours violations.
In a 2021 audit of suppliers factories and warehouses, just two percent scored 90 or above in a risk assessment, with 12 percent scoring below zero with major violations and safety risks.
Shein is notoriously private when it comes to working conditions, so it’s unclear if the company does pay a living wage to all workers, but as many as 1 percent of suppliers — between one and six factories — in the report were found to have used underage labour.
Shein reportedly also uses a piece rate pay system, which means workers are allegedly paid per piece of clothing they make, which is in direct violation of Chinese labour laws.
“There are many allegations of SHEIN’s labour practices suggesting the brand is likely to be contracting with manufacturers that may be grossly exploiting, overworking, and underpaying their garment workers,” said Kristian Hardiman, head of rating at Good On You.
Not to mention, Shein’s poor quality and the short lifespan of its products means it contributes a huge amount of waste to landfill.
According to tech journalists Meaghan Tobin and Louise Mataskis, who spent six months investigating the Shein phenomenon, the brand released between 2,000 and 10,000 new styles every day.
Despite its laundry list of social and environmental faux pas, Shein reportedly raked in more than $20 billion in revenue in 2021 alone.