Shein: a war between the good and the evil

 

I'm sure most of us have heard of one of the most famous digital clothing and accessories platform, Shein. Well, the opinions regarding of this company are divided. There is a part of the population that considers Shein to be an innovative company, with variety and affordable prices; while some others consider it to be one of the main causes of pollution and labor exploitation today; and finally, we have the group to which I belong to, who consider this company as a watershed in the world of fashion for its incredible logistics, accessibility, ease of purchase and more; but every time we place an order we get regret because we know that in a certain way we are supporting socially and environmentally unfavorable actions. 

So, having said this, we can now state that Shein is at a point where it can increase its success and maximize value for shareholders or fall to destruction due to its lack of morality and environmental awareness. It is our duty then to analyze what are the negative factors that directly affect the loss of value and what this platform can do to find itself in a place with lower risk in such a competitive market.

Let's start with the least unfavorable scenario since, for some reason, I have always preferred the "good news first". Shein's headquarters is suspectedly located in the Cayman Islands, worldwide known for being a tax paradise which means that, of the 24,000 million euros they obtained as sales revenue in 2022, they only paid a tiny amount corresponding to their other headquarters in Ireland and Singapore. But that's not all, surprisingly this is one of the topics that worry me less. Let us now analyze the two problems that I consider most serious: the labor exploitation of thousands of people and the ecological damage that the operations of this company demand.

Well, according to an article in the newspaper El Vanguardista, in 2022 an investigation was carried out in Guangzhou (a Chinese city) into the working conditions of the employees of those suppliers who work for Shein. The reports that were presented indicated that the work facilities are unsafe, there are no binding contracts between employer and worker, work hours reach 75 hours a week, and if that were not enough, the pay is incredibly low. When this information came to light, Shein's sales fell due to the concern of the world's population that they were supporting a business that violated labor laws and human rights. Likewise, the company's reputation was negatively impacted so shareholder value decreased as did its income.

In addition to this, Greenpeace carried out studies that allowed it to know that some garments contain chemical substances that exceed the regulatory limits of the European Union, which means a great risk to the health of consumers because we find elements such as Nickel or Chromium in blouses, dresses and sneakers. Curiously, these materials persist in the environment, which means that their decomposition over time will be practically nil, causing much more pollution and waste. Again, this would make us think that Shein would be increasing its chances of being totally "canceled" by its consumers. But in reality, I think we like to live in "high risk mode".

Of course, there are many other negative aspects regarding this company, such as the violation of copyright, the appropriation of unauthorized culture, the excessive use of plastics, among others. But as we saw previously, Shein's income is extraordinary. So, I ask myself, is it really worth having high income if from one moment to the next our bad actions can lead our company and the world to perdition? In my opinion, this brand should sacrifice some of that income to increase salaries, improve its plants, create contracts, use good materials and in general, have a better impact on society and the environment.

Without a doubt, a company cannot eradicate its problems immediately, but it can make an effort to start working on certain problems and over time. In the case of Shein, these actions would show positive results for their stakeholders, community, shareholders, and basically for the whole world. It´s time to prioritize wellbeing rather than money.

 

Sources: 

• https://www.eleconomista.es/retail-consumo/noticias/12114057/01/23/La-china-Shein-crece-un-50-y-planta-cara-desde-el-paraiso-fiscal-de-Islas-Caiman-a-Inditex-y-HM.html
• https://www.lavanguardia.com/vida/junior-report/20221025/8579264/shein-duras-condiciones-trabajo-detras-marca-exito.html