Shein’s charm offensive is off to a rocky start
China Report is MIT Technology Review's newsletter about technology developments in China.Sign upto receive it in your inbox every Tuesday.
Shein is launching a charm offensive. The once-obscure Chinese fast-fashion website has become increasingly mainstream. And to respond to accusations of terrible labor conditions, the company is now inviting US influencers to its operations in China.
Have you shopped on Shein? I have, a few times, and I'm not really proud of it. Apart from the universal sin of fast fashion-the overproduction and overconsumption of disposable clothes-Shein in particular has been accused of working with sweatshops, copying indie designs, and even sourcing cotton from government forced-labor programs in Xinjiang.
Until recently, the company has been known for its secrecy. Shein executives seldom talked to any media, in China or in the West. But in June, Shein invited six US fashion and beauty influencers to visit China and tour its facilities. They have varying numbers of followers, ranging from as few as 30,000 to over 1 million.
Where did these influencers go? According to social media posts, they went to an unnamed supplier factory, a Shein innovation center" in Guangzhou, and a distribution center in the nearby city of Zhaoqing.
Throughout the trip, at least according to the videos shared and the captions, the influencers were wowed with the clean and modern factory, the robot-filled assembly line, and the honest" conversations they had with workers there.
I expected this facility to be so filled with people just slaving away, but I was actually pleasantly surprised that a lot of these things were robotic. Honestly, everybody was just working like normal, like chill, sitting down. They weren't even sweating," Destene Sudduth, one of the influencers invited, said in a TikTok video.
But if the influencers were impressed, other social media users clearly weren't. After the news got out last week, some mocked the influencers and suggested they were being led on by Shein-saying the company was showing them a model factory that didn't accurately reflect typical conditions. The backlash grew so big that many of the influencers deleted their posts.
It's no surprise that Shein is working with influencers to burnish its image. The company is facing immense opportunities and risks at the same time. Shein has been talking about going public for a long time now. (It is currently valued at $66 billion, an impressive amount but down from a peak of $100 billion last year.)
At the same time, Shein is increasingly affected by geopolitical volatility. There's an anonymously funded lobbying coalition in the US called Shut Down SHEIN" that's currently talking to politicians in Washington, DC. Political groups, mostly conservative-leaning, have started to see Shein as the next national security threat after TikTok for the vast amount of user data it could access. Even the US importation policy that Shein relies on to keep its prices low-no duty tax for international packages valued under $800-is currently being questioned.
Just this month, it was reported that Shein had started hiring Washington lobbying firms for the first time. But the company was also betting on word-of-mouth marketing. This worked for the company in the past: in its early days, Shein sent free clothes to micro-influencers in the West in exchange for exposure, a grassroots effort that slowly led to an avid following.
Shein was probably hoping this same strategy would work again, only this time instead of free clothes and accessories, it was offering a trip to China and its factories.
But easier said than done: Shein's business model makes it hard to prove that all its manufacturing suppliers meet the same requirements. To build an incredibly capable and responsive supply chain, Shein works with hundreds of small to large textile manufacturers in southern China. Some of those factories also outsource their orders to smaller workshops. Each supplier may be responsible for only a few items sold by the brand.
Some of Shein's factories probably are clean, highly automated facilities that pay good wages, just like the one it showed those influencers. But that doesn't speak for the entire supply chain. Plus, none of this publicity really addressed the accusation that Shein sources cotton from Xinjiang, where forced labor has been documented. That's a much more sensitive topic and a charge that will be even harder for Shein to disprove.
In the meantime, perhaps this incident will make Shein realize that influencers can't fix everything. The controversies aren't going away anytime soon, and the company will need to come up with better ways to be transparent about its operations if it really wants to (and can) refute the accusations.
Do you think Shein can fix its image? Let me know your thoughts at zeyi@technologyreview.com.
Catch up with China1. A respected Korean chip expert has been indicted for stealing Samsung's technology for a Chinese company. (Financial Times $)
2. Conservative US politicians want to crack down on the deluge of duty-free packages shipped from China. (Associated Press)
3. The unusually heavy rainfall in central China this year has ravaged wheat farms and threatened China's goals for food self-reliance. (New York Times $)
4. The cutthroat electric-vehicle price war in China is making life hard for all automakers. Nio, the Chinese company once seen as the Tesla killer," is having an especially bad time. (Wall Street Journal $)
5. The US Department of Justice is pursuing its first-ever prosecution of China's fentanyl supply chain. Four Chinese chemical companies and eight Chinese individuals have been charged for trafficking fentanyl ingredients. Two defendants have been arrested overseas. (NBC News)
6. Though there is no formal ban, many Chinese graphite exporters have stopped exporting to Sweden, where the mineral is used to produce lithium batteries. The reasons are both political and commercial. (The Economist $)
7. As China tightens its control of online speech, many disgruntled users found a new home in the Reddit group China_irl." (Rest of World)
Lost in translationThe era of fanatic online shopping festivals in China is coming to an end. Traditionally, all e-commerce websites in China participate in at least two shopping festivals every year, one in mid-June and the other in mid-November, when they compete to offer the lowest prices and achieve higher-than-ever total sales (It's like Cyber Monday in the US, only bigger and more frequent). This June, even though some platforms were supposed to have made their largest investment" ever in promoting the event, the festival felt much quieter than before. And none of the platforms released their total sales results.
Chinese publication Shenran Caijing talked to several young shoppers about why they quit the shopping bonanza this year. Some of them had started working in the advertising industry and saw with their own eyes how brands use these festivals to clear their excess stock; others were exhausted by the gamified promotion mechanisms that they needed to navigate for a meager discount. They feel that by shopping only when the need arises and going back to brick-and-mortar stores, they are regaining control of their consumption habits.
One more thingWe've all seen Twitter fights between people who spend too much time online, but what if it happens between two chatbots? This weekend, Truth GPT and LMAO GPT-set up by the same creator using ChatGPT to generate automatic snarky replies-got into a 42-tweet-long quarrel that's awkward and extremely petty (like arguing about whose metaphor is more outdated). I don't know if they enjoyed it, but the hundreds of human users watching it surely did.
- Lee1ng (@lilaoshizuikeai) June 25, 2023