Shein’s problems grow along with the information surrounding him.
The intention of the West, particularly the United States government, to ban cotton imports linked to forced labor and with Shein has found the obvious but also the flaw.
A survey conducted by Bloomberg revealed that the the clothes sent to the United States by the giant Shein were made with cotton from the Chinese region of Xinjiangaccused, according to several reports, including one from the United Nations, of forced labor for the Muslim minority Uighur.
More specifically, the point of sale made 2 purchases of products this year; subsequent analysis of their fibers in a laboratory revealed that they were made from cotton from the Xinjiang region of China.
The clothes were chosen from 60,000 items which came up during a search for “cotton” on the US retailer’s website. The isotope ratios of carbon, hydrogen, and oxygen matched the 2 samples within the range indicating a very likely origin from Xinjiang.
In fact, the problem is not new in the sector. In 2020, the H&M group communicated its decision to cut its commercial relations with suppliers who used cotton from xinjiang for the forced labor to which he was subjected.
The decision provoked a widespread boycott of the brand, but also of Nike or Inditex, the latter, in fact, was forced to remove a mention where it separated its production from the region.
Why TikTok is the battleground of the creative war between Zara and Shein: From normalizing counterfeits to breaking down information barriers
Statements from former detainees and reports from a number of investigators and advocacy groups have claimed that the Chinese government has incarcerated more than a million people in detention camps in the region.
The US State Department has called the actions against the Uyghur people “horrible abuses”. Considering this, federal authorities last year banned the importation of cotton and other products from the region. Europe, for its part, will follow a similar path.
A U.S. regulation banning cotton from Xinjiang went into effect in early 2021, and Congress extended the ban to all products — including solar panels and raw materials — from Xinjiang under the Prevention Law. of Uyghur Forced Labor (UFLPA) last December.
For its part, the European Commission proposed a ban on all imports made with forced labour.
These bans prompted retailers to be quick to show they weren’t sourcing cotton from Xinjiang, but Shein knows their situation is different.
The lagoon that Shein enjoys
The business model of Shein is to sell its products directly to its customers without intermediaries. For this reason, their individual shipments to the US market are, the media outlet explains, below a value threshold of $800.
About 2.7 million such packages arrive daily in the United States, a number that has nearly doubled since fiscal year 2021according to customs data.
Below this amount, there is no reporting requirement to US Customs and Border Protection. This means that they are not subject to the control that applies to bulk imports by retailers.
Shein, for his part, has not denied the test results of Bloomberg nor did he specify whether he was using cotton from Xinjiang. The fast fashion retailer said it was taking action in all of its markets “to ensure that we comply with local laws and regulations”.
Additionally, a “sustainability and social impact” report prepared by Shein in the United States highlights that the company conducts periodic audits to ensure a zero-tolerance policy towards “forced labor” and other environmental and social concerns.
However, for Shein, the position of the United States is a challenge.
On the one hand, acknowledging that its cotton comes from Xinjiang could alienate consumers, but denying it risks angering Beijing, where the Chinese government has vehemently denied the claims, saying there is no work. forced in Xinjiang, only job creation programs.
Official figures that reveal the origin of cotton
Simple math suggests that much of Xinjiang’s cotton has recently arrived in the United States, as the overwhelming majority of Chinese cotton comes from the region.
Last year, 87% of China’s cotton production came from Xinjiang, according to China’s National Bureau of Statistics.
Last year, US importers imported cotton products from China worth $8.4 billionjust over 8,200 million euros, including clothing, via the regular declared channels.
At the same time, the value of Chinese cotton imports to the United States increased by 125% compared to 2020 and imports of the same kind of cotton garments increased by 23% until August, compared to the same period one year. earlier.
In August and September, customs officers reported seizing, interdicting or detaining for further documentation 1,329 shipments of goods in the United States for a value of more than 425.5 million dollars (415 million euros). They did so “due to suspected use of forced labor,” including goods subject to the UFLPA.
Shein, an unknown giant
The company, founded in Nanjing in 2012, has developed a network of low-cost suppliers in southern China to become the world’s largest online fashion brand.
Shein has managed to become a giant in the fast fashion industry. So much so that its valuation in April rose to 100 billion dollars (about 95 billion euros), a figure that Inditex and H&M, its main rivals, cannot reach together.
Despite the fact that everything surrounding Shein is a mystery, unofficial estimates on its sales already speak of 16,000 million dollars -15,615 million euros- last year, and they are on track to reach the 24 billion dollars this year (23,423 to be changed into euros).
According to people familiar with the business, about a third of that figure comes from the United States. The Chinese retailer’s orders in the United States soared 568% in the first 2 years of the pandemic, through March 2022, according to data from Bloomberg.