Cheap clothes from online retailer Shein from less waste, not low wages: Firm’s sustainability chief

Fast fashion giant Shein has been in the spotlight for all the wrong reasons, including alleged labour law violations and the environmental impact of its operations.

It has been accused of paying workers too little to maintain the low prices of its clothes which are advertised heavily through social media ads and clothing haul videos.

However, the Chinese online brand’s global head of sustainability Adam Whinston attempted to debunk such claims in an interview with CNA podcast Climate Conversations, saying instead that the firm pays its workers an above-average wage and uses a model that reduces waste.

“The low prices that we offer do not come from paying workers less. In fact, quite the opposite,” he said.

“What we've found, from our own research into the manufacturers that are producing Shein garments (is) that these workers are being paid above the industry prevailing wage in the locale where that factory is located.”

He attributed the low prices to the reduction in waste instead.

“It's because we've eliminated a lot of the waste involved in the traditional model that our products are more affordable to our customers,” he said, pointing to getting rid of wasted related to overproduction, trimmings and transportation.

The lack of a physical footprint for the firm - which would have required thousands of stores around the world to amount to its size - also means that savings from overheads are passed on to customers, he said.

REDUCING WASTE

Shein cuts down on overproduction by having a better sense of demand from customers compared with the rest of the industry, said Mr Whinston.

He was speaking as part of a series of CNA interviews with sustainability chiefs of firms across various sectors, including coffee chain Starbucks and local bank DBS.

“Shein has, at its core, an on-demand business model, which has made it so successful, (and) that on-demand business model really allows it to reduce the waste that is so endemic in the industry,” he said.

The website displays a variety of clothing styles, but behind each of them is “only a very small amount of production”, Mr Whinston noted, adding that it is only when customers like a style that more of the same items are purchased, doing away with overproduction.

“Through our purchasing practices, we don't have to order tens of thousands, or hundreds of thousands of units upfront before we're even able to test the demand,” he said.

“We're able to order what we need, and we're able to respond to the demand of the customer in the quantities that they want. So in that respect, the company is very sustainable.” 

A common industry practice is to order large quantities, shared Mr Whinston. According to industry research, however, supply could be 30 to 40 per cent in excess of demand, he noted.

“That is a standard model for overproduction, and that's one that we categorically are able to avoid because of the technology that we utilise,” he said.

Addressing Shein’s association with cheap, disposable and wasteful fashion, Mr Whinston said “what's reported sometimes is not always what is the actual case”.

Data collected from surveys done with customers shows that they are not just using their fashion loot once or twice as sometimes claimed in the public domain, he said.

“In fact, the way our customers use our products is very different and they're using them dozens of times. And while that's still not enough, because I have clothes that I've worn, maybe 100 times or more … it's more than what is reported,” he said.

“I urge people to have an open mind about what they read and what they hear and seek out the full information before they make a conclusion.” 

SHEIN’S SUSTAINABILITY GOALS

Mr Whinston unpacked Shein’s goal of becoming a fully circular textile economy by 2050, which involves producing products made from preferred materials like recycled materials when possible.

For instance, the company aims to begin with 31 per cent of its polyester coming from recycled sources by 2030 and increase this amount nearer to 2050. Shein is also sourcing 100 per cent forest-safe viscose by 2025.

The firm is also using deadstock materials, which refers to materials that were overproduced by other brands and retailers.

“We're using that material in order to make products for shein for Shein’s customers, so that we don't have to create new fabrics, when we could just buy existing fabrics,” he said.

Another initiative that will be expanded is the company’s peer-to-peer marketplace called the Shein Exchange launched last year in the United States and has over 3 million customers.

BALANCING SUSTAINABILITY AND PROFITABILITY

Shein is also looking at reducing supply chain emissions by 25 per cent by increasing energy efficiency in the factories producing its garments, using renewables and bringing production closer to where customers live, like Turkey or Brazil.

However, the firm’s target falls short of the 45 per cent required of fashion industries to align with the Paris Agreement, a legally binding international treaty on climate change.

Addressing the difference between the two targets, Mr Whinston said: “Unlike many of our competitors, we're growing double digits every year and already, it's a challenge.

“The goal that we've set for ourselves of 25 per cent by 2030 will take a tremendous effort from the company from our supply chain, so we feel that what's most important is to set a goal that is aggressive, but attainable. And so once we reach that goal, we're committed to setting more aggressive goals in the future.”

Still, Mr Whinston said it is possible to fold in sustainability priorities with company profits over time, using technology. 

“These new technologies that we're seeing - whether it's chemical recycling, textile to textile recycling of polyester, or even cotton or viscose fibers - as the scale of those operations increases around the world, the capacity of those factories increases and the price comes down, those will be more accessible to customers who are more budget conscious,” he said.