ESG Is So Hot Right Now
Bloomberg Businessweek US|July 18, 2022
The fast-fashion business model of Shein, a top global startup, is also its biggest threat
By James E. Ellis
ESG Is So Hot Right Now

Like many Shein customers, Jaleesa King doesn't expect the Chinese fast-fashion giant's clothes to last longer than it takes to post a good selfie on Instagram. The 26-year-old reckons she spends as much as $500 twice a month on about 20 to 30 clothing items she'll barely wear. Maybe just once or twice, that's all, she says, laughing, as she browses Shein's San Francisco pop-up shop, a special marketing event for the usually online-only retailer. If I can get a good picture, definitely at least once.

Turbocharging fast fashion's business model has turned Shein into the face of the industry and one of the world's top startups. But as environmental, social, and governance issues become important to investors, the retailer's embrace of disposable fashion may become the biggest threat to its future. A vast network of contract manufacturers allows Shein to pump out thousands of youth-friendly styles daily at barely believable prices-a few dollars for a dress and even less for a pair of bike shorts.

With sales of at least $16 billion in 2021, up from $10 billion in 2020, and a valuation of about $100 billion, the company has catapulted into the same league as Elon Musk's SpaceX and TikTok parent ByteDance Ltd. But Shein's business model is also the source of a potentially toxic image problem that's sparked allegations of environmental damage, worker exploitation, and copyright theft. Indiana University, which announced a Shein partnership just months ago, has put new plans on hold as a result of concerns about the company. While many of its young customers don't seem to care, the people and institutions with real power over Shein's future-investors, regulators, and politicians have little choice but to pay attention.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MORE STORIES FROM BLOOMBERG BUSINESSWEEK USView all
Instagram's Founders Say It's Time for a New Social App
Bloomberg Businessweek US

Instagram's Founders Say It's Time for a New Social App

The rise of AI and the fall of Twitter could create opportunities for upstarts

time-read
4 mins  |
March 13, 2023
Running in Circles
Bloomberg Businessweek US

Running in Circles

A subscription running shoe program aims to fight footwear waste

time-read
3 mins  |
March 20 - 27, 2023
What I Learned Working at a Hawaiien Mega-Resort
Bloomberg Businessweek US

What I Learned Working at a Hawaiien Mega-Resort

Nine wild secrets from the staff at Turtle Bay, who have to manage everyone from haughty honeymooners to go-go-dancing golfers.

time-read
10 mins  |
March 20 - 27, 2023
How Noma Will Blossom In Kyoto
Bloomberg Businessweek US

How Noma Will Blossom In Kyoto

The best restaurant in the world just began its second pop-up in Japan. Here's what's cooking

time-read
3 mins  |
March 20 - 27, 2023
The Last-Mover Problem
Bloomberg Businessweek US

The Last-Mover Problem

A startup called Sennder is trying to bring an extremely tech-resistant industry into the age of apps

time-read
10+ mins  |
March 20 - 27, 2023
Tick Tock, TikTok
Bloomberg Businessweek US

Tick Tock, TikTok

The US thinks the Chinese-owned social media app is a major national security risk. TikTok is running out of ways to avoid a ban

time-read
10+ mins  |
March 20 - 27, 2023
Cleaner Clothing Dye, Made From Bacteria
Bloomberg Businessweek US

Cleaner Clothing Dye, Made From Bacteria

A UK company produces colors with less water than conventional methods and no toxic chemicals

time-read
3 mins  |
March 20 - 27, 2023
Pumping Heat in Hamburg
Bloomberg Businessweek US

Pumping Heat in Hamburg

The German port city plans to store hot water underground and bring it up to heat homes in the winter

time-read
3 mins  |
March 20 - 27, 2023
Sustainability: Calamari's Climate Edge
Bloomberg Businessweek US

Sustainability: Calamari's Climate Edge

Squid's ability to flourish in warmer waters makes it fitting for a diet for the changing environment

time-read
4 mins  |
March 20 - 27, 2023
New Money, New Problems
Bloomberg Businessweek US

New Money, New Problems

In Naples, an influx of wealthy is displacing out-of-towners lower-income workers

time-read
4 mins  |
March 20 - 27, 2023