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Episode 205: The SHEIN-sodes, part 2: Bots, Stolen Art, and Phthala-what?!

This episode is part 2 in a short series about SHEIN: where it’s been, where it’s going, and how it is changing everything. If you haven’t listened to part one yet, go do that before listening to this episode.

In this part of the series, we will be tackling:
  • An update on SHEIN’s IPO plans.
  • Why and how SHEIN’s low prices are unnaturally and unethically low.
  • How SHEIN’s byzantine corporate structure virtually shields it from any legal accountability.
  • SHEIN is infamous for stealing designs from artists and smaller brands. And also big brands! How is it doing that?
  • How the way SHEIN runs its business could be endangering its customers (along with the people making its products).
 
Additional reading (lots of sources again this week):

Experts say Shein’s U.S. IPO is all but dead,” Ece Yildirim, CNBC.
“Shein sought to reassure US over China supply chain ahead of IPO,” Financial Times.
“Shein’s London IPO plan in regulatory limbo as investors grow jittery, sources say,” Coco Feng and Wency Chen, South China Morning Post.
“Shein UK breaches company law by failing to disclose human owner,” Julia Kollewe, The Guardian.
“Shopping platform Shein poised to take major U.S. market share. UBS thinks these companies will be hurt most,” Alex Harring, CNBC.
“Shein stole my design so I’m spilling all the tea and it’s PIPING HOT.”
“40+ Businesses Shein Stole Designs From: The Complete List,” Ethically Dressed.
“‘Details I made, they made’ – designers hit back at Shein’s imitation game,” Ellie Violet Bramley, The Guardian.
“Shein’s fast fashion comes with fast-finance risks,” John Foley, Reuters.
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Transcript

We have talked about all of the reasons why SHEIN is just destroying all of the big fast fashion brands right now: 

  • virtually infinite assortment: SHEIN has about 600,000 styles available for purchase on its site every single day, launching 6,000 new items daily.
  • Extended sizing: we can agree that SHEIN”s fit is not great, and in conversations I’ve had with those who have shopped from SHEIN, I have learned that the sizing is way off and inconsistent, particularly in the plus sizes. Everyone deserves better than SHEIN and it makes me so angry that this is the best option for so many people because the rest of the clothing industry ignores them.
  • Convenience: 600,000 items to choose from AND I don’t have to leave my couch to buy them? AND super fast shipping (remember all of those airplanes from last week’s episode).



But the biggest advantage SHEIN has over every regular old fast fashion retailer out there is PRICE.  And most conversations sort of in defense of SHEIN always come back to the price, how it’s more accessible than any other brand out there.

 

I decided to go take a look for myself. Just how low are SHEIN’s prices? 

 

Immediately I was greeted by some banners offering me a few different deals:

  • Free shipping and a 20% off coupon for my first order
  • Or a coupon code that would give me 10% off a $69 order, 15% off of $109, 20% off $189
  • I could also join the SHEIN Club and get 5% off of more than 100,000 items (sorry, just saying “100,000 items” gives my eco-anxiety a big kick in the butt), along with free shipping coupons.

 

I figured I would look at dresses, since that’s an area of personal interest to me.  So I clicked on dresses and sorted by price “high to low.” I wanted to know how many dresses SHEIN offered under $10 and immediately I was shocked, with so many dresses that were priced under $5.  $4.36  $4.25  $2.35  $2.20

 

I wondered how many dresses SHEIN had under $10, so I started counting…and I stopped counting when I reached 450 because well, eventually this episode needs to be finished, right?

 

Anyone who has made clothes, whether literally by cutting them and sewing them, or in the more business-y sense like me, as a buyer, can’t help but be shocked by these prices.

 

Like they just don’t make sense.  Let’s think about it for a minute:

  • First we have to think about the obvious costs: fabrics, trims, zippers, hook/eyes, buttons, lining, etc. I mean, what kind of fabric are you using if you can make a profit off of a dress selling for $2.20? Or, $1.80 if a new user like me gets that 20% off discount?
  • Next there are the things we often don’t notice that also cost money: the labels inside that say the brand name, size, care instructions, and fabric content.  They cost money to make AND they cost money to sew in.  Often 10-25 cents, much more if you are a smaller brand.
  • But also, the actual cutting, sewing, inspection, and packing of that garment.  In the world of fast fashion, the people doing all of those tasks make at best 4% of the selling price.  So all of those people are sharing…8 cents for their work on that $2.20 dress?!  I don’t want to go to hardcore Clotheshorse right out of the gate, but we have a saying around here “it’s cheap because someone didn’t get paid.” And in this case, how is anyone getting paid?
  • There’s more: fit samples, design and production team salaries, duties, taxes, shipping, packaging, marketing costs, company overhead, on and on and on.  When we buy clothes from a regular fast fashion brand, we are paying for all of those things.

 

None of this makes sense with a $58 dress from Urban Outfitters. And it certainly doesn’t make sense with a $10 dress or one that costs $2.20.

 

SHEIN prices are artificially low. Unnaturally low. Unethically low.  I am sure you are figuring that out by now.  In last week’s episode, we talked about how SHEIN has two major advantages working in its favor in comparison to the regular fast fashion brands: 

 

  1. It ships directly from the factory. So the company doesn’t have the overhead expenses of warehouses, stores, and the staff that fills them.
  2. It doesn’t pay duties on the orders it ships into the United States, which makes it easy to charge super low prices that regular retailers can never offer.   Remember this little nugget from last week: “According to the companies themselves, SHEIN and Temu paid a grand total of $0 in import taxes in 2022. For reference, during the same year, GAP paid $700 million in import duty while H&M paid $205 million.”  As a buyer, those duties were part of the cost structure of an item.  A polyester dress has a duty of 32% of its value.  Let’s say a dress costs $8 to make in China.  That’s the fabric, the sewing, all of the things we discussed earlier, and yes, that is also scandalous to me.  A retailer imports it into the US. That 32% duty will add another $2.56 to the cost of that dress, which the retailer will pass on to you as part of the retail price.  SHEIN doesn’t have to do that, so that’s another reason it can offer prices that are unnaturally low.

 

These are some major factors in SHEIN’s unnaturally low prices, but it’s more than that. It’s stealing designs.  It’s avoiding legal repercussions.  It’s skipping things like product testing for safety.  It’s horrible working conditions in its factories.

 

We know–all of us–in our heart of hearts, even if we’ve never sewn a garment in our lives, that these prices don’t make sense.  Even if we don’t know a thing about duties or garment workers or overseas shipping.  These prices are too cheap to be true.  But many of us compartmentalize it and make the purchase anyway.  Or we tell ourselves “it’s different over there.” Or “It’s cheaper because it’s shipping from the factory.”  Maybe we don’t tell ourselves anything at all because it’s too difficult to let ourselves open that door.  We live in a society that tells us we need a lot of new clothes.  That tells us we have to dress a certain way to be successful socially, professionally, and romantically.  We live in a world that tells us every day that something (or many things) about us is a “problem area” that can be remedied or disguised by this shirt or those jeans.   We are told that we need to look young, not poor, thin, on-trend, and sexy but not too sexy…and the only way to achieve that is by buying more and more stuff.

 

Of course we are going to try not to question a $2.20 dress. Because we need to survive, right?!

 

I really struggle with anxiety.  Now as adult, but also as a child.  I can’t remember a time when I wasn’t feeling at least a little sick with anxiety. I have gotten better at managing it, but it still is something I deal with every day.  Even Clotheshorse, while a nice distraction from my daily fretting, is also a source of a lot of anxiety for me. 

 

As a kid, when I didn’t know that this worrying and fear had a name, I also knew it wasn’t worth discussing with anyone.  It was my job to figure out how to deal with it.  I have this very specific memory of laying in my bedroom, I was about 7, I want to say. Back then we lived in this trailer out in the country (it was part of a trailer park), and I had my favorite bedroom of my childhood.  I often wasn’t involved in decorating choices and my mom was not a huge fan of my ideal pastel lifestyle. But somehow, for this room, I had been allowed to pick out the wallpaper at this sort of scratch and dent liquidation outlet for home stuff.  And while my mom was trying to steer me toward a beige geometric pattern, I saw buried in the pile, a gleaming white roll with a pastel rainbow pattern.  

 

“Are you sure,” my mom asked. “You’ll hate that when you’re a teenager.” And spoiler: I would not have “hated” that as a print as a teenager, but I might have been embarrassed because it wouldn’t reflect my 70s grungey aesthetic then.  But I would probably have still kind of secretly loved it, covered it with posters, and just occasionally peeled away the Breeders or Nirvana, just to have a glimpse of it and feel happy about it.

 

Maybe I knew by then that I would always love pastel rainbows.

Or perhaps I already understood that we would never stay anywhere for long time, so we certainly wouldn’t be there by the time I was teenager. By then, I had already gone to four schools and lived in probably a dozen homes.

 

So yeah, that wallpaper brought me a kind of joy and peace. It was really my room.  When I was worrying too much, I would sit on the floor and just stare at the rainbows and zone out.  It made me feel calmer, stopped the spiral.

 

But one night, this memory that I’m sharing with you, it was one of those annoying summer nights where you have to go to bed because bedtime is at 8:30, but it’s still light outside. And to make matters worse, you can hear other kids outside having fun.  So it’s already kind of an upsetting time.

 

I was thinking about a boy I knew from school. Or rather, I knew his sister from school. He had leukemia, so we had been doing all kinds of bake sales and walkathons to raise money for his treatment.  After all, this is the US where an illness will bankrupt your family.

 

It felt like he had been sick since I was in kindergarten, and now it was the summer between second and third grades. It just seemed like he would always be sick, but he would still be around. He was my brother’s age and they would end up graduating together.  

 

But that didn’t happen.  Because he died that summer.  And I was in bed that night really worrying about it.  It seemed like bad things happened to innocent people all the time.  I watched the nightly news with my grandpa, so I knew about wars, bombs on airplanes, hijackings, tornados, earthquakes, and other nightmares.  I had spent a few months that year obsessing over the Titanic, and I knew that many people had died a terrifying death, others had to cope with the nightmare of surviving it for the rest of their lives.

 

I knew that these kinds of things seemed unfair. And scary. And random.

 

Laying in bed that night, hearing the kids that lived in the trailer across from ours playing on their slip and slide (which btw we were not allowed to use because my mom said it was dangerous), I found myself worrying about my brother dying of leukemia. Or maybe me.  I had already had cancer once.  It seemed likely that more bad things could happen to me.

 

I worried about being on a boat that sank.

A plane that fell out of the sky.

Maybe being at the beach when a tsunami rolled in.

 

How could I be expected to survive in such a terrifying world?

I stared at the pastel rainbows on my wallpaper, always so joyful and positive. They lived in a world where bad things never happened.  Why couldn’t I live there, too?

 

And then I decided something. 

All of those bad things that happened? They weren’t real. They hadn’t happened to real people.  They were just stories for all of us real people. We were supposed to learn from them, be grateful for our lives. But those things weren’t really happening. No one was being hurt.

 

I told myself this over and over again, and well, wouldn’t you know, if you tell yourself something often enough, it becomes a fact to you.

 

And I used this to comfort myself for years, long after we had moved away from that trailer with its most perfect wallpaper.  One day–and I don’t know when this happened specifically–I must have realized that it wasn’t true. But it helped me survive for so long, it gave me one less thing to worry about.

 

There are so many things happening in this world right now at this exact moment that I am recording this, that you are listening to this, that are terrible. And if we sat down and forced ourselves to witness them all right now, I don’t know how we would get up and live another day.  Or do the laundry. Go to work.  Take out the recycling. Pay the electric bill.

 

And that includes the reality of many of the things we buy, wear, and use.  The stories behind them are BAD.  Some are worse than others.  We know that fast fashion is bad…the microplastics, the carbon footprint, the water pollution, the horrible conditions under which these things are made, the rotting clothes in the Atacama desert in Chile or on the beaches in Accra, Ghana.

 

But we also have to survive our lives.  We have to be friends, partners, coworkers, mothers, neighbors.  We have to get up every day and keep living.  And in a world where we have to dress a certain way in order to fit in, be respected, and maybe succeed…sometimes we just have to stare at the rainbow wallpaper and tell ourselves a story to make us worry less about what we are about to buy, even when the prices just don’t make sense at all.

Welcome to Clotheshorse, the podcast that is still talking about SHEIN.

I’m your host, Amanda and this is episode 205, part two in a short series I am calling “The SHEIN-sodes.” If you haven’t listened to part one yet, go do that because it really sets up a lot of things I am going to mention in this installment.

 

In this episode we are going to continue to explore just how SHEIN can charge those unnaturally low prices and how its success could have a very bad halo effect on just about everything we buy (along with our wages and jobs, no matter where we work or what we do).

 

We will be discussing the following:

  • How SHEIN’s byzantine corporate structure virtually shields it from any legal accountability.
  • SHEIN is infamous for stealing designs from artists and smaller brands. And also big brands! How is it doing that?
  • And how the way SHEIN runs its business could be endangering its customers (along with the people making its products).

 

Before we get started, as a reminder:

 

SHEIN’s growth and impending IPO are a bad thing for everyone on this planet. 

  • We are not picking on SHEIN when we talk about the ethical/environmental issues related to its business model.
  • We are not being xenophobic when we talk about SHEIN.
  • We are not shaming people for shopping from SHEIN.  If you are wearing SHEIN clothes right now or just placed an order, it doesn’t matter. You are a part of this community and we are glad you are here.

 

We are talking about SHEIN because its success is pushing the fashion industry to make clothing a lot faster and more quasi-disposable. It is making the problem of fast fashion much, much worse.



One more thing: I am once again reminding you of the Clotheshorse Jamboree. It is happening August 16-17 here in Lancaster, PA. Tickets are $200, but they will be going up to $300 on July 1.  So buy your ticket now!  And guess what? I have introduced a payment plan option:

 

Here is how the payment plan works:

  • Each payment is $50, spread over 4 payments.
  • The first one happens when you buy your ticket.  You will use promo code “INSTALLMENT1” at checkout (when you enter your payment info).  You will be charged $50 and you will receive your actual ticket via email immediately. 
  • I will send you a link to pay the remaining payments on 6/25, 7/25, and the week of the jamboree.

Have questions? Reach out to me via email.  Otherwise, get your ticket now.  That payment plan option will disappear on July 1.

If you are planning to come but you’re still trying to figure out details, drop me an email and I will honor the $200 price through July for you.

So where are we right now? Well, last week we talked about SHEIN’s attempts at an IPO (initial public offering, essentially becoming a publicly traded company).  SHEIN was hoping to go public here in the US on the New York Stock Exchange, where it could have received the maximum value on its shares.  But experts are now saying that dream is officially dead, as SEC regulators (as well as members of Congress) think that SHEIN is a risky investment thanks to its environmental impact, ties to forced labor (thanks to its murky–at best–supply chain), and its ties to the Chinese government.  Furthermore, its current corporate structure insulates it from a lot of financial risk (like paying duties or settling lawsuits), and that structure would change if the company became publicly traded.  There is a direct correlation between all of these risks–the ties to forced labor, the environmental impact, the lack of duties, taxes, and legal responsibility–and SHEIN’s unnaturally low prices.  Should the company become publicly traded, those prices will likely have to change, which makes investment even riskier because customers may decide to shop elsewhere.

 

SHEIN has shifted gears, and is now trying to file its IPO in London. And it might happen because word on that street (perhaps Wall Street) is that London is pretty desperate for the influx of money that a SHEIN IPO could bring in. It’s also a much smaller market than the New York Stock Exchange, so this is sort of SHEIN settling for less money in its IPO.

 

But now sources are saying that the London IPO is kind of in regulatory limbo, too, for many of the same reasons it did not succeed in the US.    Furthermore, there was a significant error in its initial filing for its IPO in London.

 

What I am about to read to you is from the South China Morning Post.  I’ll share the link in the show notes, as always: 

 

The company’s local entity, Shein Distribution UK, breached the law by failing to list a human as its “person with significant control (PSC)” in its filing to Companies House, the national corporate registrar, The Guardian reported in March.

 

A month later, Shein changed its filing to say that it believes “there is no registrable person or registrable relevant legal entity in relation to the company”.



What does this mean?

Well a PSC, or “person of significant control” is someone who owns or controls a company. In the case of SHEIN, one would expect it to be the company’s now billionaire founder, Chris Xu.

 

A PSC either holds more than 25% of the shares in the company, more than 25% of the voting rights in the company, has the right to appoint or remove the majority of the company’s board, or has the right to exercise significant control over a business.

 

Once again, one would expect this to be founder Chris Xu, but then again, the structure of SHEIN’s business is well, really complicated (we will get into that in a few).

 

If this “mistake” on the filing was a genuine mistake, well it’s a bit surprising for a a company valued at more at more than $60 billion.  Like, they have the resources to hire someone detail oriented to do that paperwork correctly. So this is also making investors feel a bit weird.

 

So it’s hard to know what will happen next, but private investors of the company–who invested money in anticipation of making it all back times a lot more when the IPO happens–are now getting nervous and asking for their money back! 

But regardless of how this IPO works, SHEIN’s success is making the rest of the publicly traded fast fashion brands (and their investors) very, very nervous. 

 

Last month, in my episode breaking down the question  “is it classist to talk about fast fashion?” I talked about a report released late last year by UBS Securities about SHEIN customers.  This was the one that revealed that the average SHEIN customer is 34.7 years old and makes about $65K in income each year. Cue the predictable headlines of “34 year olds should know better” and “It turns out SHEIN customers aren’t poor.” 

 

As I discussed in that episode, I have a few issues with that:

  •  The researchers focused on 684 regular Shein customers.  That’s not the biggest sample group in my opinion (especially when I know that at the end of 2022, the Shein app had 74.7 million total users worldwide)
  • 34.7 years old is not well, old.  And fast fashion is a problem for people of all ages.  I think this just goes back to a lot of the ageist misconceptions people have about fast fashion: that it’s for young, trendy people.  Nope.  Ann Taylor, Chicos, and Anthropologie are definitely fast fashion and they cater to an older target customer. But also, Shein launches 6,000 new styles every day…so odds are very high that they have stuff for the decrepit olds like me.
  • The whole $65,300 in annual income thing:  People on social media were like I TOLD YOU THAT SHEIN CUSTOMERS WERE RICH.  Well, as we talked about  in the episode, an income of $65,300 might not even indicate that a person is making a living wage.  Like, if they live in Austin, TX that’s only a living wage if they are unmarried and have no children.  But also, what if they have student loan debt? Medical bills? Care for a family member? Yes, $65K sounded like a zillion dollars a year to me until I made $65K and I was like “oh god I’m still just getting by because I’m a single parent with student loans and I live in Portland, OR.”



But the study did capture some stuff that indicates that SHEIN is a major problem for many fast fashion retailers:

  •  First: more and more customers are shifting their spending to SHEIN. While the data around spending habits, income, and age focused on 684 customers who identified themselves in the study as “regular SHEIN customers,” the study itself began with 4000 American women. In June 2020, when the study began, just 0.6% of the women said they bought clothing from SHEIN. That percentage rose to 2.5% by June 2022 and came in at 4% last year. Researchers expected that number to dip as people returned to in person shopping. But no, they were choosing SHEIN over shopping IRL.

 

  • What else? 3 out of 10 SHEIN shoppers said they had shopped at TJ Maxx in the last three months.  In other words: TJ Maxx should feel nervous about more customers migrating to SHEIN.  Customers also said they shopped at Victoria’s Secret, Macy’s, Old Navy, Kohl’s, Ross, American Eagle, and H&M. And guess what? When this report was released last December, all of these companies–except for TJ Maxx–were struggling with reduced sales and lower stock prices.  Many continue to struggle. UBS said, “The data also causes us to believe SHEIN is a major and increasing threat to US specialty retailers.” And that list includes Urban Outfitters, department stores, really any store at the mall or online at this point.

 

And American customers that participated in this survey said time and time again that their primary reason for shopping at SHEIN over all of these other brands was price.

 

Now if you think all of these retailers who are struggling with sales are not reading that study and thinking “we need to figure out how to lower our prices,” well, think again. They are definitely trying to get there, somehow.  And as I talked about last week, that means lower quality stuff for all of us and lower wages for everyone involved in making, shipping, or selling these clothes, whether they work in the factories, the corporate offices, the UPS hub, the stores, or the warehouse.  It affects everyone.

 

Furthermore, can we just take a moment to recognize that selling dresses for $10 or $5 or $2.20 devalues clothing as a whole? Suddenly we–because we’ve been zoning out on that rainbow wallpaper for too long–we think the CORRECT (and reasonable) price for a dress IS $10 or $5 or $2.20.   And we want all brands and designers to sell them for that price, even small businesses. And if a brand new dress is $2.20 or $5 or $10…well, then a secondhand one needs to be like $1…so we also think secondhand resellers and thrift stores are price gouging us.  

 

And, because these clothes are so cheap, we expect to wear them for a brief period of time, only to be replaced again soon.  That UBS survey said that SHEIN customers were spending about $100/month on clothing.  That could mean 10 dresses each month. 20 dresses each month. Or roughly 50 dresses each month, depending on the prices.  And no one needs that many of anything every single month.

 

But it’s easy to do that when the prices are really that low, even if it is unnaturally so.  Last week we talked about some of the reasons that SHEIN can offer these unnaturally low prices: they don’t pay duties.  They don’t have warehouses. 

 

Another big reason that SHEIN can offer those low, low, too low to be true prices is that the company has lower overhead expenses.

 

One of those reasons is that it doesn’t have a team of designers to create the 6,000 styles it launches on its site every day. I mean, imagine the massive team of buyers, designers, technical designers, and production people that would be required to put together 6,000 “okay” styles to launch every single day.  That’s almost 2.2 million new styles every year.  Anyone who has ever worked in corporate design or production is gasping right now.  Because there’s just no way, unless you have about 10,000 employees just working on product development, design, and production.  

 

But SHEIN says it has about 10,000 employees worldwide. And those people are most likely working on marketing, accounting, clerical stuff, website stuff, photography, product copy, social media, and so much more.

 

SHEIN doesn’t have an army of people creating this product..And the salaries, offices, equipment, etc for that army of staff working on those designs…well, the artificially low prices of SHEIN can’t cover that.  That’s how they end up stealing so much work from artists and smaller brands all over the world.

Copying/stealing designs from smaller brands and artists has become a common practice in fast fashion, but SHEIN takes it to the next level because it needs even more new stuff to sell everyday. And furthermore, the company rarely faces legal/financial repercussions thanks to its complex organization of shell companies (we will talk about that later in this episode).

 

Instead SHEIN uses data–from customers and from around the internet–to capture styles that customers will want to buy.  From a Reuters piece called “SHEIN’s fast fashion comes with fast-finance risks:”

“At first glance, SHEIN looks just like an online retailer. But that’s deceptive because the company really trades data. It gathers information on how consumers browse and what flicks their switches…It then serves up that information to around 5,000 manufacturers, who can create small-batch products sold on SHEIN’s platform.”

 

But as some recent lawsuits explain, SHEIN is using more than just consumer data to create products.  

 

They allege that SHEIN is using a combination of AI and a powerful algorithm to scour the internet for designs and art that are receiving attention from potential customers.  A lawsuit filed last year by three independent designers/artists (Krista Perry, Larissa Martinez, and Jay Baron) cites SHEIN’s “practice of “produc[ing], distribut[ing], and selling exact copies of their creative works,” which they allege is “part and parcel of Shein’s ‘design’ process and organizational DNA.”

 

The lawsuit goes on to say:

“Shein’s design ‘algorithm’ could not work without generating the kinds of exact copies that can greatly damage an independent designer’s career — especially because Shein’s artificial intelligence is smart enough to misappropriate the pieces with the greatest commercial potential.”

 

Meaning: SHEIN’s algorithm knows how to pick the bestselling things to copy. 

 

A lawsuit filed this year by artist Alan Giana explains it well:

“Shein does not create many of its products; it certainly does not design thousands daily. Instead, it uses sophisticated electronic systems that algorithmically scour the internet for popular works created by artists…It then misappropriates those works to manufacture and sell as Shein’s own products, without notice or attribution to the artists and creators.

 

Shein uses algorithms, artificial intelligence, and related computerized monitoring systems to identify trending and ‘viral’ images and designs on social media, apps, and websites. It steals those images and designs from their owners, many of whom are innocent creators who support themselves through creative work.

 

Widespread copyright infringement is baked into the business.”




And I want to be clear that technology that scours the internet for designs to copy DOES exist. This is why we see so many knockoff tees all over the place. Technology that I cannot possibly understand (bots are involved) looks for images that receive a lot of positive feedback like comments and likes on social media platforms.  And then it copies them. It’s a regular occurrence in the world of t-shirts and other printable art. A few years ago, I talked about a 2019 BBC piece that discussed how artists were finding that their art was being stolen by bots via Twitter. I’ll share that in the show notes.  So we know the technology has been around for quite a while.  There is no doubt that SHEIN is using it, because to create 6,000 new styles every day, they would also need an army of people just trolling the internet for things to copy.  So it’s definitely technology based.

 

This excerpt from Giana’s lawsuit explains it a little bit better:

 

“After scraping data from non-Shein sources to identify relevant trends, Shein purportedly uses its algorithms to identify products for Shein’s suppliers to manufacture. Shein then automatically sends orders for the requested products to one or more of Shein’s legions of suppliers, adjusting production demands depending on the traction that the products get with Shein’s customer base.”

 

But here’s the thing: this is happening non stop and it has been happening nonstop for years now.  A 2022 Wall Street Journal investigation called “China’s Fast-Fashion Giant Shein Faces Dozens of Lawsuits Alleging Design Theft,” revealed that in the previous 3 years, there had been more than 50 lawsuits filed by big companies in the US against SHEIN for copyright infringement.  And it is a wide range of companies: 

  • Ralph Lauren, 
  • the sunglasses brand Oakley, 
  • Stussy (who btw discovered that SHEIN was not only stealing its art, but also selling shirts that literally said “Stussy” on them.
  • Nirvana. THE BAND.
  • For Love and Lemons
  • H+M

 

I mean, a wide variety here!

 

But SHEIN doesn’t stop what it’s doing.  Why? Well, it gets away with it!

 

SHEIN generally gets away with this unethical behavior for several reasons:

 

  • Well, first off, the artist/designer actually has to know that they were copied.  And unless they (or their customers) are checking SHEIN every day, they might miss it.  And SHEIN’s byzantine corporate structure makes it difficult to take legal action. I promise, we’re getting to that.
  • SHEIN usually orders only about 200 units of a new item. In contrast, a standard fast fashion retail would order 1,000 to 10,000+ units in an initial order.
  • Why does SHEIN order so little?  It allows them to test the legal waters.  If an artist/designer/brand discovers the stolen design, SHEIN can settle cheaply and fast, with little financial loss.
  • The small quantity allows SHEIN to claim it was a “blip” in the system.  Often SHEIN will say that a third party partner was responsible for the “mistake,” which allows them to avoid accountability from both the designer AND its customer base.

 

But also, it’s really fucking hard and expensive to win a lawsuit like this, especially if you’re a small business.  It’s even harder to fight SHEIN.

Designers and artists are generally unable to do very much about Shein’s intellectual property theft.

 

  • If the designer can afford a lawyer (and that’s a big IF), they might be able to negotiate a settlement.  More often than not, nothing really happens, other than Shein pulling the item off the website.
  • Furthermore, if there is no pushback from the creator of the design, and customers like the product, Shein will order many more units. When customers buy copies/knockoffs, they are actually signalling Shein to continue copying.
  • Often when an idea/design/art enters the “knockoff” cycle via SHEIN, it’s just the first stop on a long, uncontrollable chain of copies that move through progressively less reputable brands, ultimately living on Amazon or AliExpress for years. This robs the original creator of ownership and often decreases the value of their original work.  This can end their business completely or force them to find a different direction.

 

Copying artists/designers/smaller brands is an incredibly unethical act that is often overlooked or excused by customers who are happy to find a “deal.”

 

SHEIN isn’t doing you a “favor” by creating a cheap knockoff of something you like.

 

They are just profiting from unethical behavior. 



Earlier this year, one of you sent me a post from a business called A Marie A Creates. She makes all kinds of cute, vintage inspired graphic stuff.  She discovered that some of her art and product had been directly copied by a company making stuff using the Cupcakes and Cashmere brand name, and it was for sale at TJ Maxx.  

 

What shocked me most about this wasn’t the copying itself or how the influencer behind Cupcakes and Cashmere didn’t take accountability…it was how many people in the comments were blaming her, the artist, Ashley, for getting copied in the first place. They said it was her fault for not copyrighting her work (btw from a legal perspective, graphic art like that is protected legally as long as she has a demonstrable trail of evidence showing that she created it). People said she should be flattered. That she should be glad for the attention. Blah blah blah.



I hate this. I want to be clear that knockoffs like this, whether it’s SHEIN or Cupcakes and Cashmere doing it, destroy small businesses. Because now the artist has lost ownership of their work. People assume it was designed by SHEIN or Cupcakes and Cashmere. They might even be accused of copying SHEIN! And you know what?  This is a small business killer.  You might feel that the SHEIN knockoff of a Selkie dress is cheaper and it’s your right to have a cheaper version, but is it? Are you cool with all of the other small brands you love eventually going away because they can’t keep going because everyone is giving their money to SHEIN instead? We all lose out when companies steal from artists. The world gets a lot less interesting. 

 

Sometimes I get really deep into my head about these kinds of things and I can’t help but see how stealing from artists/designers/creators only exacerbates wealth inequality. How?

 

Well, big companies underpay their workers so they can’t afford the prices fairly asked by small businesses.

 

Then the big companies (like SHEIN) knockoff the small business and sell the copy to the underpaid workers.

 

Small businesses lose out, and big businesses continue to stack profits made possible by low wages and stolen creativity..

 

Protecting artists/designers is a matter of economic justice.

 

Things you can do to help a small business that has been copied by SHEIN or any other brand:

 

  • Don’t buy the copy! The main reason SHEIN (and other fast fashion brands) continue to “dupe” designs and arts from smaller brands? Because customers continue to buy them!
  • Let the small business know that you saw the copy.  Screenshots are a great idea!
  • Be loud AF about it:  post in your stories, comment on posts from the big brand, tell anyone who will listen! Tweet, email, and DM the big brand doing the copying! Encourage others to do the same.
  • Support the small brand: share their content, recommend them to others, and leave product reviews.



But back to SHEIN, all of these lawsuits aren’t really going anywhere, because it’s really impossible to hold SHEIN accountable from a legal perspective.  Its headquarters are in Singapore, but well, it’s a lot more complicated than that.

SHEIN seems like a big monolithic company to customers, but it’s actually a collective of shell companies, holding groups, and random-seeming conglomerates  based all around the world, in what a case calls a “byzantine shell game of a corporate structure.”

 

This confusing structure allows SHEIN to avoid a lot of responsibilities:

  • Taxes and duties.  No clear central hub in one specific country allows SHEIN to avoid a lot of taxes/ And yes, that saves them a lot of money. One more reason that it is able to offer these unnaturally low prices.
  • This structure also allows SHEIN to skirt issues of labor safety and wage theft. If it’s unclear who is responsible for a factory or a product, government agencies cannot hold anyone accountable or force change. 
  • This allows SHEIN to get away with a lot of sketchy business practices. Tracking down a defendant for any lawsuit is nearly impossible. Often cases cannot move forward. Discover that SHEIN has stolen your art or designs? Well, good luck holding someone responsible. You’ll be spending a lot of money paying a lawyer to try to find someone to serve with a cease and desist.
  • It’s also an issue of customer safety.  Find lead in your SHEIN clothing or get injured/sick from something you bought from them?  Oh well, there’s no one to hold responsible.



Okay, wait…am I being so melodramatic right now? Like how could you get sick or injured from SHEIN’s clothing?! I mean…it’s clothing, right?!

 

Well…remember in the last episode when we talked about how the path SHEIN product takes from the factory to the customer is different?

 

For fast fashion (and un-fast fashion)the path was always and remains (no matter how fast it is) factory—>airplane—>truck—>warehouse—>store or customer

 

SHEIN cuts that process down to  factory—>airplane—>customer. 

 

Well, when we think of the standard fast fashion process, we see a lot of places where quality or safety issues could be caught:

 

  • First the production team is going to be ensuring that suppliers conduct any safety certifications required by US law (and required by the company to minimize any future lawsuits). We’re talking things like flammability tests (yes, I have had products fail that) and lead levels, among others.
  • But also an item’s path to the customer will also have multiple points where issues like this could be caught before reaching the customer:
    • It passes through customs, where any major safety issues will be spotted.
    • Next it arrives at the warehouse, where the staff unpacks it and recognizes any large quality issues.
    • Next it arrives in the stores where more people unpack it and can spot any other egregious concerns.
  • By the time it gets into a customer’s hands, most big issues have been caught.  

 

SHEIN doesn’t have any of that. No design and production team to manage safety testing.  No customs inspection, thanks to the de minimis loophole. No warehouse.  No stores. 

 

And yeah, that means unsafe product makes its way to customers.

 

I was telling Dustin this week: between copyright infringement lawsuits and times SHEIN products were discovered to contain dangerous chemicals…well, this series could be 6 months long if I covered all of them!

 

Because it turns out SHEIN isn’t doing a great job of checking the stuff they sell for toxic chemicals. 

 

A 2021 investigation by CBC Marketplace found that a toddlers jacket purchased from SHEIN contained almost 20 times the amount of lead that Health Canada says is safe for children. A purse from SHEIN had more than 5 times the threshold. 

 

From this piece:

 

Lead is a naturally occurring element that can be found throughout the environment, but Joël Mertens, a product environmental impacts expert at the Sustainable Apparel Coalition, said the levels found in Marketplace’s lab results were beyond environmental contamination, or the small amounts clothes are exposed to unintentionally during the manufacturing process. 

 

“There were clearly products that were intentionally using lead and intentionally using it in a way that was well above what should be considered responsible  — or even safe,” he said.

 

I thought that was a pretty interesting perspective on this…that the factories making these products KNEW that they were making something dangerous, but still continued to do so.  And of course, SHEIN isn’t going to catch it because they aren’t ever taking ownership of the product. I’m guess they probably received a sample to photograph for their website, but that would be about it. 



Environmental chemist Miriam Diamond (who oversaw the testing) said, “This is hazardous waste. I’m alarmed because we’re buying what looks cute and fashionable on this incredibly short fashion cycle. What we’re doing today is to look [for] very short-lived enjoyment out of some articles of clothing that cost so much in terms of our … future health and environmental health. That cost is not worth it.”



I agree.

 

So that was 2021.

 

A 2022 Greenpeace Germany report called “Taking the shine off SHEIN” found that of 47 SHEIN products tested, 15% of them contained hazardous chemicals that exceeded EU regulatory limits, including:

 

  • Seven products containing 100-685 times the level of phthalates permitted under EU regulations.
  • A baby’s tutu had formaldehyde levels about 4 times the level permitted under EU regulations. Even low levels of formaldehyde can cause irritation of the eyes, nose, and throat. Long term exposure can cause certain cancers.
  • A pair of red stiletto boots had 3 times the level of nickel permitted under EU regulations.  Short term nickel exposure can cause skin irritation. Long term exposure can cause certain cancers.

 

Even worse,these items are not intended to be worn/used for very long. When they inevitably end up in landfills, these chemicals will leech into the soil and water, causing health effects for anyone living near these facilities. And you know what else? They are likely causing health issues for the people working in the factories making this stuff AND the people and animals living around these factories.

 

I want to read you an excerpt from Greenpeace Germany’s press release about this report:

 

“Greenpeace Germany’s findings show that the use of hazardous chemicals underpins SHEIN’s ultra fast fashion business model, which is the opposite of being future-proof.

 

SHEIN products containing hazardous chemicals are flooding European markets and breaking regulations – which are not being enforced by the authorities. But it’s the workers in SHEIN’s suppliers, the people in surrounding communities and the environment in China that bear the brunt of SHEIN’s hazardous chemical addiction.

 

At its core, the linear business model of fast fashion is totally incompatible with a climate-friendly future – but the emergence of ultra fast fashion is further accelerating the climate and environmental catastrophe and must be stopped in its tracks through binding legislation.

 

Alternatives to buying new must become the new norm.”



That last sentence is key. I hate that many of us live in a binary of SHEIN or nothing? Or at least that’s how it feels in these online conversations about SHEIN. Ultimately, we all deserve so much better than SHEIN.  And we won’t get anything better until we stop buying this stuff.  That doesn’t mean we walk around naked…it means that we buy less new stuff in the first place. We make our clothes last via care and repair.  And we shop secondhand first whenever possible.

 

Okay, so I’ve shown you examples of SHEIN products being dangerous in 2021 and 2022.  Let’s jump forward to THIS YEAR, just a few weeks ago:

 

  • Authorities in Seoul, South Korea have been conducting weekly testing/inspection of SHEIN products for toxic chemicals and other health/safety issues.  They choose a few items each week, at random.
  • Recently a test of 8 products revealed  that “one pair of shoes contained 428 times the permitted levels of phthalates — the highest observed so far during the Seoul inspections — and three bags had amounts as high as 153 times the limit.” Phthalates are hormone disruptors linked to heart disease, fertility issues, and some types of cancer.
  • So far authorities in Seoul have tested 93 products. They have found that almost half of them contained toxic substances, including children’s watches and coloring pencils.

 

Remember, SHEIN launches 6,000 new products every day. Only a tiny percentage are being tested/inspected by governments, news outlets, and organizations.  Think of how many are being missed!

 

So what happens if your SHEIN item gives you a rash or makes  you sick?  Who protects you?

 

  • If governments find toxic chemicals in a SHEIN product, there’s not very much they can do, other than seize those specific items.  It is very difficult to hold SHEIN legally responsible because they have no clear central business hub.
  • If you get sick or injured from a SHEIN item, you won’t have much luck with a lawsuit or getting them to cover your medical bills.  If an item from a “regular” fast fashion brand like Zara made you sick, you COULD sue them or even be part of a class action lawsuit.  In my experience working as a buyer in fast fashion, we only used materials that had been tested for flammability and high levels of toxic chemicals, due to both government regulations AND fear of being sued. Yeah, sometimes the fear of being sued is enough to get companies to make stuff that won’t kill you. 
  • And beyond that, if workers in the factories making this stuff for SHEIN get sick/injured (remember, they are being exposed to these chemicals in a bigger way), they don’t have a lot of legal recourse either because SHEIN’s corporate structure makes it difficult for any governing body to hold them accountable.



So here’s a summary of what we have talked about this week:

  • SHEIN’s prices are unnaturally low.  If they do become a publicly traded company, that will probably change because they are getting away with a lot of stuff that is very illegal and unethical BECAUSE of their weird company structure.  It’s hard to hold them accountable, whether they steal your art or make you sick.
  • BUT every other brand out there is going to continue to try to compete with SHEIN on pricing (spoiler: they can’t) so they will be making even crappier clothes, squeezing factories on pricing, and underpaying/overworking everyone involved with making, shipping, and selling those clothes to us. 
  • Furthermore, these low prices are creating an environmental and economic disaster as we cycle through clothes faster and faster and people are paid less and less to make them.  And SHEIN is obliterating small businesses around the world by stealing their art and undercutting them on price.



I’ve said it before and I’ll say it again:  All of us–no matter where we live, what we wear, or what we do for a living–are already experiencing the repercussions of fast fashion: microplastics in the water, soil, and food supply, water scarcity, the impact of carbon emissions, the suppression of wages, and even the emotionally corrosive nature of a steady stream of low quality/poor fitting clothing.

 

It will get worse as SHEIN becomes the standard for making and selling clothing. So we have to talk about SHEIN (often, to everyone we know). And I know that isn’t easy because there is a lot of scary information competing for attention with low prices, infinite selection, and #SheinHaul posts on every platform. But we can do it! It doesn’t have to be judgey or blamey, it just needs to be honest. So get your friends to listen to these episodes! Or tell them what you have learned.  We might think that “everyone” knows about SHEIN, but as I’ve learned while working on the Fashion Act, many people outside our bubble do not. Let’s talk to them about SHEIN!

 

Next week I’ll be back to talk about SHEIN again in what I think will be the final installment. In that episode, we will talk more about SHEIN’s supply chain, working conditions, and its consumption of fossil fuels.  AND MORE! Can I cram it all into one episode? Only time will tell!

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Clotheshorse is brought to you with support from the following sustainable small businesses:

Thumbprint is Detroit’s only fair trade marketplace, located in the historic Eastern Market.  Our small business specializes in products handmade by empowered women in South Africa making a living wage creating things they love like hand painted candles and ceramics! We also carry a curated assortment of  sustainable/natural locally made goods. Thumbprint is a great gift destination for both the special people in your life and for yourself! Browse our online store at thumbprintdetroit.com and find us on instagram @thumbprintdetroit.

Picnicwear:  a slow fashion brand, ethically made by hand from vintage and deadstock materials – most notably, vintage towels! Founder, Dani, has worked in the industry as a fashion designer for over 10 years, but started Picnicwear in response to her dissatisfaction with the industry’s shortcomings. Picnicwear recently moved to rural North Carolina where all their clothing and accessories are now designed and cut, but the majority of their sewing is done by skilled garment workers in NYC. Their customers take comfort in knowing that all their sewists are paid well above NYC minimum wage. Picnicwear offers minimal waste and maximum authenticity: Future Vintage over future garbage.

Shift Clothing, out of beautiful Astoria, Oregon, with a focus on natural fibers, simple hardworking designs, and putting fat people first.  Discover more at shiftwheeler.com

High Energy Vintage is a fun and funky vintage shop located in Somerville, MA, just a few minutes away from downtown Boston. They offer a highly curated selection of bright and colorful clothing and accessories from the 1940s-1990s for people of all genders. Husband-and-wife duo Wiley & Jessamy handpick each piece for quality and style, with a focus on pieces that transcend trends and will find a home in your closet for many years to come! In addition to clothing, the shop also features a large selection of vintage vinyl and old school video games. Find them on instagram @ highenergyvintage, online at highenergyvintage.com, and at markets in and around Boston.

St. Evens is an NYC-based vintage shop that is dedicated to bringing you those special pieces you’ll reach for again and again. More than just a store, St. Evens is dedicated to sharing the stories and history behind the garments. 10% of all sales are donated to a different charitable organization each month.  New vintage is released every Thursday at wearStEvens.com, with previews of new pieces and more brought to you on Instagram at @wear_st.evens.

Deco Denim is a startup based out of San Francisco, selling clothing and accessories that are sustainable, gender fluid, size inclusive and high quality–made to last for years to come. Deco Denim is trying to change the way you think about buying clothes. Founder Sarah Mattes wants to empower people to ask important questions like, “Where was this made? Was this garment made ethically? Is this fabric made of plastic? Can this garment be upcycled and if not, can it be recycled?” Signup at decodenim.com to receive $20 off your first purchase. They promise not to spam you and send out no more than 3 emails a month, with 2 of them surrounding education or a personal note from the Founder. Find them on Instagram as @deco.denim.

The Pewter Thimble Is there a little bit of Italy in your soul? Are you an enthusiast of pre-loved decor and accessories? Bring vintage Italian style — and history — into your space with The Pewter Thimble (@thepewterthimble). We source useful and beautiful things, and mend them where needed. We also find gorgeous illustrations, and make them print-worthy. Tarot cards, tea towels and handpicked treasures, available to you from the comfort of your own home. Responsibly sourced from across Rome, lovingly renewed by fairly paid artists and artisans, with something for every budget. Discover more at thepewterthimble.com

Blank Cass, or Blanket Coats by Cass, is focused on restoring, renewing, and reviving the history held within vintage and heirloom textiles. By embodying and transferring the love, craft, and energy that is original to each vintage textile into a new garment, I hope we can reteach ourselves to care for and mend what we have and make it last. Blank Cass lives on Instagram @blank_cass and a website will be launched soon at blankcass.com.

Gabriela Antonas is a visual artist, an upcycler, and a fashion designer, but Gabriela Antonas is also a feminist micro business with radical ideals. She’s the one woman band, trying to help you understand, why slow fashion is what the earth needs. If you find your self in New Orleans, LA, you may buy her ready-to-wear upcycled garments in person at the store “Slow Down” (2855 Magazine St). Slow Down Nola only sells vintage and slow fashion from local designers. Gabriela’s garments are guaranteed to be in stock in person, but they also have a website so you may support this women owned and run business from wherever you are! If you are interested in Gabriela making a one of a kind garment for you DM her on Instagram at @slowfashiongabriela to book a consultation.

Vagabond Vintage DTLV is a vintage clothing, accessories & decor reselling business based in Downtown Las Vegas. Not only do we sell in Las Vegas, but we are also located throughout resale markets in San Francisco as well as at a curated boutique called Lux and Ivy located in Indianapolis, Indiana. Jessica, the founder & owner of Vagabond Vintage DTLV, recently opened the first IRL location located in the Arts District of Downtown Las Vegas on August 5th. The shop has a strong emphasis on 60s & 70s garments, single stitch tee shirts & dreamy loungewear. Follow them on instagram, @vagabondvintage.dtlv and keep an eye out for their website coming fall of 2022.

Country Feedback is a mom & pop record shop in Tarboro, North Carolina. They specialize in used rock, country, and soul and offer affordable vintage clothing and housewares. Do you have used records you want to sell? Country Feedback wants to buy them! Find us on Instagram @countryfeedbackvintageandvinyl or head downeast and visit our brick and mortar. All are welcome at this inclusive and family-friendly record shop in the country!

Located in Whistler, Canada, Velvet Underground is a “velvet jungle” full of vintage and second-hand clothes, plants, a vegan cafe and lots of rad products from other small sustainable businesses. Our mission is to create a brand and community dedicated to promoting self-expression, as well as educating and inspiring a more sustainable and conscious lifestyle both for the people and the planet. Find us on Instagram @shop_velvetunderground or online at www.shopvelvetunderground.com

Selina Sanders, a social impact brand that specializes in up-cycled clothing, using only reclaimed, vintage or thrifted materials: from tea towels, linens, blankets and quilts.  Sustainably crafted in Los Angeles, each piece is designed to last in one’s closet for generations to come.  Maximum Style; Minimal Carbon Footprint.

Salt Hats:  purveyors of truly sustainable hats. Hand blocked, sewn and embellished in Detroit, Michigan.

Republica Unicornia Yarns: Hand-Dyed Yarn and notions for the color-obsessed. Made with love and some swearing in fabulous Atlanta, Georgia by Head Yarn Wench Kathleen. Get ready for rainbows with a side of Giving A Damn! Republica Unicornia is all about making your own magic using small-batch, responsibly sourced, hand-dyed yarns and thoughtfully made notions. Slow fashion all the way down and discover the joy of creating your very own beautiful hand knit, crocheted, or woven pieces. Find us on Instagram @republica_unicornia_yarns and at www.republicaunicornia.com.

Cute Little Ruin is an online shop dedicated to providing quality vintage and secondhand clothing, vinyl, and home items in a wide range of styles and price points.  If it’s ethical and legal, we try to find a new home for it!  Vintage style with progressive values.  Find us on Instagram at @CuteLittleRuin.