Photo: SHEIN
Over the next five years, the ultra-fast-fashion giant plans to spend $70 million to train and support suppliers and develop leaner production models.
Chinese fast-fashion retailer Shein plans to become more focused on sustainability, Executive Vice Chairman Donald Tang said on Tuesday (Apr 25), adding that consumers are no longer just concerned about affordability.
Shein sells US$10 dresses and US$5 tops and has taken market share from other affordable fashion retailers. The company produces clothing in China to sell online in the United States, Europe and Asia and has been criticised for promoting throwaway fashion.
“Consumers these days are no longer looking just at price: In the next phase to continue to grow you need to have ESG in mind,” Tang said at the World Retail Congress in Barcelona.
ESG, an acronym for environmental, social, and governance, is a term used to describe corporations’ efforts to be more responsible.
Tang said that Shein is offering customers an option to pick higher-quality materials and pay a premium for them for certain items.
He also mentioned Shein Exchange, the company’s platform where shoppers can resell used clothes, which launched in the US in October and aims to start in other markets this year.
Shein continues to grow “very robustly”, Tang said, and regularly has less than 2 per cent of unsold inventory.
The company said it will step up investment in a supplier programme launched last year after a UK television documentary claimed it found labour abuses at two supplier factories. It initially pledged $15 million to upgrade hundreds of facilities in its supply chain, but is now adding $55 million to the fund.
Most of that money will be spent on a new R&D and training centre focused on driving even more efficiency into Shein’s production model. But the company also plans to spend $10 million on housing and recreation facilities and $5 million to build and staff 60 childcare centres in the communities where its suppliers operate.