Although consumers know the negative impact of the fashion industry, with their shopping habits they are driving the growth of ultra-fast fashion companies such as SHEIN and Temu.
According to various reports, consumers are willing to pay for sustainable clothing and items. However, their purchasing decisions are not always in tune with the planet and the people who produce them.
So what drives our shopping behavior for viral garments on TikTok?
Mainly, consumers are convinced by the persuasive marketing tactics of fashion firms that encourage them to buy clothes that they do not need.
Also, when buying clothes in trend, psychologically we feel a sense of belonging that encourages us to buy more.
Ultra-fast fashion giants such as SHEIN, Asos, Temu, Boohoo, and Fashion Nova, continue to be the most popular brands among millennials and Generation Z.
The SHEIN case
This ultra-fast fashion giant was created in 2008 in Nanjing, China. Their online business model offers a huge variety of products a day at a low price.
Although it is based in China, it ships to 220 countries worldwide. The United States is its largest consumer market where it currently leads the fast fashion market.
According to a report by the Earnest Research Company, in June 2021 SHEIN was the largest fast-fashion retailer in the United States. It overtook Amazon as the most downloaded e-commerce app, making it the leading shopping app in that country.
Its great growth has led the company to open its first physical store in one of the most popular areas of Tokyo, in November 2022.
According to Similarweb, an Israeli software and data company specializing in web analytics, the Chinese giant has the most visited fashion site in the world and it is one of the most commented firms on TikTok and YouTube.
SHEIN has quickly grown from an unknown firm to one of the fastest-growing firms globally. It has become the favorite of younger generations for its skillful use of social networks, where its products are promoted daily.
According to Forbes magazine, SHEIN generated more than $10 billion in revenue in 2020.
In the eye of the storm
During its journey, SHEIN has faced criticism for its negative impact on global warming, for the lack of transparency of its supply chain, and for infringing the industrial property rights of other designers.
According to the report “Shining SHEIN: A business model based on hazardous chemicals and environmental destruction” by the NGO Greenpeace, SHEIN products have illegal levels of chemicals in breach of European Union regulations, with possible repercussions for consumers.
The report also suggests it has insufficient oversight of the management of hazardous chemicals in its supply chain, to which it exposes workers.
Another controversy came when the company awarded a $15 million grant to The OR Foundation. With this, they wanted to solve the problem of textile waste in the Kantamanto market in Accra, Ghana.
For critics, it was a clear example of greenwashing. There was a lack of concern about the environmental impact or transparency in its production that the Chinese giant has shown in the past, which they consider was driven by the rise of sustainability in the fashion sector.
Infringement Claims
In 2018, Levi Strauss & Co filed a lawsuit against SHEIN for infringement in a District Court in California, United States. They claimed that they manufactured and sold clothing with almost identical designs in that territory, which could confuse consumers as for the origin of their products.
In 2020, boot manufacturer Dr Martens sued the company in federal court also in California. It showed that the Chinese company manufactures and markets counterfeit footwear.
This week in a new lawsuit, H&M sued SHEIN in Hong Kong for copyright infringement, accusing its competitor of copying its designs.
Accusations
Fast fashion firm Zara accused SHEIN of plagiarism. The similarity of their designs is evidenced on the TikTok platform by consumers comparing the products of both companies.
Also, several independent designers have accused the Chinese giant of reproducing their work.
In 2020, the environmentally friendly Australian swimsuit brand Baiia stated that SHEIN recreated its designs.
In 2021, Bailey Prado sued SHEIN for reproducing at least 20 of his designs. While in that same year, the Nigerian brand Elexiay accused her of copying one of their jersey designs.
Current controversy
The recent trip of a group of influencers sponsored by SHEIN to a factory of the company in Guangzhou, China, became a major controversy. It was an attempt to make the brand transparent. It came on the heels of the Channel 4 documentary broadcast in October 2022 exposing inhumane working conditions in the factories that supply its products.
Several of the influencers posted images and gave their testimonies on their social networks. Their content was positive, and they praised SHEIN, attempting to present the firm as ethical contrary to its history of complaints of poor working conditions.
Temu’s case
With its slogan “Buy like a billionaire”, Temu is an online shopping app. It has experienced a rapid rise since its launch less than a year ago.
Dubbed the TikTok of e-commerce, it was founded in 2022 in Boston, Massachusetts, by PDD Holdings, owner of e-commerce platform Pinduoduo with operations in China.
According to its website, Temu is an online marketplace that connects consumers with millions of sellers, manufacturers, and brands around the world. Its mission is to provide the means to live their best lives.
The company only deals with the shipment of the items to customers. It does not own the products on its website but acts as a bridge between buyers and sellers.
Temu offers affordable low-cost products directly from manufacturers in China, which has allowed its great growth.
In the United States, it has become the most downloaded application in May. Coming to Europe earlier this year, it’s one of the most popular apps in the UK.
Experts claim that their success is driven by their effective marketing practices. In these, the offers and discounts are constant, and the influencers promote additional discounts on their social networks.
In addition, they can include free items with purchases, which are usually cheaper than similar products offered by their competitors such as Amazon or AliExpress.
Temu and some controversies
The company has been accused of plagiarizing photos and descriptions of competitor Amazon.
Also, some customers have shown their dissatisfaction with negative reviews. They have complained about the long shipping times, the low quality of the items, the poor customer service and some even claim that the items delivered looked different from the ones displayed.
The conflict between the giants SHEIN and Temu
Currently, both companies are two of the main giants of fast fashion, leading a fight for the US market.
Temu has sued SHEIN in the United States, alleging that its rival violated antitrust laws by threatening and preventing suppliers from working with them.
According to the complaint, SHEIN accounts for more than 75% of the U.S. fast fashion market. Before the arrival of Temu in the market, SHEIN would have forced manufacturers to sign agreements that excluded the other firm.
SHEIN had previously sued Temu in the United States for trademark and copyright infringement, as well as false and deceptive business practices.
Separately, the U.S. Select Committee on the Chinese Communist Party has released an interim report detailing the preliminary results of the bipartisan investigations into SHEIN and Temu.
The report highlights the exploitation of provisions that allow them to avoid the application of customs rules.
Temu was found to lack a system to ensure compliance with the Uyghur Forced Labour Prevention Act. This raises fears that their products may come from forced labor.
President Mike Gallagher called the “results outrageous. Temu does virtually nothing to keep its supply chains free of slave labor. At the same time, Temu and SHEIN are building empires in our import rules, circumventing import taxes and evading scrutiny of the millions of products they sell to Americans. We need to take a hard look at this loophole that is abused to tip the scales against U.S. companies.”
