Fashion giant Shein raises $2 billion but lowers valuation by a third
The Chinese fast fashion retailer Shein has raised $2 billion in new funding, but its valuation has been slashed by a third to $100 billion. The company’s rapid growth has been fueled by its low prices and wide selection of trendy clothing, but it has also been criticized for its environmental impact and labor practices.
Shein, which launched in 2008 as a wedding dress retailer, has become the largest online-only fashion retailer in the world, surpassing Zara and H&M. According to its CEO Molly Miao, the company releases between 700 and 1,000 new items a day, catering to the tastes and preferences of its young and global customer base. Shein has also leveraged social media platforms like TikTok and Instagram to promote its products and engage with influencers.
However, Shein’s success has come at a cost. The company has faced allegations of copying designs from other brands, exploiting workers in its factories, and contributing to the environmental crisis caused by the fashion industry. According to a report by The Business of Fashion, Shein’s environmental impact in 2021 amounted to about 6.3 million tons of carbon dioxide equivalent, with almost all of its impact taking place in its supply chain. The company has also been accused of using hazardous chemicals and microplastics in its materials, which can harm the health of people and wildlife.
In response to these criticisms, Shein has recently announced some initiatives to improve its sustainability and social responsibility. The company has joined the Science Based Targets initiative, which aims to help businesses reduce their greenhouse gas emissions in line with the Paris Agreement. Shein has also launched a sustainability roadmap called evoluSHEIN, which outlines its goals and priorities for people, processes, and the planet. Additionally, the company has hired a global head of environmental, social, and governance, Adam Whinston, who reports directly to the CEO and oversees the company’s philanthropic programs.
While these steps are commendable, some experts and activists remain skeptical about Shein’s commitment to sustainability and ethics. They argue that the company’s business model is inherently unsustainable and that it needs to radically change its practices and values to make a real difference. They also point out that Shein lacks transparency and accountability, as it does not disclose much information about its supply chain, operations, or impact.
Shein’s latest funding round reflects both its achievements and challenges. The company has managed to attract investors who believe in its potential and vision, but it has also had to lower its valuation from $150 billion to $100 billion amid growing competition and scrutiny. The company faces a dilemma: how to balance its growth and profitability with its social and environmental responsibilities. How Shein resolves this dilemma will determine its future success and reputation in the fast fashion industry.