Common Assignment

Shein, a popular online clothing retailer, has faced controversy regarding its business practices. While they offer affordable prices and claim to follow labor laws, rumors of forced labor and child labor have circulated. Shein denies these allegations and states they are committed to transparency. Critics argue that the low prices are suspicious and point to China's history of labor violations. The lack of concrete information and conflicting reports make it difficult to determine the truth. However, the negative rumors are causing consumers to question the company's practices and demand answers. Hi, I'm Kasey Jones, and this is my common assignment. So, as we approach the Christmas season, the general public is thinking about gift giving, getting together with friends and family, New Year's parties, and employers are hosting holiday or end of year celebrations. But, let's be honest, the thing on people's minds the most is the gift giving or receiving. And one of the biggest names associated with gift giving or buying clothing for yourself or others to wear is Shein. Shein is a global online clothing, and more recently, lifestyle retailer. But, Shein has somewhat controversial these days. It is a lifesaver to some, as they provide a decent product for a very affordable price, but their quick to rise popularity made people dig a bit deeper and question the policies and practices of this powerhouse of the online retailer world. Stakeholders in this controversy are obviously the Shein company, the public, and in our discussion will be the U.S. public consumers of the Shein products. Women and children who are the primary workforce for Shein, and the general global community as the actions, policies, and practices from a company as big as Shein will ultimately affect the economy and other companies in the online retail world. So, let's start from the beginning to ensure we have all the facts about this. Shein is a China-based company. It was founded in 2008 by an entrepreneur and search engine optimization SEO marketing specialist, Qi Zhu. From the start, this was intended to be an online retailer that was able to reach far beyond China. In 2015, the business made the decision to focus primarily on fashion apparel. Then in 2020, COVID hit, people were quarantined, and they were home and bored. As we all know, what people do, especially young people do when they are stuck home and bored, they go online. They go on social media. People spend a crazy amount of time scrolling through social media, advertisements, and websites. But COVID was devastating to a lot of people. Many brick and mortar stores suffered great losses, some being forced to go out of business. This was the opposite for Shein. 2020 was a huge growth year. Shein made approximately $10 billion in 2020. Clearly, popularity soared for this company. Now back to social media. Trends started, and haul videos were free advertising for this company, which is pretty much just people going online, showing their clothes. Again, people were home and bored. They just ordered some Shein clothing items, and now they're going to occupy their time by doing, by trying on their super cheap new wardrobe. The low prices helped too. COVID had some people experiencing some financial struggles, so they jumped on Shein's website, ordered three new outfits, completed with a pair of earrings, some hair ties, maybe a pair of shoes, and they managed to only spend $60. It's a win for everyone, right? Unfortunately, it's not that simple. As the company rose to popularity and people were talking about the rock bottom pricing, questions started to arise. How is a company able to make profit off of clothing that is being charged $7 for something? That would typically be $40 to $50. Rumors and accusations of the company using forced labor or violating child labor laws started circulating. One of the laws in the middle of this debate is the 2020 Uyghur Forced Labor Prevention Act. This law was put into place to protect a specific area of China that historically utilizes forced labor. Uyghurs is a group of Muslims that are faced with high levels of discrimination and abuse within China. These people are basically detainees and forced to work as laborers to produce textiles. They are mistreated, receive little to no pay, and have no choice in the work they do. There are also currently child labor laws in China that state you must be 16 in order to legally work. The United States has laws in place that we should be only doing business and allowing imports from countries and companies who are following laws in place and live up to the U.S. standard of basic human rights. As a company, Sheen states that they follow all these laws in place, do not use child labor laws or pay fair wages. They state they are committed to transparency and are moving in a positive direction to not only continue to care about the Chinese citizens that work in their factories but also commit to reducing their carbon footprint, have less waste, and improve their emissions. Sheen states they have no suppliers in the Xinjiang region where the Uyghurs people have experienced forced labor. They also state there is no proof that they do not have suppliers in this area. Sheen states they have a zero tolerance for forced labor. Sheen explains their business model has allowed the company to keep down prices and grow in popularity. Their business model includes outsourcing labor to countries and regions where wages are cheaper. The company acknowledges this fact but stands by the fact that they may use cheap labor but everyone is paid a fair wage. They use no forced labor and no child labor. Additionally, their sales plan includes direct to consumer and they do not have a physical store. This online environment allows the company to keep operating expenses low. Sheen is also considered a fast fashion brand. This means they produce a large number of new items and only produce a small quantity of them. Then they only mass produce the items that are selling. As we stated before, Sheen relies heavily on social media for advertising. A sign of their commitment to transparency was in inviting several social media influencers to tour Sheen's facilities and factories. The initial reporting from the social media influencers were positive. Facilities were clean and the workers were happy. Sheen stands by the fact that these rumors are unfounded and they are being targeted purely because they are profitable. But on the other side of this debate is the U.S. officials and the U.S. consumers. The critics of Sheen claim it is impossible to offer products at the prices that Sheen is charging without breaking the existing labor laws in place by using forced labor, paying unfair wages, using child labor, violating other human rights, stealing other designers' work and using potentially hazardous materials. China has a history of utilizing child labor, forced labor and unfair labor practices. Critics also cite the lack of transparency from Sheen despite the commitment to transparency statement for Sheen. There is no official evaluation of the company available. Sheen claims they treat their workers fair, pay a fair wage and provide benefits above the industry average. But these statements remain just a claim. There is no specific information to support or deny this claim. There have been reports that were made public that we can refer to. The 2021 Sustainability and Social Impact Report showed two-thirds of Sheen suppliers' facilities have a mediocre performance. This means there are one to three major risks in the workplace, some of which are so severe they fall under the needs-immediate-action category. Some of the top violations include safety issues related to fire and emergency procedure, working hours and recruitment compliance. Although not all information is available, this information leads people to put more value on the labor violation rumors. We talked earlier about the social media influencers to visit the Sheen factories. This was planned by and paid for and scheduled by Sheen itself. The influencers were shown a small portion of the factories. This isn't exactly the equivalent of an audit or surprise examinations of the facilities. These influencers were shown what Sheen wanted them to see. The UX critics of Sheen completely discount any findings that came out of that visit. So there are some of the facts. Do you want my opinion? Of course you do. They're just saying of where there's smoke, there's fire. To me, it seems highly unlikely that Sheen is operating as they say they are. The price differential is really hard to ignore. I'm not even talking about comparing a designer shirt from Gucci to a shirt from Sheen, but let's compare a store like Old Navy. Old Navy has a similar mindset to Sheen. It tries to copy the higher end style and do it at a discount price. But even Old Navy's prices are double Sheen or more. And we aren't even considering the fact that Sheen has to ship the clothes to the U.S. With the lack of concrete information available, no one can say exactly what's going on. But there has to be a reason for these prices. I will not say I never order from Sheen. I have. I love a bargain just as much as the next person. But when these rumors surface, I think a lot of people are starting to question how much is this bargain actually costing someone else. Are their children working in sweatshops? Is their woman forced to be working 18 hours a day and being paid pennies? If you search the Sheen website, there are so many items to choose from and they are delivered to the other side of the world within days. When you stop to think about it, how is that even possible? The lack of information available is concerning. Sheen wants to say, oh no, we don't do that or we have zero tolerance for forced labor. But there is nothing proving anything either way. I guess you could say I'm being negative by saying I think Sheen is utilizing some questionable practices to gain a large market share and maximize their profit. Sheen profited from social media platforms in the beginning. But now social media may be negatively affecting their company. There are several TikTok influencers and news sources that discuss the alleged forced labor. This causes consumers to think deeper and question the company. And consumers in general tend to demand answers. As quick as Sheen gained popularity from social media, the negative rumors and allegations are spreading just as quickly. But this all goes back to the fact that they are just allegations and Sheen just states they are not true. In real life, she said scenario. There are ways to independently obtain more information regarding this topic. There is testing that can be done to clothing to see where they are originating from. This would be a start to just confirming or denying the claims of forced child labor laws from the Xinjiang area of China. Sheen has directly stated that there is no labor from the area that uses the Muslim slaves. This testing could confirm or deny this claim. The United States should demand actual reports conducted independent agencies of financial and physical inspections of all Sheen factories and facilities, not just the ones hand-selected by Sheen. Sheen has plans to expand into the U.S. and the initial public offering in the United States is being discussed. Answers to these human rights questions should be definitely answered prior to this company being permitted to expand further into the United States. Sheen should be held accountable to prove their practices are in line with current laws in place. They should not be able to profit from stripping someone else's basic human rights.