Shein's mega-IPO could come unstitched as US lawmakers flag forced-labor concerns
Initial public audit… Shein may be preparing to go public this year, but the $64B fast-fashion phenom could be in a stitch as regulators dig into its production practices. Shein is America’s largest fast-fashion brand and could become one of the biggest Chinese companies to ever list in the US. But recently a group of bipartisan lawmakers urged the SEC to pause Shein’s IPO until they can prove it doesn’t use forced labor in China to make its clothes.
Shein’s been accused of mistreating Uyghurs workers (a marginalized minority in China) and falsifying reports of forced or underpaid labor at its supplier factories.
Shein says it has a “zero tolerance for forced labor.” But lawmakers want the SEC to order an independent audit (read: without China’s influence) of Shein’s labor practices.
Not buying it… As Shein’s US popularity skyrockets, so has scrutiny over what it takes to churn out thousands of cheap new styles listed on its site each day. Last year a Bloomberg report said that some of Shein's clothing contained cotton from China’s Xinjiang region. Governments and human-rights groups have accused China of running detention camps and forcing people to work in Xinjiang. Beijing denies that.
Fast commerce can breed fast solutions… and fast consequences. In addition to concerns over rights abuses, ultrafast-fashion brands like Shein have raised sustainability red flags. Shein alone contributes millions of tons of carbon emissions every year. But as consumers seek cheap convenience, fast-commerce competition is only growing: Shein’s China-based rival, Temu (picture: Wish.com meets Amazon), became the most-downloaded app in the US after its Super Bowl ad dropped back in February.