Shein Says Its Getting Better, But Where’s the Data?
“I work every day from 8 in the morning to 10.30 at night and take one day off each month. I can’t afford any more days off because it costs too much.”
Those are the translated words of a veteran sewing machine operator who has been stitching turn-up seams for Shein products on a piece-rate, that is, item-by-item, basis. Toiling at a production facility west of a hub in Nancun, Guangzhou, known colloquially as “Shein village,” the man is one of 13 textile workers that Swiss watchdog group Public Eye interviewed last summer, two years after it found widespread evidence of excessive overtime, poverty wages and unsafe conditions at the e-tail Goliath’s Chinese suppliers, often in violation of local labor strictures.
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In the time since, there are few signs that anything has changed, said David Hachfeld, Public Eye’s textiles expert. Certainly, his organization’s report appeared to barely move the needle when Shein failed to follow up a claim that it would investigate the allegations, Hachfeld said. An October 2022 exposé by Britain’s Channel 4 claiming that workers in China were making Shein products for pennies per garment, however, was more promising. While the Singapore-headquartered company said that an independent review conducted by Intertek and TÜV Rheinland “refuted” most of the accusations, they did reveal an issue with excessive overtime, albeit less acute than the 18-hour days suggested by the documentary.
That December, Shein announced that it would be shelling out $15 million, then later $70 million, over the next few years in factory improvements, including a multichannel feedback system for workers to submit complaints and suggestions via email, phone or WeChat. TikTok’s “hauliest” brand also said that it would be doubling the $2 million it currently invests in its Shein Responsible Sourcing program—a decision wholly unrelated to Channel 4’s viral program, it said—and ramping up the frequency of independent factory audits, including unannounced spot-checks, and training sessions about its code of conduct.
Piqued by Shein’s insistence that “wages are so good,” as Hachfeld described it, Public Eye decided to revisit its 2021 investigation. Shein doesn’t publish a supplier list, which means that the nonprofit was only able to identify six Guangzhou-area factories as exclusive or semi-exclusive Shein contractors based on the workers’ responses and products that were visible on the production floors. And though the factories were different, workers still reported an average 12-hour workday, minus lunch and dinner breaks, that repeated six or seven times a week. In other words, the 75-hour workweeks that the original investigation uncovered are not only “still the norm,” he said, but they also continue to flout Shein’s stipulation that employees must work less than 60 hours a week, including overtime, with at least one day off every seven days.
In the factories that Public Eye visited, investigators encountered workers with lit cigarettes in stairwells and the entrances of fabric warehouses. Most of the products and fabrics were found stacked on the floor, increasing fire risk.
Wages hardly budged either, Public Eye found. Interviewees gave similar numbers to those in the 2021 report, or somewhere between 6,000 and 10,000 yuan ($829 and $1,382) per month, depending on the number of pieces produced and the level of seasonal demand. A wage of 6,000 yuan might seem generous, Hachfeld said, but once broken down to a “normal” 40 hours and divested of overtime pay, the basic wage amounts to only 2,400 yuan ($332), slightly better than Guangzhou’s 2,300 yuan ($318) minimum wage but just one-third of the 6,512 yuan ($900) that the Asia Floor Wage Alliance estimates would cover a family’s basic needs.
Workers can also be punished if their sewing quality doesn’t meet “seemingly rigid quality controls,” which the report said was surprising for a low-cost brand not particularly known for unrelentingly high standards. One 50-year-old supervisor said that “whoever makes the mistake is responsible for putting it right…in your own working time.” Another worker said that quality controllers could be fined between 300 and 1,000 yuan ($41 and $138) if the batches they oversaw were deemed sub-par. For a workforce that is paid by the number of items produced, this practice is likely to generate even more pressure on employees, Public Eye said.
Hachfeld said that his organization tried to find factories that were covered under Shein’s overhaul, but it didn’t have any luck and the Forever 21 stakeholder wasn’t forthcoming with names. Neither was it able to view any of the audit reports that concluded that Shein suppliers in southern China offered above-average salaries. Any “online summaries” that are on the company’s website appear to cherry-pick data, he said, for instance trumping up the highest wage but not mentioning the lowest or even the average, which would provide a clearer picture of any potential rights violations. There’s also a tendency for information to appear and disappear on Shein’s corporate homepage, Hachfeld said, though the firm says that this is inadvertent due to revisions of its website.
Shein cast doubts on Public Eye’s findings, suggesting that a sample of 13 workers is too small to judge the “comprehensive ongoing” work it does with “thousands of suppliers and workers within the supply chain.” The Temu rival said that it’s investing tens of millions of dollars in bolstering governance and compliance in its operations, as well as “empowering” suppliers to build more successful and responsible businesses—efforts that are “already delivering results,” according to its regular supplier audits.
“While we do not recognize many of the allegations in this report, the discussion on working hours and wages raised by Public Eye is important to us, and we have made significant progress on enhancing conditions across our ecosystem,” a spokesperson said. “This includes improvements in ensuring that workers are compensated fairly for what they do.”
Even so, Hachfeld wants to see more encompassing proof, not just individual data points that look good from a PR perspective. Public Eye also has questions about Shein’s opaque governance. Roadget Business in Singapore, taking over from Zoetop Business Company in Hong Kong, now seems to serve as its global headquarters. It, in turn, is owned by Beauty of Fashion Investment, which is based in the British Virgin Islands.
While Sky Xu, Shein’s enigmatic founder and CEO, holds a 37 percent stake in Roadget Business, according to Shein’s U.S. lobbying disclosure, who runs Beauty of Fashion Investment is unknown, and Shein did not provide any clarity in its response about the report. Adding another layer of mystery is the fact that Xu, who moved to Singapore from China, stepped down from Roadget’s board of directors last March, per documentation from the Singapore Commercial Register. Other subsidiaries also keep “popping up” all the time, such as Fashion Choice, which was founded in October 2021 and also manages sales in Switzerland.
This, plus an annual report for its 2022 financials that’s more than six months overdue, leaves room for a “lot of question marks,” though that hasn’t deterred venture capitalists who continue to pump billions into the company, Hachfeld said. Citibank, Barclays, and BNP Paribas have also recently granted Roadget loans for an “undisclosed amount,” according to Public Eye. The lack of transparency will have to change if Shein achieves its sought-after IPO, most likely in London as backlash from China hawks on Capitol Hill grows.
The bottom line? “So far we have no evidence that Shein is using their power to really do better in the supply chain,” Hachfeld said. But neither is it getting worse, he said, adding that “our evidence is more it seems like business as usual.” As large of a target as the ultra-fast-fashion purveyor is, it’s also not unique as an operator in China. Shein told Public Eye that overtime is an issue nationwide “which is not an excuse for not taking responsibility for it,” Hachfeld said. “But it’s still true.”
One thing that’s clear from his vantage point is that intensifying scrutiny from legislators in the United States and, more recently, France, is “incentivizing” Shein to pull more lobbyists into its corner. It hired its sixth firm—Ballard Partners—this week, according to Politico. The Romwe parent is also a member of the American Apparel & Footwear Association, though not the National Retail Federation, which has rejected its application several times, per a CNBC report on Monday. (Both the NRF and Shein declined to comment on the latter revelation.)
“If you look into the lobby disclosure reports and so on, you see that they have hired new staff doing lobby work for Shein, which indicates that they know they have to do something about it,” Hachfeld said, “it” referring to the company’s social and environmental impact.
But if Shein is making improvements as a riposte to its critics, it’s hard to say because “transparency would be required,” Hacheld said. The company is also built on driving overconsumption and overproduction, which he doesn’t see changing “any time soon.”
“They say they invest in new printing techniques that are water-saving. They say that they are investing in new materials which are more sustainable. And they have this factory improvement program which they say is having good results,” he said. “But they never present anything that would give us a chance to really make an assessment of how it really is. And if you are just making claims without being transparent, the risk that it’s greenwashing is quite high.”
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