From Shein's global rise and potential IPO to a worldwide tech crash

Shein could be headed to list on the London Stock Exchange.

🤔What’s going on?

Over the past decade, a handful of Chinese companies have seen a lot of success outside of home. One of the biggest examples is ByteDance’s TikTok. There’s also Tencent, Alibaba and BYD. But there’s another one that’s dominated headlines worldwide. Whether it’s because of its highly-anticipated initial public offering (IPO) or another copyright infringement lawsuit – yep, you guessed it, Shein.

Shein, an online fast fashion brand founded in China and now headquartered in Singapore, filed confidential paperwork in the UK in June suggesting that it may list on the London Stock Exchange soon. This comes after the brand walked back its plans to list in New York because of tensions between the US and China. And while Shein is no longer headquartered in China, its manufacturing and employment operations are still largely based in the mainland.

The potential IPO has turned the spotlight onto the world of online fashion, which is still adjusting to the post-pandemic boom when lockdowns and social distancing created a massive demand for online shopping. Specifically, according to The Business Research Company, the global online fashion industry market size is expected to top US$905 billion in 2024, compared to US$821 billion in 2023. But, with this growth, it begs the question, what impact does fashion, particularly fast fashion – have on the environment?

🌍The environmental impact of fast fashion

Shein hit a record of over US$2 billion in profits in 2023, which was more than double what it made in 2022, and it recorded a gross merchandise value of around US$45 billion, according to the Financial Times. In May, the Startup Success Index by Vention named Shein the most successful startup of the past decade.

But it also might be the most extreme example of fast fashion, a business model based on the quick production of cheap, trendy clothing. For example, Shein can have as many as 600,000 products listed for sale at a time. To put this into perspective, Wired reported in 2022 that Sheng Lu, a professor at the University of Delaware, had compared different fast fashion brands over a 12-month period. Lu found that during this period, the Gap listed about 12,000 different items on its website, H&M had about 25,000 and Zara had roughly 35,000. But in the same period, Shein had 1.3 million.

In recent years, fast fashion as an industry has been heavily criticized for its environmental impact. It’s estimated that 92 million tonnes of textiles are thrown away every year and that many pieces of clothing are only used seven to 10 times before being tossed out. According to a 2017 report by the Ellen MacArthur Foundation, the number of times a piece of clothing was worn dropped 36% over a span of 15 years.

Products used in the dyeing and finishing process of textiles are estimated to make up 20% of global water pollution, and the world’s fashion industry has also been estimated to contribute 10% to global emissions, a number that is expected to rise by 50% before 2030 if things keep going the way they are. And even though there’s growing awareness of climate change and the need to protect biodiversity, the market size of the global textile manufacturing industry more than doubled between 2000 and 2020.

Rebecca Ling, the founder of Parallel 51, an online-to-offline fashion brand that focuses on long-lasting and re-wearable wardrobes, told TMS that Shein’s fast fashion is “so extreme” that even people who are not necessarily thinking about sustainable fashion are sitting up and asking themselves, “What impact will [that form of shopping] have on the environment?”

“I think for people who are on the fence [about fast fashion], who may want to think about their shopping habits, a brand like Shein maybe will make them think twice about the impact that fast fashion is having,” she said.

Shein appears to be very aware of the sustainability concerns surrounding its brand, and the company launched a nearly €200 million (US$218 million) “circularity fund” to tackle fashion waste. The goal of that money is to inject cash into startups trying to solve the problem. Shein has also started using recycled materials and recyclable packaging. And, while the brand can have hundreds of thousands of items up for sale at a time, it has said it only produces small batches (50-100) at a time, producing more only when people order it. Items that don’t generate a lot of interest are then discontinued. In this way, Shein has said it’s business model differs from typical fast fashion because it’s producing “on demand.”

👗Finding sustainable solutions

While Shein and other fast fashion retailers face concerns about sustainability, many online fashion brands are actively trying to promote alternative, more sustainable mindsets for e-commerce. Parallel 51, for example, sells “multi-wear designs” that are meant to be “functional fashion” designed to prevent closet churn, which is essentially when you have stuff constantly cycling through your wardrobe. The brand also doesn’t ask manufacturers to dye clothing, helping to reduce water pollution.

“I think it's about little choices that you can make in the manufacturing process that will then have an impact from the sustainability perspective,” said Ling.

Another example of a sustainability-focused brand is Vestiaire Collective, which sells pre-loved luxury items and aims to create a more circular production cycle. The company focuses on reselling items but also tries to sell goods locally, dropping its usage of air freight from 50% of deliveries in 2020 to 31% in 2023.

“In today’s climate of inflation, it is obvious: neither people nor planet can afford fast fashion. This report sounds the alarm on fast fashion’s devastating impact, and should be a wake-up call to all to end overconsumption and overspending,” wrote Vestiaire President and Co-founder Fanny Moizant in the company’s 2024 circularity report.

Infinite Goods, a brand focused on women’s fashion, has made sustainability a core part of its mission statement. It has launched a self-reported sustainability score, in which it grades itself on metrics for environmental impact and an ethical workforce along the supply line. For example, it has graded 45% of its products with an “A” rating, 45% with a “B” rating and 10% with a “C” rating.

But sustainability takes trial and error, and Ling pointed out that “no brand is sustainable from day one.” “It's a journey for us, and we're trying to take it step by step to reach 100% sustainability goals,” she said.

❓What’s going on with fast fashion in China?

As Shein expands its footprint globally, domestic fast fashion brands are thriving in China. A recent report from Canvas8, a global strategic insights practice with expertise in cultural and behavioral trends, found that the growth of homegrown online fashion features a fairly specific phenomenon: China is currently experiencing a guochao or “national wave” movement. This movement, which is being actively promoted by mainland authorities, refers to the growing trend of Chinese shoppers (especially millennials and Gen-Z) preferring local companies that embrace elements of traditional Chinese culture and style.

The trend has led to young people embracing fashion trends like hanfu, a catch-all phrase that refers to traditional Han Chinese clothing. It also has meant Chinese shoppers are avoiding foreign brands and trying to spend their money locally, with Canvas8 reporting that “49% of shoppers in China prefer or only consider domestic brands when purchasing clothing, shoes, and/or hats.”

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Some of the biggest Headlines this week

📰Israel/Gaza update: On Thursday, Israel’s Parliament voted against the formation of a Palestinian state, saying it would “encourage Hamas and its supporters.” Israel Prime Minister Benjamin Netanyahu is also scheduled to visit Washington next week to address the US Congress. Meanwhile, early on Friday, Yemen-based Houthi rebels launched a drone attack on Tel Aviv, killing at least one and injuring eight others.

📩US election update: Last weekend, there was an assassination attempt on former President Donald Trump at a rally in the US. Trump’s ear was grazed by a bullet, but he was otherwise uninjured, while one victim was killed and two others were badly wounded. The shooter, 20-year-old Thomas Matthew Crooks, was killed by the Secret Service after he opened fire. The shooting is still being investigated, with more details of Crooks’ plans before the shooting coming out.
News also came out that, in recent weeks, US authorities received intel on an Iran-backed assassination plan targeting Trump, and security was ramped up.

On Thursday, Trump formally accepted the US Republican presidential nomination. Meanwhile, many news outlets are reporting that current President Joe Biden is starting to consider dropping out of the race, with pressure mounting on him since the Trump/Biden debate. Biden is also currently isolating at home after testing positive for COVID.

💻Global tech crash: Computers and IT infrastructure went down all around the world on Friday, with thousands of flights canceled and government offices, jails, hospitals and businesses disrupted because of technical issues. It even took down the London Stock Exchange. The chaos was caused by a software update by US-based cybersecurity company CrowdStrike. The software is used by tons of businesses, governments and computer systems all over the world, so the disruption was widespread.

🍸Asia’s Best Bars: Asia’s 50 Best Bars list for 2024 has come out, and a Hong Kong joint made the top spot. Bar Leone, an Italian cocktail bar, took the No. 1 spot on the list. While Bar Leone beat out Jay Khan’s COA, which was No. 1 for three years in a row, Khan’s newest venture, The Savory Project, was named the year’s best opening. Hong Kong's rival Singapore also did well, with eleven bars in the city-state making the Top 50.

🏳️‍🌈South Korea LGBTQ+ ruling: On Thursday, South Korea’s Supreme Court ruled that same-sex couples are eligible for the national health insurance’s dependent coverage. Some activists are hoping this is a step in the direction of legalizing same-sex marriage in the country.

💈Hong Kong hair products harmful: Hong Kong’s Consumer Council announced on Monday that it had tested 50 local hair products, including hair waxes and finishing sprays, and found 48 of them to contain at least one harmful ingredient. Some of the products contain chemicals in amounts that exceed international standards, and some of the chemicals may affect sexual function and fertility.

🍜China’s protein numbers: China has officially beaten the US in how much protein its people have access to, which is considered a modern factor of quality of life. According to the UN Food and Agriculture Organization (FAO), China surpassed had a daily supply of 124.61 grams (4.39 ounces) of protein per capita in 2021, while the US came in at 124.33 grams (4.38 ounces). But, interestingly, China’s supply of protein came more from vegetal sources, with vegetables, fruits, beans, nuts, seeds and wheat, oat, rice, barley, maize and their products making up 60.5%. Although China is the world’s biggest consumer of animal protein because of the sheer size of its population, Americans typically eat more meat, with animal products like meat, fish, eggs, and dairy making up 69% of the nation’s protein supply in 2021.

💼Viral Cathay Pacific video: Hong Kong airliner Cathay Pacific has apologized after a video went viral of one of its staff roughly handling luggage and throwing it down some stairs. Cathay said the worker in the video has been transferred out of the position while it completes an investigation into the incident. The company also pledged to increase training and oversight to avoid something like this happening again.

😃Macau QR pass: Hong Kongers can now enter Macau using QR codes with fingerprint and facial recognition screenings. Residents just need to register for the “contactless e-channel” service on the city’s mobile app. “The new QR code clearance service between Hong Kong and Macau will further improve the quality of immigration clearance services on both sides to integrate into the important national strategy of the Greater Bay Area,” Director of Immigration Benson Kwok Joon-fung said on Thursday.

🐊Croc eggs: In Cambodia, scientists found 106 rare Siamese crocodile eggs, and a total of 60 of them were successfully hatched. The species is one of the world’s rarest crocodiles and is critically endangered, and officials have called it the biggest discovery in the past 20 years. See the little guys hatching in the post here.