How are their prices so low?
Shein and Temu keep their prices low through a U.S. shipping provision called the “de minimis exception,” which waives duty fees for any packages with a retail value of less than $800. Shein and Temu packages rarely reach the de minimis maximum – the average Shein shopper spends $100 per month and the average Temu order size is $25.
According to the June congressional report, Shein and Temu paid no duty fees on imports to the U.S. in 2022. In comparison, H&M paid $205 million.
Another way companies like Shein and Temu keep their prices low is by using garment workers, typically in Southeast Asia, who work long hours for low pay and typically without an employment contract.
The compressed trend cycles of fast fashion lends itself to exploiting workers, Katebi said.
“The sheer volume of clothes that fast fashion requires to meet their 52-season-a-year calendar and the quotas that are placed on garment workers to create these clothes are actually humanly impossible,” said Katebi, who has spoken with garment workers in Indonesia, India, and Cambodia.
Garment workers often end up working 14- to 16-hour days, seven days a week.
“During peak season, they may work until 2 or 3 am to meet the fashion brand's deadline,” according to Berlin-based nonprofit Sustain Your Style. “Their basic wages are so low that they cannot refuse overtime - aside from the fact that many would be fired if they refused to work overtime. In some cases, overtime is not even paid at all.”
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Why are the companies under investigation by Congress?
Both Shein and Temu have been accused by a House committee of using forced labor from the autonomous region of Xinjiang in China. According to the U.S. State Department, 12 million Uyghurs, Turkic-speaking Muslims, live in Xinjiang and are native to the region.
