The Economic Impact of Consumer Purchases in Fast Fashion Stores (2024)

FAQs

What is the economic impact of fast fashion? ›

One of the biggest economic issues with fast fashion is the high production costs. This is also associated with producing millions of garments in a short amount of time. This includes labor costs, materials, machinery, energy used to create each garment, and transportation costs if the garments are produced overseas.

Fast fashion promotes the throwaway culture, excessive consumerism, and makes clothes disposable commodities. Many consumers make purchasing decisions based on their emotions. Retailers use that behavior and tap into the subconscious of consumers.

not paying fair living wages to workers, poor working conditions, child labor, environmental destruction from hazardous chemicals, plastic-derived materials, and increasing amounts of water pollution and textile waste.

It dries up water sources and pollutes rivers and streams, while 85% of all textiles go to dumps each year. Even washing clothes releases 500,000 tons of microfibres into the ocean each year, the equivalent of 50 billion plastic bottles.

Plastic fibres are polluting the oceans, the wastewater, toxic dyes, and the exploitation of underpaid workers. Fast fashion is big business, and while the environmental costs are rising, experts say there is another way: a circular economy for textiles.

The economics of clothing involve three processes: production, making the clothing; distribution, getting the clothing from the maker to the consumer; and consumption, actually using the clothing. Although consumption drives production and distribution, the three processes are in many ways inseparable.

The pressure to reduce costs and speed up production time means environmental corners are more likely to be cut. Fast fashion's negative impact includes its use of cheap, toxic textile dyes—making the fashion industry the one of the largest polluters of clean water globally, right up there with agriculture.

Fast fashion is an industry that is benefiting from the high levels of consumerism that have been normalized in our culture. The term “fast fashion” refers to clothing brands that have high production rates for products that are mass-produced at a rapid pace and sold to customers at a low price.

The issue of fast fashion can be traced back to the unethical business practices of corporations and companies. The preceding reason as to why companies are primarily responsible for fast fashion is because not every consumer can avoid it. Many consumers cannot afford to buy ethically produced fashion.

While not illegal, the fast fashion business model is unethical for several reasons; child labour, modern slavery, toxic dyes, mass manufacturing, unsustainable materials, in the process generating a significant amount of waste and pollution.

What is the biggest problem with fast fashion? ›

Many of the clothes bought are thrown away after being worn just a handful of times: the industry produces an estimated 92 million tonnes of textiles waste annually, much of which is burnt or finds its way to landfill, while less than 1% of used clothing is recycled into new garments.

Fast fashion leaves a large carbon footprint at each stage of manufacturing. For example, polyester, is made from petroleum, a fossil fuel that contributes to global warming. When polyester clothing is washed, tiny microplastics seep into the water supply and endanger human health.

In addition to degrading in landfills or being incinerated, fast fashion clothing has also become a notorious source of microplastics in marine environments as the cheap, plastic-based materials shed fibers that make their way to the oceans.

For example, profit margins for typical apparel specialty stores are 7 % whereas, fast fashion retailers are 16%, more than double that of comparable stores (Sull & Turconi, 2008). Growth rate is also much higher for fast fashion retailers.

These small businesses are far more easily affected by more factors, such as change in trends and climate change. Additionally, the fast fashion companies stealing designs from small businesses further hinders the original designers of those products from profiting at all from their own work.

If we check out the historical background of the development of the fashion industry, we will find that from time-to-time, economic factors such as recession, inflation, the national economic policy, and of course, economic growth have profound influence over fashion.

Economic Impact

According to a 2022 report by Statista, the global fashion industry was valued at approximately $1.53 trillion. The industry provides employment opportunities to millions of people worldwide, from designers and artisans to retail workers and logistic experts.

Social factors affecting fashion include cultures, norms, lifestyle, demographics and population changes. For example, a small clothing manufacturer needs to create styles that appeal to those of different cultures, especially if those cultural groups represent large enough segments of its market.

Fast fashion accelerates supply chains and drives costs down to meet constantly evolving consumers' demands. Fast fashion brands and retailers employ factories in faraway countries where labor costs are very low. They offer jobs to local underdeveloped communities trying to make a living.

Greenhouse Gasses

Per year, the industry contributes 1.2 billion tons of carbon dioxide into the atmosphere. By the year 2030, it is predicted that total greenhouse gas emissions will increase by 50%. One reason why fast fashion exacerbates climate change is through clothing and textile waste.

Why do people buy fast fashion? ›

Affordability is a major factor that drives consumers to choose fast fashion over sustainable options. While some brands offer more affordable sustainably-made items, fast fashion brands can produce garments at a much lower cost than sustainable fashion brands, allowing them to sell their products at a lower price.

But overall sales in this sector are falling. Women under 35 are the largest target demographic for fast fashion retailers. 54% of people believe that social media influencers have been at least partly responsible for the rise in mass-produced clothing. This figure rises to 73% of people aged 18-24.

The target audience for fast fashion is consumers aged between 18 and 24, while women and young girls consume fast fashion more than any other demographic group.

Because capitalism has created an environment that only rewards the rich and successful, fast fashion brands have not only become the norm where the average consumer shops for their clothes, it has become the fashion industry business model blueprint.

There are many advantages of fast fashion for consumers. But fast fashion is very harmful to the environment and workers in supply chains. By boycotting fast fashion, you feel so much better about your purchase decisions. You are making an immense positive impact on fashion as a whole.

Fast Fashion Statistics Trends

The Fast Fashion Market size was valued at $122,257.5 Million in 2021 and is projected to reach $283,457.5 million by 2030; growing at a CAGR of 10.13% from 2023 to 2030. The Fast Fashion Market is also driven by the growing youth population's demand for affordable clothing.

92 Million Tonnes of Textiles Waste is Produced Every Year

Of the 100 billion garments produced each year, 92 million tonnes end up in landfills. To put things in perspective, this means that the equivalent of a rubbish truck full of clothes ends up on landfill sites every second.

Critics assert that fast fashion apparel cannot be sustainable by its very nature. The poor quality of the material makes it hard to recycle, even if the brands commit to recycling a certain percentage of used or unsold products.

Fast fashion causes environmental poverty through a volatile combination of water, chemicals and waste. Fast fashion “is responsible for the emission of 1.715 million tons of CO2 [and]79 billion cubic meters of water” every year.

What is the dark side of fast fashion? ›

Fast fashion relies heavily on the production of cheap, low-quality clothing made from materials such as polyester, which is derived from fossil fuels. The production of polyester requires large amounts of water and energy, contributing to water pollution and greenhouse gas emissions.

Fast fashion companies thrive off of cheap textile production on a mass scale, mostly outsourced from China and India. These inexpensive materials include mostly synthetic polyester (the least expensive textile to produce), cotton, elastane, viscose and nylon.

There are four main types of externalities: positive production, positive consumption, negative production, and negative consumption.

Globally, the fashion industry is the second most polluting industry after the oil and gas sector. Responsible for 1.2 billion tonnes of greenhouse gas emissions annually, every UK household, as a result of their clothing consumption, produces the equivalent emissions of driving a modern car for 6,000 miles.

Major players in the fast fashion market are Zara (Inditex), H&M Group, Fast Retailing (Uniqlo), Gap, Forever 21, Mango, Esprit, Primark, New Look, and River Island. The fast fashion market consists of sales of polyester, acrylic, and nylon.

Fast fashion is sold cheaply, so the brands have make it cheaply in order to turn a profit. Many countries don't have the kind of labor laws that the U.S. does and often even the laws they have aren't enforced. Fast-fashion brands, particularly Forever 21, hire workers in a sweatshop environment to make their clothing.

These garment producers are caught in the never-ending cycle to rapidly produce the newest clothes at lowest cost for consumers. As a result, many garment producers, manufacturers and retailers sacrifice workers' wages to ensure that they can make a profit.

Other times Shein has blatantly copied independent designer's designs and ALSO copied the model and the styling: Check out designer Mariama Diallo's tweet below: Not only does the dress look the same, but the model is also black. Don't think it's a coincidence?

The fast fashion business model is based on flexible design and responsiveness. Unlike more traditional clothing retailers and fashion houses, fast fashion companies are able to roll out a large number of styles per season and respond quickly to market demand for their products.

Where does Shein get their items? ›

Originally, everything on the site shipped directly from China. Now, the clothing on Shein comes from several wholesale warehouses around the world. Although many items still ship directly from Chinese factories, local places offer shorter waiting times for the same products.

It draws in thousands of people, generating about $887 million per year. In addition, fashion week brings in $11 billion in wages and $2 billion in tax revenue annually. This industry opens jobs in marketing, design, research, manufacturing, and more.

The textile and clothing industry is a major contributor to economies around the world and is estimated to be worth over $3 trillion and employs 300 million people, many of them women (Hiller, 2021; UN Alliance for Sustainable Fashion, 2021).

The pressure to reduce costs and speed up production time means environmental corners are more likely to be cut. Fast fashion's negative impact includes its use of cheap, toxic textile dyes—making the fashion industry the one of the largest polluters of clean water globally, right up there with agriculture.

As a market that's valued at well over a trillion dollars and accounts for 2% of the global GDP, the power that fashion holds is clear. Around 430 million people have built their careers in apparel, from working in production to being fashion designers.

In a circular economy for fashion, everyone has access to the clothes they need, when they need them. New business models give customers more flexibility on the clothes they'd like to wear and provide access to clothes that might not be affordable through traditional sales.

The waste that results from fast fashion is enormous. Not only production waste but also consumer waste. An average person in Canada sends about 81 pounds of textiles to landfill every year. In North America, we trash 9.5 million tons of clothing annually, creating massive textile waste.

Fast fashion brands place orders of high quantities of garments to their manufacturer which reduces the price per item. This also means that the fabric and accessories (like zippers, buttons) can be ordered in bulk, reducing the cost per garment even more.

Fast Fashion in Numbers

US$100 billion: The total cost of materials lost every year as less than 1% of the textiles produced for clothing is recycled into new clothing. 93 billion cubic metres: The amount of water used in textile production every year, including cotton farming.