The report comes just a week after a bipartisan group of Congressional lawmakers wrote a letter to the US Securities and Exchange Commission (SEC) demanding increased scrutiny of Shein’s business practices.
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“There are credible allegations of the company’s use of underpaid and forced labor in the Xinjiang Uyghur Autonomous Region,” the letter said, also asking the SEC to independently verify that Shein doesn’t use forced labor before allowing it to launch an IPO in the US.
The USCC report also cites numerous lawsuits against the company for blatantly copying high-fashion designs with low-priced materials, as well as alleging that it dodges US tariff and customs inspections to keep the price of its products low.
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The USCC expressessimilar concerns about the business practices of Temu, a Shein competitor that lets American consumers buy products directly from Chinese warehouses. Temu has surged in popularity this year, becoming the most popular download in the iOS app store for a four-month period last fall.
Quotable:
“Shein and similar firms serve as a case study of Chinese e-commerce platforms outmaneuvering regulators to grow a dominant U.S. market presence.” —The USCC report, alleging that Shein’s financial success largely stems from skirting business regulations
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Shein’s market dominance: by the digits
#1: Shein holds the largest market share in the US fast-fashion industry.
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.
The company is currently under investigation by the House Select Committee on the Chinese Communist Party, which has also accused Shein of evading U.S. tariff law. The probe comes as U.S. lawmakers from both parties increasingly scrutinize companies from China or those with potential ties to its government.
In August, Republican attorneys general from 16 U.S. states asked the Securities and Exchange Commission to audit Shein's supply chain for the alleged use of forced labour ahead of its potential IPO.
Most of the alleged abuses are linked not to the modernized factories visited by the group of influencers in Guangzhou, but to Shein's supply chain in the Xinjiang region of China, where human rights abuses against the Uyghur minority have been widely documented. The U.S. banned imports from the region in 2021.
The fast-fashion company has come under fire for accusations of mistreatment of Uyghurs, a marginalized group in China, and for allegedly falsifying reports of forced or underpaid labor of its supplier factories, some of which are allegedly located in the Xinjiang Uyghur Autonomous Region of China.
Are Shein Clothes Toxic? In simple words, Shein clothes are not exactly toxic. That means the users face very little threat of getting sick by wearing them. However, Shein has faced criticism for a variety of environmental and ethical issues for using elevated levels of harsh chemicals in clothes.
Shein denies using forced labor, but the UFLPA designates all products from Xinjiang under that category because of human rights abuses against the minority Uyghur population.
In one factory, Channel 4 found that workers receive a base salary of 4,000 yuan per month — roughly $556 — to make 500 pieces of clothing per day, and that their first month's pay is withheld from them; in another factory, workers received the equivalent of four cents per item.
However, despite Shein offering a secure shopping experience, it is surrounded by controversy that may make you weigh your purchasing choices. It raises ethical concerns over business practices and labor conditions, while its fast fashion model sparks debate over sustainability and the environmental impact.
Concerns have been raised about the use of sweatshops and child labor in Shein's supply chain. Workers are often paid pennies per garment, definitely not a fair wage! By shopping from such brands, we aren saying that these exploitative labor practices are ok.
Microsoft discovered that a version of the Shein Android app was accessing users' clipboard activity and periodically reading it. The news is alarming, especially considering the Shein app has been downloaded over 100 million times on the Google Play Store.
In the same month, three independent designers, Krista Perry, Larissa Martinez, and Jay Baron, filed a suit in the US alleging that Shein sold “exact copies” of their work and that doing this is “part and parcel of Shein's 'design' process and organizational DNA”.
As Muslims worldwide celebrate Eid al-Fitr, the end of the holy month of Ramadan, Chicago-based human rights organization Justice for All has called on Muslim women to boycott Shein, alleging it is involved in the forced labor of Uyghur Muslims in China.
None of Shein's supply chain is certified by labour standards which ensure worker health and safety, living wages or other labour rights. There is no evidence it ensures payment of a living wage in its supply chain. It uses few eco-friendly materials.
Their direct-to-consumer model, minimal overhead costs, cost-effective marketing strategy, fast fashion business model, global manufacturing and shipping, and economies of scale all contribute to their ability to offer products at lower prices compared to traditional retailers.
"We have zero tolerance for forced labor. We have zero tolerance for child labor," says Shein's Pernot-Day, adding that the company requires its manufacturers to comply with their local laws. Some of Shein's 5,000-some manufacturers are now in Brazil and Turkey, but most remain in China.
In October 2022, Chinese fast-fashion conglomerate Shein once again found itself facing allegations of unethical business practices, just another on their long laundry list of wrongdoings that include copying small businesses, allegations of modern slavery and violating labour laws.
Shein, a global fast-fashion giant based in China, faces a boycott campaign amid allegations of Uyghur forced labor. Justice for All, a human rights organization, calls on Muslim women to boycott Shein during Eid al-Fitr, alleging its involvement in Uyghur forced labor.
Introduction: My name is Barbera Armstrong, I am a lovely, delightful, cooperative, funny, enchanting, vivacious, tender person who loves writing and wants to share my knowledge and understanding with you.
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