SHEIN to Spend $15M on 'Improving Standards' at Factories Following Labor Abuse Claims

SHEIN, the global fast-fashion e-commerce company, said it would commit $15 billion to "improving standards" at suppliers' factories in the wake of allegations of labor exploitation among its factory workers in China. The Chinese company, which was founded in 2008 by entrepreneur Chris Xu, was recently the subject of a U.K. documentary that claimed employees at two SHEIN-contracted factories in China were working 18-hour days, paid little, and had some of their pay docked if any product was damaged. SHEIN refuted these claims, saying in a statement that all salaries are paid at the end of the contracted month and in accordance with local laws and regulations.

SHEIN said it carried out an independent investigation following the documentary's accusations and found that the workers in the garment factory supplying the brand worked a maximum of 13.5 hours per day — still more than is legally permitted by local law, according to The Verge.

"While these are significantly less than claimed in the documentary, they are still higher than local regulations permit," SHEIN said in a statement. "SHEIN has therefore given both suppliers until the end of December to rectify the situation and reserves the right to take action against them if they fail to do so by then. In the interim, SHEIN has reduced orders from the two producers by three-quarters until they fully comply with the code."

SHEIN said the $15 million investment would be used "on making physical enhancements to its suppliers' factories," with more than 30 projects to be completed by the end of the year, and 100 expected to be complete by the end of 2023. The apparel retailer also said it has implemented a "multichannel feedback system" for workers at its contracted factories, enabling workers to anonymously submit complaints, feedback, and suggestions via email, phone or WeChat.

Total Retail's Take: SHEIN, which was valued at $100 billion in April, has been in the ire of the fashion and activism worlds for its rapid production of lower-quality apparel at low prices even as it dominates the fast-fashion market and quickly gains new customers.

The media's deep dive into SHEIN's alleged treatment of factory garment workers has served to put a magnifying glass on the retailer's manufacturing processes. That scrutiny also certainly contributed to SHEIN's commitment of $15 billion to hopefully help address some of the labor issues showcased in the U.K. documentary. It remains to be seen how exactly SHEIN standards improvements at the factories will play out, but the first step of acknowledging the problem, and then committing resources to potentially resolve it, has taken place. That's a good first step.