Shein: Ultra-Fast Fashion's ESG Challenges

Shein, a rapidly growing international e-commerce giant based in China, strategically positioned itself as a dominant player in the fast fashion industry by catering to Gen Z customers with stylish and affordable offerings. The brand benefitted from a forward-thinking digital business model that harnessed big data analysis and social media marketing, ensuring deep consumer insights and accurate market demand predictions. Moreover, its seamless integration with supplier networks bolstered its supply chain agility and enabled it to enhance customer experiences through tailored product recommendations. Despite its success, Shein faced scrutiny for labour exploitation, design infringement, and broader environmental, social, and governance (ESG) challenges inherent to the fast-fashion industry. Under pressure from investors and targeting a potential public listing, Shein embarked on an ethical transformation, aligning with international labour conventions and local regulations to improve its ESG standing. This case underscored Shein’s complex challenge as it strived to harmonize sustainability with commercial profitability. It also introduced the ESG strategies Shein had adopted until then. The crucial question remained: How could Shein leverage its digital innovations to transform into a sustainable and ethical global operator? Particularly within the context of Sino-US tensions, what strategies should the company employ to secure a higher valuation and establish itself as a responsible industry player while pursuing a successful initial public offering?

The case is suitable for undergraduate or graduate courses exploring the challenges of ESG in the context of business enterprises, sustainable development, and strategies for mitigating backlash. The case provides students with the opportunity to explore a novel fast-fashion e-commerce business model, understand the ESG challenges it faced, the efforts it undertook to address these challenges, and consider how it could further tackle these issues by incorporating digitalization technology. Students will learn how to identify ESG challenges and associated solutions, as well as to develop solutions for effectively managing backlash. Upon completing the case and its associated assignment questions, students will be equipped to do the following:<br><br><ul><li>Comprehend the business model and core competencies of online e-commerce platforms.</li><li>Recognize ESG challenges from a structural perspective.</li><li>Analyze the causes of backlash and derive lessons for marketing and management.</li><li>Explore potential strategies for responding to ESG challenges and addressing backlash.</li></ul>

• Fast fashion
• E-commerce
• Digital business model
• Labor relations
• Ethics
• environmental, social, and governance