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The story of Shein's soaring profits in 2023 presents a fascinating paradox. While a growing number of consumers, particularly millennials and Gen Z, express a desire for sustainable clothing, fast fashion giants like Shein are experiencing tremendous financial success. This raises several key questions.
Eco-conscious yet fast fashion obsessed
The core tension lies in the seemingly contradictory behavior of consumers, particularly millennials and Gen Z. Surveys like the one by The New Consumer and Coefficient Capital suggest a strong desire for environmentally friendly products, with over half of Shein's customers prioritizing such aspects. Additionally, 67 per cent reportedly express willingness to pay more for sustainable garments. However, research from Sheffield Hallam University reveals a different reality, 90 per cent of Gen Z respondents, despite their concern for sustainability, still resort to fast fashion purchases.
Indeed, fast fashion's allure lies in its affordability, with Shein's average unit price at a mere $7.90 in 2021. This affordability trumps stated preferences, as evidenced by the continued success of fast fashion companies despite their environmental and ethical shortcomings. Sustainable clothing often comes with a higher price tag, creating a barrier for some. This disconnect is a classic case of "stated preferences vs. revealed preferences" – a difference between what people say they want and what they actually do. Fast fashion offers a quick and easy way to update wardrobes, fueled by constant new trends and readily available online shopping options. Sustainable alternatives may require more research and effort to find.
Table: Revenue estimates of top global fast fashion brands
Shein
2021: $15.7 billion (estimated)
2022: $22.7 billion (estimated)
2023 (projected): Revenue on track to surpass H&M and Zara combined (possibly exceeding $58.5 billion)
Inditex Group (Zara)
2021: €37.0 billion ($42.3 billion)
2022: €30.7 billion ($35.4 billion)
2023 (YTD - first half): €18.3 billion ($21.1 billion)
H&M (H&M Group Reports)
2021: SEK 186.8 billion ($21.0 billion)
2022: SEK 198.9 billion ($22.7 billion)
2023 (YTD – Q1 to Q3): SEK 164.0 billion ($18.8 billion)
The data highlights, Shein's revenue has seen significant growth, potentially surpassing Zara and H&M combined in 2023. Zara's revenue (as part of Inditex group) shows some fluctuation but remains substantial. H&M's group revenue has seen a modest increase. It maybe noted Shein’s data are estimates and projections, and revenue figures for Zara and H&M are for their parent groups.
The credibility of sustainability claims
Surveys claiming a rise in eco-conscious consumers need to be viewed with a critical eye. While interest may be genuine, factors like affordability and lack of readily available sustainable alternatives can hinder purchase decisions. Additionally, ‘greenwashing’ by companies further erodes trust. Shein's factory tour campaign, for instance, received a lukewarm reception due to a lack of transparency. While awareness of sustainability is growing, there's still a gap in understanding the true environmental and ethical costs of fast fashion.
The core demographic for Shein is millennials and Gen Z. This generation is often portrayed as socially conscious, yet their buying habits paint a more complex picture. Possible explanations for this seemingly contradictory behavior include:
• Prioritization: Sustainability may not be the top priority for everyone. Other factors like style, trendiness, and affordability may outweigh environmental concerns.
• Greenwashing: Fast fashion companies like Shein's attempt to portray themselves as environmentally conscious through PR campaigns can create confusion. Consumers may be unsure of genuine sustainable practices vs. marketing tactics.
The future a balancing ct
The future of fast fashion seems to lie in a delicate balancing act. Companies like Shein acknowledge the importance of sustainability, evidenced by their pledges to invest in environmentally friendly practices and improve labor conditions. However, the success of these initiatives remains unclear. Here are some potential directions:
Increased transparency: Consumers crave information about a product's environmental impact and origin. Greater transparency in supply chains can rebuild trust. Fast fashion giants may be acknowledging the sustainability concerns. Shein's pledges to invest in eco-friendly practices and improve labor conditions suggest a potential shift towards a more responsible model.
Sustainable innovation: Technological advancements in fabric production and recycling can pave the way for eco-friendly yet affordable garments.
Shifting consumer behavior: Promoting mindful consumption and encouraging a "buy less, buy better" mentality can contribute to a more sustainable fashion ecosystem. Bridging the gap requires conscious consumerism. True change relies on actively seeking sustainable options, even if they come at a slightly higher price. Additionally, supporting second-hand clothing stores can be a more environmentally friendly alternative.
The onus lies not just on fast fashion giants but also on consumers. Educating ourselves about sustainable options and prioritizing quality over quantity are crucial steps towards a more balanced future for fashion. The dichotomy between consumer desires and buying habits highlights the complexities surrounding fast fashion. While fast fashion profits soar, the future remains uncertain. The rise of consumer awareness, innovation in sustainable fashion, and potential regulations could tip the scales towards a more sustainable future for the industry.
Exports of Cotton yarn, fabrics and made-ups from India increased by 6.78 per cent Y-o-Y in Mar’24, notes Sunil Patwari, Chairman, Cotton Textiles Export Promotion Council (TEXPROCIL). They also registered a 6.71 per cent Y-o-Y rise during FY’24, adds Patwari.
After being under pressure for more than a year, textile and apparel (T&A) exports grew by 6.91 per cent Y-o-Y during Mar’24. However for the entire FY’24, these exports contracted by 3.24 per cent
On the other hand, India’s apparel exports, which increased by 1.7 per cent Y-o-Y in Mar’24 declined by 10.25 per cent during FY24.
This growth in India’s cotton textiles last financial year despite geo-strategic challenges shows the resilience of the Indian textile industry. To sustain this growth, the new Central government needs to address issues such as cotton prices and preferential access in key markets, opines Patwari.
Various farmer associations and industry stakeholders’ in Zimbabwe have called for increased value addition to raw cotton to convert it into finished products, to revitalise the industry.
At the launch of 2021/22 cotton marketing season in Mahuwe, Engineer Chris Murove, CEO, Cotton Council of Zimbabwe (CCPZ) said, this move will not only benefit cotton farmers but also boost the extraction and refinement of cooking oil once the cotton farmer has access to their seed and lint. The remaining cotton cake can be used to manufacture feed for beef and dairy cattle, he added.
Dr Anxious Masuka, Minister of Lands, Agriculture, Fisheries, Water and Rural Development, also urged stakeholders to embrace cotton value addition, as the country journeys towards industrialising rural communities.
Overall, local Zimbabwean cotton industry processes about 20 percent of its lint production. The Government ensures that the local textile industry’s lint requirements are met by ensuring that each ginner reserves 30 per cent of lint production for local consumption.
Exporting shirts from processed cotton would have helped Zimbabwe boost revenues from the sector by 424 per cent to $219 million, from the US$42 million netted in 2023, said Masuka.
The country also exported cotton linters worth $7,318,456 and yarn worth $2,596,966 during the year. Had it exported cotton linters, cotton yarn and shirts it would have made a lot of revenue, he added.
Tim Cross, CEO, SATCoL, has launched an innovative project to recycle polyester waste from discarded garments and other textiles into polyester pellets to be spun into yarn and re-used by the fashion and textiles industries. In the UK alone, 300,000 tons of textile items, including polyester, are discarded into household waste annually. Previously, polyester with no remaining utility would have been simply disposed of, he adds.
This polyester waste from discarded garments and textiles are being converted into polyester pellets at the SATCoL processing center in Kettering, Northamptonshire. These pellets will later be transformed into yarn and reused by the fashion and textiles industries.
This initiative will help SATCoL salvage that waste and reintegrate it into supply chains. It will help the company save carbon and contributes significantly to our collective journey towards Net Zero.
Titled, Re:claim, the project will recycle 2,500 tons of polyester waste this year, with plans to further increase this figure to 5,000 tons in its second year of operation. These pellets are expected to be incorporated into manufacturing processes for new products by late 2024.
Majonne Frost, Head-Environment and Sustainability, SATCoL, remarks, this partnership combines the extensive collection and processing capabilities of The Salvation Army with the cutting-edge technology developed by Project Plan B and Pure Loop. The collaboration will introduce new solutions at services at slace, fostering a textile circular economy, she adds.
Denim lifestyle brand Levi's plans to expand its international presence by opening new stores in key locations in Bangladesh including Chittagong in the coming months.
The brand recently forayed into the Bangladesh market in partnership with DBL Group. It opened its first store across 2.270 sq ft in Dhaka to offer a wide range of products including denims, non-denims, and tops for both men and women tailored to regional preferences.
Amisha Jain, Managing Director, South Asia-Middle East and Africa (SAMEA),Levi Strauss, says, the brand’s first store in Dhaka supports its focus on the direct-to-consumer retail and aligns it with a dynamic market propelled by the consumer base and swift urbanisation in cities such as Dhaka and Chittagong.
Levi’s strategic entry into the Bangladesh market and distinctive strategies position it to forge a robust presence and foster sustainable growth, adds Jain.
Levi Strauss & Co’s products are sold in more than 110 countries worldwide through a combination of chain retailers, department stores, online sites with a global footprint of around 3,200 brand-dedicated stores and shop-in-shops.
Known for its cashmere products, high-end Italian clothing brand, Brunello Cucinelli has projected a 10 per cent rise in revenues in FY’24.
The brand’s revenues in Q1FY’24 ended Mar ’24 rose by 16.5 per cent to €309 million, driven by growth in all regions, including Asia. The highest rise in revenues of 19.5 per cent was recorded in Americas while revenues in Europe increased by 13.9 per cent. The brand also reported a 16 per cent growth in its sales in Asia.
The brand has received abundant orders for the autumn-winter 2024 collections, reiterating its expectations for 2024 full year with renewed convictions, says Brunello Cucinelli, Executive Chairman.
With the demand for luxury goods slackening, the gap between the performances of different groups is widening, with those focusing on the higher-end consumers tending to perform better.
A profit warning issued by Kering last month shows, a slump in Asia sales of its star label Gucci cast a cloud over its reporting season while quarterly sales at LVMH rose by only 3 per cent.
The National Council of Textile Organizations (NCTO) has emphasized the need for urgent and comprehensive reform to US de minimis trade laws to combat China's abuse of the current system, which adversely impacts American manufacturers and supports forced labor in China's Xinjiang region.
The statement was made by NCTO President and CEO Kim Glas following the House Ways and Means Committee's markup of HR 7979, legislation related to de minimis trade.
Glas acknowledged the efforts of Chairman Jason Smith (R-MO) and Rep. Greg Murphy (R-NC) for addressing China's exploitation of US trade laws, but insisted on stronger measures to prevent China from taking advantage of loopholes. Glas expressed concern that half-measures could allow China to continue harming American industries and workers.
The textile industry has suffered significantly from duty-free imports from Chinese e-commerce retailers like Shein and Temu, leading to the closure of 14 manufacturing plants in recent months. Glas called the situation a "five-alarm fire" and reiterated the urgent need for a robust, enforceable solution.
NCTO urges Congress to fully address the abuse of the de minimis loophole, highlighting the importance of excluding trade-sensitive sectors such as textiles and apparel from de minimis benefits. Glas praised the work of Ways and Means Trade Subcommittee Ranking Member Earl Blumenauer (D-OR) for proposing the Import Security and Fairness Act, which would block all Chinese products from qualifying for de minimis benefits.
In summary, NCTO seeks stronger reforms to end China's exploitation of de minimis trade laws and protect American industries from unfair competition and forced labor practices.
A talk show titled ‘Denim Titans: audacity, madness and revolution!’ will be organised within the upcoming edition of Denim PV. The talk show will host three denim veterans and longtime industry innovators including Francois Girbaud, Adriano Goldschmeid and Jimmy Tavaerniti.
The panel will take place in Milan’s Superstudiopiù and will reveal the audacious, the mad, and the revolutionary side of denim culture.
Chairing the panel will be Marco Lucietti, Director - Strategic Projects, Sanko Holding Isko Division.
Aimed at the insiders of the jeanswear industry, the trade show Denim PV is scheduled to be held in Milan from June 05-06, 2024.
Luxury giant LVMH reported a solid start to 2024 with overall revenue growth of 3 per cent. While the economic and geopolitical climate remains shaky, LVMH benefited from strong performances in key areas.
Fashion and leather goods, the company's largest division, saw a 2 per cent increase. Louis Vuitton, buoyed by creativity and new collections, led the way. Dior continued its impressive momentum with record-breaking viewership for its fashion show. Celine and Loewe also saw positive results.
The perfumes and cosmetics division grew 7 per cent, driven by innovation and selective distribution. Christian Dior's fragrances and makeup lines thrived, while Guerlain saw success with its new products.
Watches and jewelry dipped slightly (-2 per cent), but Tiffany & Co. continued its global expansion with a successful new store concept and communication campaign. Bulgari showcased its iconic collections and launched a foundation dedicated to cultural preservation.
Sephora, in the selective retailing sector, achieved impressive 11 per cent growth, particularly strong in North America and Europe. DFS, however, remained below pre-pandemic levels due to limited travel recovery.
Looking ahead, LVMH acknowledges the uncertain environment but remains confident. The company will focus on brand development, innovation, product quality, and controlled distribution. With its talented workforce, diverse businesses, and global presence, LVMH aims to solidify its leadership position in the luxury goods market throughout 2024.
Led by Julian Dunkerton, CEO, Superdry, a prominent British fashion chain, has proposed a comprehensive rescue package to avoid potential administration. The plan includes a fundraising initiative, delisting from the London Stock Exchange, and a strategic restructuring.
Under this rescue plan, Superdry aims to secure substantial cash savings by renegotiating rents for 39 of its 94 stores in the UK. Additionally, the company plans to extend the maturity of loans provided under its debt facility agreements, as it grapples with both weakened consumer demand and a pressing cash shortage.
Dunkerton emphasises, the proposed plan represents the most suitable course of action for all stakeholders. To facilitate the equity raise, Dunkerton aims to underwrite the entire process. Investors can participate in either an open offer, to raise the sterling-equivalent of €8 million, or in a placing intended to generate gross proceeds of £10 million.
Dunkerton clarifies, Superdry has no immediate plans to return to public listing as it aims to shift away from the scrutiny of public markets for the foreseeable future.
Renowned for its distinctive jackets and apparel blending American vintage styles with Japanese graphics, Superdry acknowledges the persistently challenging trading conditions. Despite heightened marketing efforts, the brand has experienced a decline in popularity, particularly among younger demographics.
Analysts Danni Hewson from AJ Bell, hopes, Superdry is able to rejuvenate its brand away from the public spotlight.
