EXCLUSIVE Chinese Retailer Shein Lacks Disclosures, Makes False Claims About Factories

A keyboard and basket can be seen in front of a Shein logo displayed in this illustration photo taken October 13, 2020. REUTERS / Dado Ruvic / Illustration

Aug 6 (Reuters) – Shein, the fast growing Chinese online retailer, has not publicly disclosed the working conditions along its supply chain that are required by law in the UK, and the company until ‘recently falsely stated on its website that conditions at the factories it uses were certified by international labor standards bodies, Reuters found.

In Britain, businesses over a certain size must clearly indicate on their websites the measures they are taking to tackle forced labor under the Modern Slavery Act 2015.

Shein’s ‘social responsibility’ page states that she ‘never, ever’ engages in child labor or forced labor, but does not provide the full supply chain information required by UK law.

The law requires that companies selling more than 36 million pounds of merchandise worldwide per year must provide a statement on a searchable link available in a prominent place on its home page, dated for a fiscal year and signed by a manager, outlining the steps to follow. to prevent modern slavery in its supply chain.

Shein declined to provide his annual income to Reuters, saying he did not disclose his income publicly. Analysts put the company’s valuation at $ 15 billion, with annual revenue of at least $ 5 billion.

A spokesperson for Shein said he was finalizing the statements required by UK law and planned to post them on his website. “We are developing comprehensive policies, which we will post on our website in the coming weeks,” Shein’s spokesperson said on August 2.

Britain’s Home Office, which is responsible for enforcing the disclosure law, said it was not commenting on specific cases.

In Australia, a similar law requires companies with turnover exceeding A $ 100 million per year to submit an annual modern slavery report to the Australian Border Force (ABF).

The ABF confirmed to Reuters that foreign entities exporting to Australia are required to submit a report if their income exceeds the threshold.

As of August 4, neither Shein nor its affiliate in that country had submitted such a statement, according to a record kept by the ABF.

Following questions from Reuters, a spokesperson for Shein told Reuters the company is complying with Australian law, without specifying whether it believes it is not required to report or if it has since submitted a statement. the Reuters questioning.

The ABF declined to comment on Shein.

Reuters has not been able to independently assess the working conditions in the factories used by Shein or the wages she pays. The retailer did not respond to a request for comment on its standards for suppliers.

LOW PRICE, LACK OF TRANSPARENCY

Over the past 18 months, privately held Shein, whose official name is Zoetop Business Co Ltd, has taken the fast fashion world by storm. The company’s Instagram and TikTok accounts have over 23 million followers, many of them young women showing off its inexpensive clothes, such as $ 9 dresses and $ 15 shoes. Its website attracted more than 160 million visitors in June, according to web traffic analytics company Similarweb, overtaking rivals Zara (ITX.MC) and H&M (HMb.ST).

The company’s ultra-low prices and lack of transparency have made labor watchdogs, including the Worker Rights Consortium and the Business & Human Rights Resource Center, question how it produces its goods at such low prices.

Shein is based in China but sells online to customers only outside the country. Its main investors are Sequoia Capital China and Tiger Global Management. Both declined to comment on this story.

Some of Shein’s main competitors, including H&M, Inditex, parent company of Zara, ASOS (ASOS.L), Boohoo (BOOH.L) and Zalando (ZALG.DE), are releasing statements, along with more detailed information on their supply chain, such as factory listings and codes of conduct, on their websites.

H&M’s website includes a downloadable spreadsheet with the specific names and addresses of thousands of its factories and processing facilities. Inditex has a downloadable eight-page code of conduct and a map showing the number of its factories and suppliers in each country.

Separately, in a statement last published on his website by Reuters on July 26, Shein said the factories he worked with were “certified” by the International Organization for Standardization (ISO) and that Shein was ” proudly in compliance with the strict fair labor standards set by international organizations like SA8000.

SA8000 is a management systems standard based on international human rights principles defined by the International Labor Organization and the United Nations, which measures the performance of companies in eight areas, including child labor, labor forced and health and safety.

ISO is a global organization that develops business, industry and technical standards. Companies pay certification bodies to implement and audit these standards in their organizations.

ISO only sets standards and does not perform certifications itself, a spokesperson said. A company “cannot be accredited or certified by ISO,” the spokesperson said.

Social Accountability International, which administers the SA8000 standard, said Shein had not been certified by her program and had had no contact with the company.

Shein deleted the page after Reuters asked the company about it. The same web address now directs users to a new “social responsibility” page, which makes no mention of ISO or SA8000.

Reporting by Victoria Waldersee Editing by Vanessa O’Connell and Bill Rigby

Our Standards: The Thomson Reuters Trust Principles.

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