Shein announces its arrival in Colombia: cheap clothing at a high cost

Shein, an online fashion company, shared the news that it would expand into the Colombian territory with the aim of consolidating the market in the region. With a business model based on hyper-production and several environmental controversies, the arrival of the Asian giant to Colombia leaves more than a couple of doubts.

The Chinese company has experienced exponential growth in recent years, reaching multiple corners of the world with its low-priced but high-cost clothing.

Its heyday is due to the rise of digital stores and the success of social networks that have contributed to the viralization of the content of the page. Low prices, on-trend clothes and new collections every three days; a pace that the company can only keep up with questionable policies.

With the arrival of the apparel giant, it is worth asking what will happen to local production and how much the company will affect domestic entrepreneurs.

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Cheap clothes at a high cost

Shein’s success is evident. With 700 to 1,000 new products every day, users of the portal can find almost any item imaginable on the site. Variety, low price and the ease of receiving the package at home; an offer that is hard to refuse for Internet users. Production of this caliber leaves an equivalent environmental footprint.

By 2023, the United Nations identified the fashion industry as one of the main contributors to global greenhouse gas emissions.

According to the international entity, the industry uses approximately 215 billion liters of water annually and contributes to 9 percent of microplastic pollution in the oceans.

Shein has been criticized for sustainability issues, product quality and labor conditions in its factories, as have Temu and other Chinese companies, according to CNBC US.

According to a Greenpeace report published in 2022, 15% of the brand’s garments contained hazardous chemicals that exceeded European Union regulatory limits.

The report also notes that employees work 11 hours a day for 29 days a month, with no breaks, low wages, penalties for mistakes and poor working conditions not only in Asia, but also at its logistics base in Liège, Belgium, where they have reported abusive working hours and inhumane treatment.

Although the company seeks to benefit Colombia’s economy by entering the market, some local companies will face challenges, particularly small and medium-sized fashion companies that will have to compete with the new competitor.

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Shein’s success

According to Statista, Shein is worth close to $66 billion and according to Bloomberg, the company aims to achieve a valuation of between $80 billion and $90 billion.

Over the past year, Shein has reported earnings in excess of $30 billion and some predictions indicate that they could have reached $36.5 billion.

This positions the company as one of the most outstanding due to its rapid rise in the market. In fact, it has become one of the largest and fastest growing major fashion retailers globally.

With sales of such caliber, Shein settled in Brazil a couple of years ago to consolidate the market in the region and installed a production plant. Now, after announcing its arrival in Colombia, it is clear that the Asian giant seeks to position itself in the Latin American fashion market, taking advantage of the privileged geographical position of the Colombian territory and the potential of the fashion market in the region.

The truth is that the arrival of a producer with this machinery poses several challenges for local producers, who will have to rethink their business model to survive a competitor of this nature. To minimize the impact on the local market and mitigate the environmental damage of Shein’s production, it will be necessary to implement regulations.

Other countries, such as France, have already created regulations to control Shein’s excessive production and safeguard the interests of local production.

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