Inside the Mysterious Rise of Shein
21 min read
If you’ve ever bought anything from the fast-fashion company Shein, you know that its marketing can feel inescapable. Shein’s website, a digital bazaarbursting with pop-up ads and strobing discounts, lists thousands of new items every day—clothes, housewares, pet supplies, cosmetics, sex toys—at inconceivably low prices: $16.08 for a powder-blue suit, $3.80 for a three-pack of aviator sunglasses. On TikTok and YouTube, company-recruited influencers film themselves modeling their “Shein hauls.” Download Shein’s app or sign up for its emails, and a barrage of promotions will scream from your inbox. There is always a can’t-miss sale, a new deal, a reason to buy.
The company’s growth has been astonishing. Founded in China more than a decade ago, Shein was already beginning to disrupt online shopping in the United States when COVID trapped millions of people indoors with money to spend. By November 2022, the company accounted for 50 percent of U.S. fast-fashion sales, up from 12 percent in January 2020. As a private company, Shein doesn’t disclose its financials, but in March, the Financial Times reported that its annual profits had reached about $2 billion and that its valuation was more than $60 billion, making it far larger than H&M or Gap.
But the most remarkable thing about Shein might be how opaque it remains even as it dominates U.S. retail. Its origins in China—where most Shein items are made—should, in theory, subject the company to extra scrutiny in the United States. Yet much about Shein is still unknown. How did it so quickly take over American retail? Who runs it, and how does it offer so many products so cheaply? Over the past year, I sought answers to these questions, and what I learned was hardly reassuring.
The mystery begins with Shein’s origin story. Shein’s website says that it was established in 2012 by the four people who now run the company, but previous descriptions on the site listed the foundational year as 2008, with only one person, CEO Chris Xu, as the founder. Shein once claimed, improbably, that it had been started by “a small group of passionate, fashion loving individuals in North Brunswick, New Jersey.” An aide to North Brunswick’s mayor told me that, as far as they can tell, the company never operated in the township.
Xu’s personal details are their own matter of confusion. Listed on company records as Xu Yangtian, he went by Chris Xu in the early days of the business before settling on Sky Xu, an English translation of the last Chinese character in his given name. He maintains a remarkably low profile. Google Chris Xu or Shein founder, and you will encounter rows of photos of a middle-aged man with small wire-rimmed glasses and a toothy smile. This Chris Xu played no role in starting Shein; he is an engineering professor at Cornell University. (He told me that he occasionallyhears from Shein customers demanding their money back on unsatisfactory purchases.)
A 2013 press release called the company’s founder an “American-born-Chinese (ABC) graduate of Washington University,” a claim repeated in publications such as Forbes. I checked with Washington University in St. Louis, where a spokesperson said that I wasn’t the first to inquire about Xu, but that they had no record of him attending the school. A University of Washington spokesperson also told me that the institution had no record of him attending or graduating from the school. A 2022 article in The Guardian referred to reports that Xu had studied at George Washington University, in Washington, D.C., so I checked there too. But a spokesperson told me that the school had no trace of Xu.
Last year, I met a pair of eager company spokespeople in Singapore, where Shein is now headquartered and where, according to company filings, Xu has become a citizen. Over coffee, the spokespeople expressed confidence that Shein officials would be open to speaking with me, but soon after our meeting, they stopped responding to my emails. Instead, I heard from someone at Brunswick Group, a global public-relations and corporate-advisory firm retained by Shein. The firm declined to make Xu or any other company official available for an interview but agreed to respond to questions on behalf of Shein. The spokespeople provided a few facts about Xu: He was born in China in 1983 and graduated from Qingdao University of Science and Technology, in China’s Shandong province. They also confirmed that the tale about the company’s New Jersey roots was false, and attributed the inaccurate information about Xu being American to a former employee.
In Shein’s limited telling, the company owes its rise to sheer innovation: Xu has revolutionized fast fashion by creating a small-batch supply chain capable of quickly producing a staggering number of products and selling them to consumers at exceedingly low prices. The company’s constant gathering of user data allows it to predict trends well before its competitors do.But, after sifting through Chinese-media reports, Shein promotional materials, business records, and court documents, and conducting interviews with former employees, I’ve come to believe that the story Shein tells about its success is incomplete.
Shein has faced considerable headwinds in recent years. The current state of U.S.-China relations, a strategic competition that at times tips into outward hostility, has brought fierce scrutiny to Chinese businesses. The Biden administration has enacted tough rules to curb the development of certain Chinese technology, and has increased tariffs on some Chinese imports. TikTok is facing a possible forced divestment from its Chinese owner. In Shein’s case, its planned U.S. public listing appears to be dead, and its reputation has been at least somewhat sullied by denunciations from lawmakers.
Still, the company largely has the United States to thank for its growth. Porous U.S. trade laws have allowed Shein items to stream across American borders, and Washington lacks the strict digital-platform regulations that the European Union imposed on Shein in April. The company recently hired several executives and lobbyists (including a former Biden-administration Treasury Department official, a longtime Home Depot lobbyist, and a former chief of staff to Senator Marco Rubio, who himself regularly blasts the company) to advance its interests and defend its image in the United States. Driving all of this is the American consumer, who buys approximately one item of clothing a week.
In many ways, Shein is a Chinese success story realized in America.
This past spring, I rode through District 10, one of Singapore’s most expensive neighborhoods, past mansions shrouded in tropical foliage and rooflines peaking above hedgerows. Singaporean business records list Xu as residing in a small development of rental homes here that lease for upwards of $35,000 a month. From the road, I could see only a portion of his house, at the end of a driveway lined with palm trees and closed off with a gate. No cars were visible on the property. The neighborhood was quiet apart from the buzz of insects and some landscapers tending to another home nearby.
Shein has made Xu wealthy, but just how fantastically so is, as with most things relating to him, not entirely clear. According to the Bloomberg Billionaires Index, his net worth sits at about $21.5 billion, which would make him one of the 100 richest people on the planet. Forbes pegs Xu’s wealth considerably lower, at $11.2 billion, and Hurun Report, which tracks the world’s richest people, estimates it at $7.5 billion.
Technology companies tend to promote the mythology of their founders—tales of tinkerers conjuring world-changing gadgets in garages or Ivy League dropouts disrupting entire industries. But of the few people I spoke with who have actually met Xu, none had particularly strong recollections of him, beyond that he is hardworking and has a detailed understanding of company operations. The Wall Street Journalhas called him “the world’s most anonymous CEO.”
A clearer, if still limited, portrait of Xu can be gleaned from Chinese-language outlets to which Shein officials gave interviews before the company grew more closed off. According to the state newspaper Guangzhou Daily,Xu’s path to the house in District 10, if he lives there at all, began in Shandong, in eastern China, where he graduated from university in 2007. According to the Chinese business outlet LatePost, he then moved to Nanjing, where he and two partners founded an e-commerce company, Nanjing Dianwei Information Technology. The operation was low-budget, and so, apparently, was the quality of its clothing. Speaking with LatePost, a former partner described the company’s business approach using a Chinese idiom about deceptive advertising: “Like hanging a sheep’s head while selling dog meat.”
After about a year in operation, when the company had achieved modest success, Wang Xiaohu, one of Xu’s partners, arrived at the offices one day to find that Xu had vanished and locked Wang and his colleagues out of the company’s PayPal accounts, as he and the third partner, Li Peng, later told multiple outlets. (Wang could not be reached for comment, and Li declined to speak with me.) Shein has refuted this account, and when asked about the allegation, a spokesperson for the company told me only that Xu had “explored various business ventures before 2012.”
By 2013, products from a website called Sheinside.com had begun to appear on English-language fashion blogs and in other small outlets. One of the earliest mentions in an American publication came from a student at Bates College, in Maine, who mentioned a Sheinside biker jacket in an article about fall fashion trends in the school newspaper. The company began issuing press releases that seemed to have been translated into English. Many contained a line that plainly laid out the ambitions of the founder, identified as Chris Xu: “Our aim is to be the largest online wardrobe company around the world in 3 years.”
In pursuit of that goal, Xu made a decision in 2014 that the company hailed in a statement as a “milestone in Sheinside’s development”: Instead of placing bulk orders months in advance, as traditional fast-fashion businesses did, Sheinside would work with thousands of small suppliers to produce a variety of styles in quantities of about 100 to 200 pieces. When particular items proved popular, the company could easily order more of them; if a trend failed to catch on, production could be halted. Around the same time, the company launched its app and opened a warehouse outside Los Angeles.
In 2015, Sheinside shortened its name to simply Shein—initially spelled SheIn, pronounced she-in—to coincide with a perplexing new slogan: “She In Shine Out.” The company’s small-batch approach appeared to work, allowing it to bring clothes to market in only weeks as opposed to months, according to the Chinese brokerage firm Zhongtai Securities, which later studied Shein’s rise. Shein also now keeps an unsold-inventory rate of less than 2 percent, a 2023 Boston Consulting Group report found. Shein says this rate is far less than that of its competitors, and likes to point to this to defend against criticism that it is environmentally wasteful. By tamping down overproduction and overhead costs—Shein doesn’t have any physical stores—the company can keep prices extra low.
By 2019, Coresight Research, an advisory-and-research firm, estimated Shein’s annual sales to be about $4 billion. “When we are in business school, we are told that Zara’s story is a miracle,” Stella Liu, who was a Shein merchandising manager from 2017 to 2019, told me, referring to the more established Spanish fast-fashion company. “Actually, Shein is running much better than that.”
As Shein grew in the United States and other countries, the company remained relatively unknown in China, declining to sell items there at least in part because of an already crowded e-commerce marketplace. A former software engineer for Shein who joined the company in 2018 told me that his parents had cautioned him against taking the job, fearing that it might be a scam. (This person, like some others I interviewed, asked to remain anonymous to avoid possible repercussions.) Only on Black Friday, the annual bacchanalia of American consumerism, did the software engineer recognize the scale of Shein’s ambitions, watching on a dashboard as sales flooded in. By evening, workers in the Nanjing office were celebrating with beer and dancing around their cubicles.
For some observers, though, the scale and pace of Shein’s production was something to question, not cheer. Sheng Lu, a professor in the department of fashion-and-apparel studies at the University of Delaware, has extensively researched Shein. From December 2022 to December 2023, Lu found, the company offered 1.5 million SKUs, or stock-keeping units, a term used to identify individual products. By comparison, Zara offered only 40,000 SKUs over that period, and H&M offered 23,000. According to Lu, Shein typically priced its products 40 to 60 percent lower than its competitors did.
“Shein sort of doubled the practices of traditional fast-fashion retailers,” Lu told me. Given the company’s prices, he said, “we have to ask the question: How much can it pay its workers that are involved in making its products?”
At a company meeting in 2020, according to LatePost, Xu invoked a favorite saying of Chinese President Xi Jinping: “We have to be vigilant in times of peace.” That year, as Shein’s business saw its COVID-era boom in Western markets, the Chinese government stepped up its regulation of tech firms, concerned that they were amassing too much power. By 2021, Shein had moved its headquarters to Singapore, a popular destination for Chinese companies aiming to appeal to international consumers and escape Beijing’s glare.
Still, the company has continued to produce the majority of its clothing by contracting with third-party suppliers in China, where labor standards are poor and investigating workplaces is difficult—meaning that Shein’s manufacturing isn’t subject to much oversight.
In 2022, Britain’s Channel 4 filmed undercover at factories contracted by Shein, and found that the workers were paid as little as a few cents an item and worked up to 18 hours a day, with minimal time off. A Shein spokesperson said that the company was “extremely concerned” by the documentary’s findings and that it is “investing tens of millions of dollars in strengthening governance and compliance across our supply chain.” But this year, Shein itself said that it had conducted an audit of 2,796 of its 5,800 third-party manufacturers and awarded only 29 percent of the facilities a grade of B or better in responsible sourcing. Twenty percent scored either of the two lowest grades, with instances of wage violations and locked emergency exits in the workplace or employee dormitories. Unlike competitors such as H&M and Primark, as well as brands such as Nike and Adidas, Shein does not publicly disclose its third-party manufacturers.
Public Eye, a Swiss advocacy group that has researched Shein’s business practices, alleged in 2021 and 2024 reports that workers at Shein suppliers were spending 75 hours a week on the job, in violation of both Chinese labor laws and Shein’s own stated policies. After the release of the second report, Shein said that the company had made “significant progress on enhancing conditions across our ecosystem.”
In response to questions about the company’s labor practices, a spokesperson for Shein pointed me to Shein’s code of conduct for suppliers, which says, among other things, that they must comply with local laws, and that employees must be over 16 and get paid on time. Third-party suppliers have to sign and agree to follow the code, according to the company. A spokesperson for Shein also said that the company has tightened penalties for severe violations, increased audits, and expanded training for suppliers.
China’s opaque labor system makes it difficult for the United States and other countries importing Shein wares to know how they’re produced. But in 2021, President Joe Biden signed the Uyghur Forced Labor Prevention Act (UFLPA), barring goods from entering the United States if they have links to Xinjiang, where the U.S. government accuses China of genocide and says that products are made with “the use of detainee or prison labor and situations of forced labor.” About 90 percent of China’s cotton crop is grown in Xinjiang; synthetic fibers are produced there as well.
In November 2022, the Bloomberg Newsreporter Sheridan Prasso published an investigation finding that tests conducted by a German lab had proved on two occasions that Shein garments shipped to the U.S. were made with cotton from Xinjiang. Shein would not tell Bloomberg whether it uses cotton from the region, but when presented with the test results, the company didn’t dispute them.
After human-rights groups seized on the Bloomberg story, Shein officials attempted to prove privately to Washington lawmakers that the reporting was false, two people familiar with the situation told me. One of these people, a former Shein employee who asked not to be named out of fear of retaliation, said that the company had surreptitiously accessed Prasso’s Shein account to track down the items she’d gotten tested. During meetings in December 2022, the company then claimed to several lawmakers that it had found that the cotton originated elsewhere. Shein never presented those results publicly. “They can’t, because then they would have to confess that they looked into Sheridan’s data,” the former employee said.
Spokespeople for Shein declined to comment on the incident. They told me that Shein screens its products to ensure that they are from “approved regions” and that, for U.S. products, Shein does not source cotton from China.
A former official at the U.S. Department of Homeland Security who was involved in the early implementation of the UFLPA told me that the U.S. government initially struggled to keep up with the volume of work the new regulations demanded. The official, who requested anonymity because they still work in government, told me that Shein’s lack of transparency about its business operations made DHS’s job more difficult. “There is really just no traceability,” this person said of Shein. “Their corporate structure is not clear. They are a private company. They don’t have any annual reports available for us to read through.” When asked about Shein’s operations, a DHS spokesperson told me in an email that the agency is “unable to disclose additional information, methodology, or plans about detaining specific goods under UFLPA to protect law enforcement sensitive and business confidential information.”
Another U.S. policy on the books seems almost designed to allow Shein products to avoid scrutiny when they arrive in America. The de minimis clause, a once-obscure provision of U.S. trade law, allows for imports worth less than $800 to enter the United States duty-free and with limited screening. The ceiling used to be $200, but lawmakers raised it in 2016, enabling products from overseas to flood the American market. Use of the de minimis provision expanded further when President Donald Trump imposed tariffs on Chinese goods in 2018; importers figured out that they could ship products to other countries, break them into smaller packages falling below the threshold, and then deliver them to the U.S. tariff-free. From 2018 to 2021, the number of de minimisimports increased by 88 percent, according to the U.S. International Trade Commission. Customs and Border Protection expects more than 1 billion de minimis packages to be processed this year.
CBP has warned that the overwhelming volume of small packages, as well as the fact that many companies shipping to the United States do not provide required information such as the contents of their packages and the importers of record, has made screening and detecting contraband harder. In fiscal year 2022, the agency cleared more than 685 million de minimis shipments even though it did not have enough data to properly determine their risk. “It’s not just about tariffs,” Charles Benoit, a trade counsel at the Coalition for a Prosperous America, a nonprofit group of domestic producers that opposes the de minimisclause, told me. “It’s about no liability for the importer.”
In a March 2023 letter to lawmakers, a Shein executive said that “the vast majority” of the company’s goods enter the United States under the de minimis provision. Four months later, a different executive told Semaforthat de minimis was “never foundational” to the company’s success. But an interim report published in June 2023 by the House Select Committee on the Chinese Communist Party found that Shein and Temu, a competitor of Shein’s, are likely responsible for more than 30 percent of all packages shipped to the United States each day under de minimis. According to the report, in 2022, Gap paid $700 million in import duties, H&M paid $205 million, and Shein and Temu paid nothing.
“The de minimis loophole insulates Temu and Shein from scrutiny over forced-labor concerns,” Mike Gallagher, a Republican who chaired the committee until he resigned from Congress in April, told me. A spokesperson for Shein told me the company believes that the de minimis provision needs to be “reformed to create a more level, transparent playing field … regardless of where a company is based or ships from,” but they did not provide more details on what changes the company would favor.
In April, DHS announced that it was taking new measures to curb illegal textile imports, including improving the screening of de minimispackages and increasing physical inspections. Four pieces of bipartisan legislation have been introduced that would drastically tighten de minimis regulations, including some barring de minimis treatment for imports from China. For two years, however, there has been little progress in advancing such bills. Business groups have pushed back, and two key supporters in Congress, Democratic Representatives Earl Blumenauer and Jennifer Wexton, are retiring at the end of this term. Earlier this year, the state-backed China Daily warned that legislation targeting de minimis would be a blow to U.S.-China relations. American lawmakers, the editorial said, have decided, when it comes to companies like Shein, that “if we cannot compete with them, outlaw them.”
With Gallagher’s resignation, the China select committee’s interest in Shein appears to have waned. Since the committee’s interim report was published, another has not followed. The committee spokesperson told me in May that there “won’t be anything happening in the near term regarding another report.”
Tiina Menzel is a German illustrator whose online shop sells buttons, prints, stickers, and other items, many featuring drawings of skeletons and the internet’s favorite animal, cats. Beginning in 2019, she told me in phone interviews, she noticed her designs appearing, without her consent, on products sold by Shein: brooches, T-shirts, phone cases. Sometimes her name hadn’t even been fully removed.
A few times, she emailed a generic Shein account and got a response from an employee who identified herself as Bonnie Lu. In one 2020 message I reviewed, Lu apologized to Menzel and admitted, “We have huge amount of products and large number of buyers, it is quite difficult for us to find out all potentially infringing products.” Lu sent Menzel screenshots showing that 66 T-shirts and two phone cases with two of her designs had been sold, earning the company $552.12; Lu offered Menzel a total of $600 for compensation and the continued use of her design. Menzel declined. She wanted nothing to do with the company. Shein later offered Menzel a contract, which she shared with me, that would have barred her from publicly criticizing the company, including liking or reposting comments that could be deemed damaging to or disparaging of Shein. She again declined.
For a decade, independent artists such as Menzel and established brands have complained that Shein has stolen and profited from their work. The company has faced dozens of lawsuits in the U.S. and elsewhere, including from the sports-equipment and eyewear company Oakley and from H&M, the latter of which alleges that, in nearly 100 instances, Shein illegally copied its designs, many featuring a bashful cotton-candy-colored unicorn. (A spokesperson for Shein declined to comment on the Oakley and H&M lawsuits.)
Last December, Temu filed a lawsuit in Washington, D.C., accusing Shein of a host of anticompetitive practices. The most troubling allegation is that Shein employees summoned Temu suppliers to the company’s offices under false pretenses, then detained those suppliers for up to 10 hours while confiscating and searching their phones for proprietary information. The lawsuit also alleges that Shein illegally copied mobile and web games developed by Temu to reel in customers. “Shein is not a brand; it is a glorified label maker,” the complaint alleges. Shein has moved to have the lawsuit dismissed, and last month, Shein filed its own suit against Temu, alleging, among other things, that a Temu employee stole “valuable trade secrets” from Shein.
Shein is aware that allegations of artistic infringement have become a financial and reputational problem. Copyright issues were causing “millions of dollars of damages and attorneys’ fees being paid and negative news articles and social media posts about the company,” Shein’s legal team wrote in an internal document, Wired reported in 2022. Before the Wired article was published, Shein’s general counsel sent a cease-and-desist letter to Condé Nast, Wired’s parent company, attempting to stop the internal document from getting out. Doing so would cause “serious and irreparable harm,” according to a copy of the letter I reviewed. A second letter, sent by another lawyer representing Shein a week after the Wired story ran, urged Wired to return the document or destroy it.
Menzel finally sued the company earlier this year, alleging that Shein had repeatedly used more than a dozen of her designs without her permission. The stealing continued even after the lawsuit was filed, according to an amended complaint that alleges that the company used AI tools to copy Menzel’s work and mash it up with other designs. When I searched skeletons and cats on Shein’s app in late May, I got results for a T-shirt and a pet hoodie featuring art that looked nearly identical to Menzel’s. (A spokesperson for Shein declined to comment.)
Menzel put me in touch with Cassey Ho, a 37-year-old California-based designer who parlayed a popular fitness channel on YouTube into a successful athletic-wear brand. Ho has some 3 million followers on Instagram, enough that Shein took notice when, last year, she started posting allegations that the company was ripping off her skort designs.
She eventually heard from George Chiao, the president of Shein’s U.S. business, in February 2023, and posted screenshots of their conversation on her blog. Ho is exactly the type of person Shein would presumably like to have repping its clothing: dynamic and female, with a strong personal brand and an established following. Ho told me that Chiao had floated the idea of a partnership but that she had no interest in working with Shein. (A spokesperson for Shein again declined to comment.)
Ho’s decision worked out just fine. Taylor Swift ended up wearing one of her designs, a lavender skort, in a YouTube video promoting the song “Fortnight.” Ho said that the skort sold out on her brand’s own website within minutes of the video’s debut.
None of the anger from creators or reports of grim working conditions or alleged links to human-rights violations appear to have slowed Shein’s march. Shein has picked up billions of dollars in outside investment, including from major American private-equity firms. “The State of Fashion 2024,” a report by the consultancy McKinsey & Company and the industry-news site The Business of Fashion, found that 40 percent of U.S. consumers had shopped at Shein or Temu in the past 12 months. Shein signed a deal last year with Forever 21 to bring its products into the shopping-mall staple’s American retail locations.
Gallagher told me that he doesn’t expect young American consumers to be wholly aware of “the depravity of what is going on in Xinjiang” and Shein’s possible connection to it. “I do think that generation tends to be very concerned with human rights, so if they wereaware of some of these practices, it might sway their view in a different direction,” he said.
Perhaps, but resisting the allure of cheap stuff, the societal pressure to keep up with the latest trends, and the seduction of ever-evolving apps takes serious willpower. The McKinsey report points to the success of Shein’s “in-app gamification”—features that reward customers with loyalty points for watching livestreams of fashion shows and participating in outfit challenges. Ken Pucker, a former executive at Timberland who is now a fast-fashion critic, has warned of the possible “Sheinification” of the industry—more and more brands replicating Shein’s immense production churn. That process is well under way. In March, The Wall Street Journal reported that Shein would begin selling its technology to other brands, and a host of copycat sites are trying to emulate its success. In an effort to compete, H&M has been forced to speed up production, while Amazon is trying to shorten delivery times. The rise of “dupe” culture that champions cheap knockoffs as a trendy and subversive act against high-end brands seems all but designed to benefit Shein and its peers.
In November 2023, Shein filed to go public in the United States. For the company, a public listing here would mark a new moment of triumph, perhaps all the more so for a founder who appears to crave American validation. A U.S. IPO probably won’t happen, however, in part because of China, the country from which Xu has tried to distance himself. Because Shein’s production primarily takes place there, the company had to ask the China Securities Regulatory Commission for permission to proceed with a possible U.S. listing while a different Chinese regulator was probing Shein, leading to delays. Earlier this year, executives spoke with British officials about going public in the United Kingdom, and in June, the company confidentially filed for an IPO there, according to multiple media reports. If that doesn’t work out, according to the Financial Times, a Hong Kong IPO is also being considered.
Regardless of what happens in America to his company, Xu—whoever he is, exactly—has succeeded in demonstrating that a Chinese-founded company selling questionably sourced clothes can thrive in the United States. And he’s done so because of American capital, American trade regulations, and, perhaps most crucial, the perpetually unsated American consumer.
Alicia Chen and Koh Ewe contributed reporting.
