Shein discovered two cases of child labor among its suppliers last year
The fast-fashion giant uncovered child labor problems in China during its procurement audits between January and October 2023, according to a new sustainability report.
It is unclear whether the cases involved two children or whether two suppliers were involved in multiple cases involving children. Under Chinese law, children are then defined as those younger than 16 years old.
“Both cases were resolved quickly. Remedial measures included terminating the contracts of underage employees, ensuring payment of all outstanding wages, arranging medical examinations and facilitating repatriation to parents/guardians if necessary,” the report said.
Shein suspended the suppliers for 30 days and terminated the contracts of the underage workers. In October, Shein updated its terms and conditions to immediately terminate suppliers who use forced or child labor.
The report also mentioned a now-resolved case in which workers at a factory in Guangzhou, China, were not paid their wages on time.
A Shein spokesman declined further comment.
IPO dreams
The sustainability report comes as the Singapore-headquartered company prepares for its IPO, presumably in the UK.
Earlier news of a possible IPO in the US had sparked fierce backlash, partly because of the company’s Chinese roots.
Public companies are subject to far stricter reporting requirements than private companies and often face greater public scrutiny. Before each IPO, the company that previously kept its cards close to its chest is now showing its cards more clearly. Before 2023, Shein reported labor law violations only as a percentage of audits.
Shein is one of the largest fast fashion players in the USA with a Valuation of $100 billion in 2022At the time, it was the third-largest private company in the world, behind TikTok owner ByteDance and Elon Musk’s SpaceX. The Financial Times reported that Shein made $2 billion in profit last year.
Shein is known for its extremely cheap clothing and accessories and has been criticized for a variety of issues, including worker exploitation, non-compliance with environmental regulations, selling clothing containing dangerous chemicals, and plagiarism of designers and artists.
Last week, South Korean health authorities said Shein shoes contained toxic substances in amounts 100 times higher than legally permitted. Large amounts of phthalates, a chemical compound that makes plastics more flexible, were found in some pairs of Shein shoes.
