Online retailer Shein has catapulted to the top of fast fashion — but not without controversy

(NEW YORK) — Online retailer Shein has become well-known for its massive inventory of trendy clothing produced and sold to consumers on the cheap.

In just a few short years, the company catapulted to the top of the fast fashion world by harnessing influencer culture and outperforming rivals – all while staying secretive about their operations.

“This company just seemed to kind of come out of nowhere. There are so many fashion companies out there. But we’ve never really seen one grow this quickly and take this much market share as quickly as Shein did,” said Elizabeth Cline, author of Overdressed and The Conscious Closet.

It’s now the most-visited clothing website in the world, with customers spending twice as much time on the site than Nike.com, which is the next most popular site, according to Similarweb Digital Data.

The idea behind fast fashion is to get the newest styles on the market as quickly and cheaply as possible, so consumers can snap them up while they’re the most popular, according to experts who spoke to ABC News in a new episode of Impact x Nightline streaming now on Hulu.

Other top fast fashion retailers, like Zara and H&M, normally get runway styles to customers in a few weeks to a few months at a fraction of the luxury price. They try to predict trends for the season and fill stores with clothing they predict consumers will want to buy.

But Shein’s business model is breaking that mold, according to Cline.

“What they do is they use data and algorithms to track trends. And when a trend emerges, they place an order. And then they wait to see which product is going to take off. And only then do they go back to their factories and say, ‘This is selling. We need to make more of it,’” Cline said.

This allows Shein to sell trends to consumers while they are at the height of their popularity.

Shein says the company keeps customer data only for as long as is necessary for compliance and legal purposes.

American companies like Amazon or Meta are similar in this way, but lawmakers and watchdogs are nervous because of Shein’s alleged ties to China. The company was founded in China in 2008 and, according to Shein, they source their products mostly from China.

Sheng Lu, an associate professor of fashion and apparel studies at the University of Delaware, has been researching Shein for the last few years and has been trying to pin down just how many different styles of clothing Shein sells in a year.

Lu estimates they can offer over 1 million different kinds of products in a single year, “far exceeding any retailer currently available in a market,” he said.

That massive churn of products may not cost consumers a lot of money, but some critics say it does come with a price. Some consumers have started pushing back on the company and designers who have collaborated with the brand.

Shein said in a statement to ABC News, “We 100% believe in ethical practices in all capacities and in doing our due diligence have not seen any substantive evidence definitively showing unethical practices.”

In the summer of 2023, a group of designers filed a RICO lawsuit accusing Shein of numerous violations.

“They allegedly are taking the artwork from the designer without paying any kind of a royalty to the designer, and they’re putting it on their own products, and they’re selling it as if it’s their own designs,” attorney Dyan Finguerra-Ducharme, co-chair of Pryor Cashman’s Trademark Practice, told ABC News. “And that is copyright infringement if those allegations are proven.”

In a statement to “Impact,” Shein said, “This claim is built on nothing but conjecture and conveniently placed buzzwords. We have asked the court to dismiss the lawsuit and we will continue to defend ourselves against these claims that are without merit.

ABC News found at least 53 lawsuits alleging copyright infringement against Shein and its related companies. Most of the cases were settled or dismissed, but over a dozen are still ongoing.

Cline says she is also concerned about the lack of transparency of Shein’s suppliers, many of which are in the manufacturing hub of Guangzhou, China.

“They don’t have a close relationship with these factories. They don’t provide their customers with really any information about who their factories are, and what life is like inside of those factories,” Cline said.

Shein has repeatedly declined requests for an interview. Dozens of manufacturers in the area working with Shein also turned down requests for comment, citing confidentiality agreements.

Meanwhile, social media influencers show off their merchandise to their followers in what has come to be known as “#SheinHauls,” linking directly to the retailer for people who want to purchase the same items.

Madison Toth, one of Lu’s students, points to the role of social media in the success of brands like Shein.

“You see somebody wearing it, you like it…and you can just immediately click it and buy it and it’s at your door the next day,” Toth said.

ABC News’ Allie Weintraub contributed to this report.

Copyright © 2023, ABC Audio. All rights reserved.