Why is Shein under fire from UK parliamentary trade body? Details explored

Legislators looking for answers on Shein's labor standards, and claims of forced labor in its supply chains, were incensed when the fast fashion giant's attorney, called to a British parliamentary session earlier this week, sidestepped questions on whether the company sells goods made with cotton from China.

On January 7, 2025 the Business and Trade Committee (BTC) of UK Parliament questioned executives from Shein and its competitor Temu about their sourcing practices and compliance with labor laws.

What is the exact story?

According to sources, Shein, a Singapore-based company that was created in China, is getting ready to list for 50 billion pounds ($62 billion) on the London Stock Exchange in the first quarter of this year.

Due to their ability to sell primarily Chinese-made clothing and other goods at low rates, both international merchants are increasingly becoming well-known internationally.

However, they have come under fire for claims that forced labor may have contaminated their supply chains. Particularly from China's far-west Xinjiang province, where rights organizations claim Beijing has committed grave human rights violations against members of the ethnic Uyghur group and other Muslim minorities.

During the hearing, Yinan Zhu, general counsel for Shein in London, refused to respond to numerous inquiries about whether the company's products contain cotton from Xinjiang or another part of China.

Zhu also did not speculate on whether the corporation was concerned about forced labor in Xinjiang or whether its code of conduct forbids its suppliers from obtaining cotton from that region. She said:

"I don’t think it’s our place to comment on… to having a geopolitical debate."

She claimed that Shein complies with the laws and regulations of all the countries they operate in, saying:

"We are in compliance with relevant U.K. laws."

To guarantee the stability of Shein's supply chains, she emphasized that reputable external businesses do thousands of audits on the company's behalf.

The legislative committee was "horrified" by Zhu's lack of information, said committee head Liam Byrne, adding MPs now have "zero confidence" in Shein's supply chains because of her remarks. MP Byrne further said:

"The reluctance to answer basic questions has frankly bordered on contempt."

The fast fashion brand Shein was launched in China in 2012, and has expanded at a rapid pace. Today the company ships to 150 countries. With sales climbing almost 40% to 1.5 billion pounds in 2023, Shein announced in October that company profitability in the UK had doubled.

Politicians and others, including the independent anti-slavery commissioner of the United Kingdom, have expressed worry about possible ethical and governance difficulties with its proposed listing in London.

Legislators blocked Shein's previous bid to list in the United States, requesting that the company confirm it does not employ forced labor from China's Uyghur minority, which is primarily Muslim.

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Temu

Temu's senior counsel, Stephen Heary, said the company's senior management was worried about forced labor and that Xinjiang-based vendors are prohibited from selling on the international internet marketplace.

Temu's supply chains were questioned in a 2023 US Congressional investigation, which stated that there was a "very high risk" that they included Chinese forced labor.

According to the study, Temu "conducts no audits and reports no compliance system to affirmatively examine" if its suppliers are adhering to the laws governing forced labor in the United States.

The Chinese e-commerce business, PDD Holdings, is the owner of Temu, which was introduced in 2022. Like Shein, Temu has gained a lot of customers by offering a wide range of affordable products from apparel to home goods, which are supplied from China.