Shein Faces Scrutiny Over Xinjiang Cotton and IPO Transparency
Chinese e-commerce giant Shein faced intense criticism from UK lawmakers during a January 7 parliamentary hearing, as concerns over its ethical sourcing practices and labor conditions took center stage. The Business and Trade Committee, convened ahead of Shein’s planned IPO on the London Stock Exchange in Q1 2025, pressed the company’s general counsel, Yinan Zhu, on whether its suppliers source cotton from China’s Xinjiang region, known for allegations of forced labor involving ethnic minorities. Zhu repeatedly declined to comment, further fueling tensions.
Committee chair Liam Byrne expressed frustration, stating, “For a company that sells a billion pounds to UK consumers… you’ve given us almost zero confidence in the integrity of your supply chains.” Zhu’s refusal to address questions about Shein’s IPO only deepened lawmakers’ concerns.
Labor Practices Under Fire Amid Fast Fashion Growth
Shein’s rapid ascent in the global fast fashion market has been marred by allegations of unethical practices. A 2023 U.S. House of Representatives report accused the company of using Xinjiang-sourced cotton and highlighted severe labor violations, including 18-hour workdays, poor conditions, and inadequate pay. In 2024, Shein admitted to two cases of child labor and revealed that 0.5% of audited suppliers failed to meet wage standards or delayed payments.
This hearing underscores the growing demand for transparency and accountability in global supply chains. For supply chain leaders, the Shein case serves as a stark reminder of the reputational and operational risks tied to unethical sourcing. As consumer and regulatory scrutiny intensifies, businesses must prioritize robust auditing and compliance measures to safeguard their supply chain integrity.
