Refutation Between Fast Fashion And "Moral Consumption"

Core content

　　1、 Environmental pollution, "modern slaves", design plagiarism, fast fashion brands are constantly facing public relations crisis;

　　2、 Fast fashion is controversial and sustainable fashion is growing rapidly;

　　3、 The industrial revolution of China's industry 4.0 promotes real-time fashion and subverts the European and American markets;

　　4、 The epidemic situation triggered consumption degradation in European and American markets, and consumption manipulation highlighted the two sides of generation Z;

　　5、 Geopolitics, epidemic situation, environmental and social responsibility, cultural blind area, China's sea going brand is facing many challenges.

In November 2021, tiktok, a subsidiary of bytecombeat, launched the women's independent station dmonstudio to accurately benchmark the Chinese women's wear brand sheen. However, according to an official announcement from dmonstudio, the platform ceased operation on February 11. As the most representative enterprise of China's overseas brands, sheen does not seem to be able to change the determination of more Chinese clothing brands to go abroad.

With the digitalization of supply chain and the strong ability of commercial operators, Chinese fast fashion brands are gradually winning the competition with local fast fashion brands, but these brands still need to Facing more challenges beyond commercial operation In particular, the local market has questioned the sustainable development of the environment, the governance mechanism, and how to form a benign interaction with a wider range of social stakeholders. ?

Refutation between fast fashion and "moral consumption" ?

Since UNIQLO settled down in Shanghai in 2002, fast fashion international brands have entered the Chinese market one after another, and in recent years, distribution channels have been sinking. Local fast fashion brands' rapid replication mode has occupied the market, and fast fashion consumption has become the mainstream fashion consumption mode in China. However, in the western world where "fast culture" has a long history, this business model has encountered many challenges in terms of morality and sustainability issues. The "fast fashion" brand is experiencing a series of public relations crises. 　　

In a report entitled style that's sustainable: a new fast fashion formula, McKinsey said that between 2000 and 2014, global per capita clothing purchase increased by about 60%, clothing production doubled, and consumers retained clothing for about half of the time 15 years ago. By shortening the production cycle and updating the latest styles quickly, fast fashion brands enable shoppers to buy more clothes with high frequency. At the same time, the number of product lines of European clothing companies has more than doubled - from two per year in 2000 to about five per year in 2011. As the price growth of clothing lags far behind the overall price growth level, the "low price" of products has prompted consumers to change their attitude towards consumption in the field of clothing. They almost regard low-cost clothing as disposable goods. Some data show that consumers discard clothes after wearing them seven or eight times.

Different from its innovation ability in business model, fast fashion's technological innovation ability in the process of garment production and recycling is "weak": from planting cotton to dyeing and washing, garment making needs to consume a lot of water and pesticides, and emit a lot of greenhouse gases. According to McKinsey's calculation, the production of 1 kg of fabric will produce an average of 23 kg of greenhouse gas; At the same time, it is often difficult to recycle garments made of mixed materials. Of every five newly produced garments, three are landfilled or incinerated within a year.

The low price of fast fashion products comes from the lean supply chain. However, this business model innovation involves "plagiarism design" and "labor exploitation". As for plagiarism, Huffington Post once commented in an article: "the clothes produced by fast fashion brands look like they have been taken off the runway directly.". A lawyer explained that "fast fashion retailers such as Zara and H & M are able to produce and sell clothing styles that are almost identical to designer brands because, in essence, there is no copyright protection for fashion design in American law.".

In addition, fast fashion brands in the supply chain management are faced with labor conditions, including child labor, low pay and health and safety risks. In recent years, there have been reports about low wages, unsafe working environment and even fatal of workers in upstream garment factories. Referring to fast fashion, people even associate it with the "sweatshop" in the 19th century. From the general point of view in the west, in many cases, conditions in sweatshops are similar to prison labor. Both H & M and UNIQLO have been criticized for using sweatshops, and in 2020 boohoo faces investigation for being accused of "modern slavery.".

From "fast fashion capitalism" to "fast fashion slavery", some new words come into the public view, and it is difficult for fast fashion brands to separate their close relationship with "Exploitation".

"Anti fast fashion" Revolution: slow fashion movement, pure fashion and other sustainable fashion have gradually entered the mainstream culture

On April 24, 2013, Dhaka garment factory collapse in Rana Plaza, Dhaka District, Bangladesh, pushed the issue of fast fashion labor conditions to the forefront. Carry Somers orsola de Castro then organized the fashion revolution, a non-profit global campaign aimed at systematically reforming the fashion industry to improve the transparency of the fast fashion industry's supply chain. They designated the anniversary of the worst garment factory disaster in history as fashion revolution day and held annual events - between 2014 and 2020, millions of people around the world called on brands to answer "who made my clothes?" (who made my closures), the topic tag got viral spread on twitter.

On April 24, 2013, an accident in Dhaka, Bangladesh, killed 1127 people. This is the worst disaster in the history of the garment industry. (source: the New York Times)

In May 2015, director Andrew Morgan linked the fast fashion industry to consumerism, capitalism, globalization, structural poverty and oppression in his documentary the true cost, The social and environmental costs of fast fashion industry supply chain are pointed out. This further promoted the consumer's "anti fast fashion" sentiment. In the same year, with the international community's growing concern about "modern slavery", the British government announced on June 30 that fashion brands with a turnover of more than 36 million pounds must disclose whether they have made efforts to eliminate slavery in the supply chain. One after another of questioning and protest forced Zara, H & M and other fast fashion enterprises to change the way of brand narrative, although some brand behavior can not get rid of the suspicion of "floating green".

Fast fashion has been criticized, and sustainable fashion takes advantage of it.

The term "slow fashion" was first proposed by Kate Fletcher in 2007 and has attracted more and more attention in recent years. As a part of anti consumption, "slow fashion" has become a marketing strategy for many clothing brands to cater to the value proposition of "anti fast fashion". It redefines the relationship between production activities and people, the environment and animals. Contrary to industrial fashion, slow fashion involves the use of local craftsmen and environmentally friendly materials. Its goal is to protect the craft (humanistic care) and the natural environment, thus providing value to both consumers and producers.

According to the research report jointly released by BCG, sustainable apparel coalition and higg CO in 2020, "sustainable development plans and commitments have become the norm in luxury accessories, sports, fast fashion and discount retailing in the clothing, footwear and textile industries long before the outbreak. The sustainable development efforts of enterprises are embodied in two aspects of environment and society, "including consumption of water, carbon and chemicals, responsible procurement, utilization and disposal of raw materials, and health, safety, welfare and compensation of workers".

The new crown crisis has further deepened European consumers' awareness of sustainable consumption, which provides an opportunity for fashion brands to "restate" their value proposition of sustainable development. According to a survey conducted by McKinsey in April 2020, 57% of respondents said that they had made significant changes in their lifestyle to reduce the impact on the environment; More than 60% of the respondents said they would try to recycle and buy environmentally friendly packaging products; 75% believe that a trustworthy brand is an important purchasing factor - building trust and transparency between businesses and consumers becomes crucial.

The growing enthusiasm of Western consumers for environmental protection has pushed capital and brands into sustainable fashion. On November 3, 2021, allbirds, a sustainable footwear manufacturer, raised more than $300 million in its initial public offering, becoming the first "sustainable" IPO. The company's share price soared 91% on its first day of listing, valued at $4.1 billion.

On January 27, 2022, burberry received a GBP 300 million "sustainability linked loan" from llyds Bank - less than 18 months after the brand launched its sustainability bond in September 2020. In fact, Prada and Cr é DIT Agricole Group signed a 50 million euro 5-year sustainable loan agreement as early as 2019, setting a precedent for the industry to sign sustainable loans. According to the agreement, the loan interest rate will be reduced when the brand achieves the sustainable development goal.

In addition, the fashion industry is paying more and more attention to animal welfare. At the beginning of the new year, moncler and Dolce & Gabbana announced their participation in the zero fur campaign. As an alternative to animal leather, vegetal based "pure leather" has attracted the attention of fashion brands. Mycoworks, a San Francisco based start-up of animal leather substitutes, recently won $125m in round C financing after it entered the public eye with a Victorian travel bag made of mushroom skin made of "mushroom mycelium" in cooperation with Hermes.

Fast fashion 3.0 "real time fashion": Chinese women's wear brand subverts European and American market

At the same time, Chinese "real-time fashion" women's wear brand Sheen has been growing wildly in its territory.

In May 2021, sheen replaced Amazon, leaping to the top in the number of shopping app downloads on Apple's IOS platform in 54 countries and regions and Android platform in 13 countries and regions.

As early as 2020, sales of sheen have risen to $10 billion, or 7.5 billion, up 250% from the previous year, according to a report from the company. According to earnest, the company's market share has increased rapidly since January 2021, with its share of the U.S. fast fashion market jumping from 13% at the beginning of the year to 28% in June 2021 - which means that sales of sheen are almost equal to the sum of H & M (20%) and ZARA (11%). In the same month, a report said the company was valued at more than $47 billion. (Sheen did not verify sales and valuation data with the media)

According to the incomplete statistics of Yuanqi capital, there have been 10 financing events in China's fast fashion women's wear track from 2020 to 2021. In October 2021, Alibaba launched allylikes to set up overseas fast fashion tracks.

As we all know, "fast fashion" originated from a business model innovation of INDITEX, the parent company of Zara, a Spanish fashion retailer, in the early 1990s. Unlike the nearly a year long production cycle of traditional fashion retailers, Zara abandoned the concept of "fashion season" and launched new styles every few weeks. The success of this business model has prompted other fashion retailers to follow suit, and brands such as H & M, gap and UNIQLO will follow in the next decade.

Behind low price products is an efficient supply chain. In order to reduce costs, fast fashion brands shift most of their manufacturing processes to countries with more "relaxed" labor laws and take advantage of cheap labor. Globalization and division of labor play an important role in this process.

In the mid-1990s, young brands such as ASOs, boohoo, fashion Nova and so on entered the fast fashion track with the advantages of "more efficient and cheaper", which opened a new chapter in the history of "ultra fast fashion". On the one hand, replacing physical retail space with social media as a channel to directly contact millions of young shoppers (D2c, direct to consumers) has further reduced operating costs; On the other hand, relying on search traffic and customer data can help ultra fast fashion brands predict trends more accurately, and can greatly improve the speed of their style design change - the product cycle from design to shelf is shortened to 2 to 3 weeks.

In the 1920s, relying on the advantages of local supply chain, China's overseas women's clothing brands further reduced the fashion production cycle and production costs, and pushed the "production efficiency" to the extreme. It is learned that sheen can shorten the time from design to production from three weeks to three days (usually 5-7 days). At the same time, the mature application of the algorithm greatly improves the addiction of products. So far, real time fashion, which subverts the fast fashion industry, was officially born.

The term "real time fashion" first appeared in an analysis report by Matthew Brennan. On the one hand, it is the consumer culture of "anti fast fashion" in European and American markets, and the other is the real-time fashion that further accelerates "fast fashion". How to correctly understand this group of seemingly contradictory phenomena? In the context of the growing enthusiasm of European and American consumers for environmental protection, how can China's overseas brands grow against the trend? Does real time fashion solve the problems faced by the fast fashion industry? What challenges will China's overseas brands face in the future?

The innovation of real-time fashion business model originates from the industrial revolution of "made in China"

Different from the previous two business model innovations, China is the country to welcome the birth of fast fashion 3.0. Behind the innovation of brand business model is the industrial revolution that upstream is experiencing.

The response speed of Sheen's leading industry comes from the brand's full chain, transparent and real-time control over the supply chain. Digital supply chain opens every link in the production chain, making real-time response possible. The power to promote the rise of digital supply chain is the new round of industrial revolution industry 4.0.

Traditional supply chain consists of a series of "discrete" siloed processes, such as marketing, product development, manufacturing and distribution. "Digitization" can remove barriers and make the production chain a "ecosystem" that is completely transparent to all participants. In an article entitled "industry 4.0", PwC once said that digital supply network will provide enterprises with competitiveness in "resilience" and "responsiveness", so that they can provide extremely efficient and transparent services to customers.

According to first financial data, using dozens of systems at the same time is very common in the fast fashion industry, while Sheen has only one digital system. "Commodity planning, design, stamping, order, surface and accessories procurement, production, quality control - each link in the clothing production chain, through SCM (Supply Chain Management) system to complete the upstream and downstream collaboration".

For fast fashion brands, every new style and new design is a "bet". The significance of "small order quick return" is that it reduces the inventory risk of fast fashion brands to the greatest extent. Zara has initiated the transformation of flexible supply chain in fashion industry. Since then, every reform of fast fashion industry comes from the test of new brands on the limit of "flexibility". Compared with more "traditional" brands, Sheen has much less orders. It is reported that Zara's first order quantity is between 500 and 3000 pieces, and boohoo's design order volume is about 300-500 pieces, while Sheen has reduced this number to 100-300 pieces. Reduced risk means that brands can take more "bets.". This explains why Sheen's SKU is far beyond the industry's competitors. According to titanium media, Zara has launched more than 12000 SKUs every year, "five times as many as its peers."; In contrast, Hugo data shows that from October to December 2021, the average daily number of new SKUs in sheen is 5000 to 7000.

Compared with the pricing of products in the United States (including discount products), Zara's price range is 7.9-250 US dollars, while Sheen's price range is only 1.5-160 US dollars. The extremely high SKU and the extremely low price seem to be contradictory, but the increase of SKU does not cause the cost burden of the design link to sheen. According to the first finance and economics news, Sheen's KPI assessment of designers is based on the number of their outputs, not on the most basic professional quality of the position - aesthetic ability. Design as a "permutation" of different elements - high click through materials will be retained and low click through materials will be eliminated.

The real-time grasp of data is the key for fast fashion brands to respond to fashion instantly. According to the large amount of data generated by its own platform and search hot words obtained by search engine, sheen can accurately identify consumer demand and put into production quickly. Deloitte once mentioned in a report on new retail that, different from the traditional or e-commerce B2C production mode, c2m in the new retail era starts from customer demand and reshapes the production chain according to customer data, so as to meet the personalized needs of customers. "The traditional mode of B2C focuses on production enterprises and promotes large-scale and standardized assembly line production, which is easy to lead to overcapacity and other problems; B2C of e-commerce mode directly reaches customers through the Internet to save intermediate link costs, but the essence of this mode is still" selling inventory "; under c2m mode, producers directly drive automatic processing by underlying data to meet consumers' personalized needs Demand ".

Consumption degradation and shopping addiction: the two sides of "environmental freedom" and generation Z

The success of any business innovation is the perfect fit of new supply and new demand. In the context of China manufacturing moving towards industry 4.0, sheen relies on digital supply chain and customer terminal data application to push the low price and response speed to the extreme. So do the European and American markets need lower prices, more products and more frequent purchases?

Sheen's target customers are mostly z-generation people in Europe and the United States. The company once called it "a brand that most Americans over the age of 30 haven't heard of.". As early as 2017, Fung global retail & technology released a report, pointing out that it is the consumer's demand for "immediacy" that forces fashion retailers to continuously reduce their production cycle. In 2019, Forbes pointed out in an article entitled "Dear enterprise: generation Z doesn't want to hear" please wait a moment ". Generation Z is the most impatient generation. "They need instant experiences and want everything to be done on their phones. They can't look away from their mobile devices," says zviki Ben ishay, chief executive of lightico.

Real time fashion brands use "agile production" to meet the "instant" demand of generation Z consumers, and its "low price" corresponds to the "consumption degradation" in the European and American markets. Different from East Asia's intergenerational culture and upbringing habits, Western consumers over 18 years old tend to be more independent in economy. In order to obtain tuition and living expenses, they often pay financial expenses through loans or part-time jobs. This determines the limited disposable income of generation Z in the west, and the new crown crisis has further changed their consumption and saving habits. In a survey conducted by Yahoo Finance, about 58% of 2000 millennials and z-generation respondents in the United States have set new savings goals, more than 30% of them admit to launching "financial budgeting" for the first time, and 39% use new methods such as apps or spreadsheets to track their budget habits. The epidemic is changing the way young consumers manage their personal finances.

During the epidemic period, the reduction of American spending is one of the important reasons for the surge of personal savings. According to the U.S. Bureau of economic analysis, the U.S. personal savings rate jumped from 12.7% in March to a record 32.2% in April 2021. Meanwhile, consumer spending fell by 12.6%. Millennials and generation Z have made similar efforts to save. From the beginning of 2020 to the beginning of the summer of 2021, 61% of young people save at least $1000, and one in ten save more than $5000.

According to a survey conducted by McKinsey on more than 2000 British and German consumers in April 2020, 88% of respondents expected the economy to recover slowly or even decline. Consumers' pessimistic expectations of the economic situation have greatly reduced their spending on fashion. More than 60% of consumers said they had reduced their spending on fashion, and about half expected the trend to continue even after the outbreak. In addition, about 50% of generation Z and millennials are spending less - younger consumers tend to buy products that are cheaper than before.

In the same report, however, the data delineate two sides of young people. 67% of respondents believe that the use of sustainable materials is an important purchasing factor, and 63% believe that brands promote sustainable development in the same way. Forbes even calls generation Z "the sustainability generation.".

To be sure, the environmental passion of generation Z promotes the rapid development of sustainable fashion. However, consumption intention and consumption behavior are not always consistent - the growth of real-time fashion is due to the brand's "manipulation" of consumer behavior.

Moral consumption is a kind of restraint. For financially strapped young people, getting more products at the same expense is a near "freedom" experience. However, compared with "consumption addiction", financial support is no longer the biggest challenge for young people to stick to their values. Flexible supply chain is to real-time fashion brand, and algorithm is to social media. Sheen is no less addictive than tiktok. The "behavior manipulation" of real-time fashion brand completely breaks the "self-discipline" that consumers strive to abide by. For many young consumers, real-time fashion is hard to escape, and moral consumption becomes a luxury.

A fish in the net, a cultural blind spot: can real-time fashion continue to write the future in the post epidemic era?

The rapid increase of market share can not be a strong basis for the "survival" of enterprises. In fact, from geopolitics to the new crown crisis, a series of accidental factors have contributed to the rise of sheen. The brand is so dependent on its driving factors that once these conditions change, the enterprise will face great uncertainty.

Since 2016, packages worth less than $800 can enter the United States duty-free. In 2018, the trump government launched a trade war and imposed tariffs on Chinese products to raise their prices. However, small value goods remained tax-free during this period. At the same time, China introduced tax relief and exemption for cross-border e-commerce.

In recent years, Chinese enterprises have moved from "made in China" to "Chinese brands". There are many middle and high-end brands with high price range positioning in the Chinese market. However, most of the fast-growing brands in China's D2c offshore enterprises have very low prices. The "tax loophole" of US trade policy towards China may be one of the important reasons.

Geopolitical tensions may explain why Sheen's rise has been quiet. The brand has made great efforts to cover up its "Chinese citizenship". Even if you trace the raw materials of their products, it takes a lot of effort - only by clicking on the links, can consumers find a word in a picture of a warehouse loading dock hidden at the bottom of "logistics and transportation" on the "about us" page. In fact, Reuters revealed in a recent report that Xu Yangtian, the founder of the brand, is even considering changing his nationality. Although the news has not been officially confirmed by the company, it can be concluded that geopolitics has great influence on the survival of cross-border e-commerce in China.

Although sheen refuses to expose itself in front of the media, it's hard for the brand to keep a low profile when the "fish that missed the net" has grown into a "big fish" - its success has begun to cause controversy in the United States. In an article entitled

In addition to "policy loopholes", the growth of China's instant fashion brands has also benefited from the new crown epidemic. According to the data of East research, from January to mid June 2021, the total volume of fast fashion market in the United States has increased by 15%, while Sheen has increased by nearly 160% in the same period, which shows that the growth of the brand is closely related to the outbreak of Xinguan epidemic.

In gen Z is emerging as the sustainability generation, Forbes compared the impact of the coronavirus pandemic on generation Z with the impact of the 2008 great recession on Millennials. During the great recession, the career dreams of millennials were denied. Just like those who experienced the great depression in the 1930s, people began to live with less money - "cheap became fashionable, Chinese made goods flooded the market.". It can be seen that the commercial sustainability of China's overseas brands, which rely on cheap goods to grab the market, depends on when the European and American markets get out of the "economic recession".

In addition to the uncertainty brought about by the continuation of "consumption degradation" after the epidemic subsided, China's instant fashion brands are also facing many challenges. "Low price" and "high efficiency" enlarge the advantages of fast fashion, but also enlarge the problems of fast fashion.

While sheen pushes the speed of fast fashion to the extreme, it further intensifies the problems faced by the industry.

Brands including Levi Strauss and Dr Martens have filed infringement charges against the company; Sheen has been questioned because of the lack of transparency in the supply chain; In addition, the brand has claimed on its official website that it has been certified by the international organization for Standardization (ISO) and conforms to the strict labor standards set by international organizations such as SA8000, which is denied by relevant organizations; The brand image of sheen in terms of environmental impact is even worse. Titanium media once pointed out in an article that "in the public documents of California court, it can be found that Sheen has violated the relevant requirements of California for environmental protection and safety. This situation first occurred on December 21, 2015, and continued to occur until March 2019.".

In addition, the "cultural blind area" is also a common challenge for China's overseas brands. As a benchmark enterprise of China's sea going enterprises, Sheen has also made low-level mistakes that are hard to be forgiven by consumers. In July 2020, the brand caused controversy because it sold Muslim prayer mats as an interesting home decoration; A few days later, they actually put on a "Nazi necklace", and angry consumers launched a severe attack on sheen on social media.

The accurate capture of Sheen's consumer preferences relies entirely on artificial intelligence, which does not involve any human intervention. Algorithms and data may be able to fill the brand's lack of in-depth understanding of "regional culture", but it is difficult to avoid the launch of new products that are culturally or historically offensive. It can be seen that the application of "artificial intelligence" can not help the brand to avoid falling into the trap of "cultural blind zone".

The development process of fashion industry is not just a competition about speed. Only by balancing benefits and responsibilities can instant fashion brands become friends of time.