"As the midday sun blazed down on Panyu, a suburb in the southern city of Guangzhou, silence took hold. Just an hour earlier had been the sounds of trucks shuffling goods along roads still under construction and whirring sewing machines pumping out clothes.
The garment-making district labelled as "Shein village" for the central role it plays in making clothes sold on the fast-fashion platform — was resting. The workers had vanished underneath their stations before reappearing after a ritual lunchtime nap, common across Chinese workplaces from factory floors to office towers.
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But going to the heartland of Shein's supply chain, it was clear that its low prices are in spite of, not because of, labour costs, which have been rising in China as the working-age population shrinks and young migrant workers shun factory jobs for the lower-paid service sector.
Factory workers that source to Shein typically get paid between Rmb7,000 ($982) and Rmb12,000 a month, depending on how many clothes they finish. By contrast, the average wage for other blue-collar workers in the area is between Rmb5,500 and Rmb6,500.
Part of the reason the clothes are cheap is, well, because they are cheap. One factory manager held up a baggy dress - probably destined for the US or UK — and joked she would never sell such low-quality clothes to a more discerning Chinese clientele. She says she uses cheaper fabrics for Shein orders than for Alibaba's Taobao, because the domestic platform gives more money to the factories to cover their costs.
Shein has also cut out expensive middlemen by shipping goods directly from warehouses in China to shoppers in the west - a model that also has the benefit of the great majority of its packages bypassing import duties."
"Shein manages supply chain deftly but labour costs are rising fast" no FT de 27.08.2024.
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