Shein’s silence on China cotton use leaves British lawmakers in the dead of night on provide chain

By Helen Reid and James Davey

LONDON (Reuters) – A Shein consultant declined to offer a direct reply when requested by a British parliamentary committee on Tuesday whether or not the net fast-fashion retailer makes use of cotton from China or from its Xinjiang province, a key concern for potential buyers involved about its provide chain.

The repeated refusal by Shein’s basic counsel for Europe, Center East and Africa (EMEA), Yinan Zhu, to reply lawmakers’ questions “bordered on contempt” for the cross-party enterprise and commerce committee, stated Liam Byrne, the committee chair.

Singapore-headquartered Shein, which was based in China in 2012, is awaiting regulatory approvals for an preliminary public providing (IPO) from each Britain’s Monetary Conduct Authority and China’s securities regulator.

Requested about Shein’s provide chain, Zhu stated: “The suppliers we work with, they’re primarily based in China, in Turkey and Brazil, and clearly lots of them are in China.”

She requested the committee for permission to jot down to them about additional questions, when pressed additional on whether or not the corporate sources cotton from China and particularly from its Xinjiang province.

When requested in regards to the IPO, Zhu stated she was not capable of remark.

“For a corporation that sells a billion kilos to UK customers, and for a corporation which is in search of to drift on the London Inventory Change (LON:LSEG), the committee has been fairly horrified by the dearth of proof that you’ve got offered as we speak,” stated Byrne, who appeared visibly exasperated because the listening to progressed.

“You have given us nearly zero confidence within the integrity of your provide chains. You possibly can’t even inform us what your merchandise are constructed from. You possibly can’t inform us a lot in regards to the situations which staff should work in, and the reluctance to reply fundamental questions has frankly bordered on contempt of the committee.”

When requested whether or not the corporate was assured it was in compliance with the UK Fashionable Slavery Act, Zhu stated: “Our place is we’re compliant with related UK legal guidelines.”

CHINESE CONSUMER RISK

Shein has confronted allegations that its merchandise comprise cotton from China’s Xinjiang province, the place the U.S. and NGOs have accused the Chinese language authorities of compelled labour and human rights abuses. Beijing denies any abuses.

Shein has beforehand stated it requires contract producers to solely supply cotton from authorized areas, and that it has a zero-tolerance coverage for compelled labour.

However publicly distancing itself from Xinjiang cotton is dangerous, as retailers which have executed so up to now confronted criticism and boycotts from Chinese language customers, and pushback from Chinese language authorities.

Most not too long ago, Japan’s Uniqlo was slammed on Chinese language social media after a November BBC interview during which Chief Government Tadashi Yanai stated the retailer is just not utilizing cotton from the area.

In a listening to after Shein’s session on Tuesday, Impartial (LON:IOG) Anti-Slavery Commissioner Eleanor Lyons informed lawmakers: “I do not assume they [Shein] are being clear about what’s going on of their provide chains, I’d need to hear extra from them and perceive that they’re really trying into the potential human rights violations inside them.”

Shein, which sells 2.99-pound ($3.75) attire and denims for as little as six kilos on its UK web site, has grown quickly and was valued at $66 billion in a fundraising in 2023.

Shein has not disclosed any outcomes at a bunch stage, however its British enterprise made 1.55 billion kilos ($2 billion) in income in 2023, filings confirmed final yr.

In distinction with Zhu, Temu’s senior authorized counsel Stephen Heary stated the net retailer, a part of Chinese language ecommerce large PDD Holdings, doesn’t allow sellers from the Xinjiang area to promote on its platform.