Unpacking the Hidden Costs of Fast Ecommerce Giants: A Critical Examination of Temu and SHEIN
“Fast fashion is not free. Someone, somewhere is paying the price.” — Lucy Siegle
In recent years, ecommerce giants like Temu and SHEIN have revolutionized the retail landscape by saturating Western markets with a vast array of affordable products. While this rapid expansion and market penetration are noteworthy, it is crucial to critically examine the underlying business practices and their far-reaching impacts.
1. Exploiting Import Loopholes:
Temu and SHEIN have adeptly utilized import loopholes, such as the $800 de minimis threshold in the USA and the €150 limit in the EU, to ship each parcel individually. This tactic allows them to bypass tariffs and taxes, flooding markets with millions of parcels daily. These parcels are equivalent to over 100 cargo jets filled with goods every single day, significantly straining logistics infrastructures and circumventing standard regulatory measures designed to protect local economies. According to a recent House committee report, these brands are responsible for over 30% of packages shipped daily to the U.S. under the de minimis provision of Section 321 of the Tariff Act of 1930, amounting to nearly 600,000 shipments a day as of last year.
2. Driving New Oil Demand in China:
Electric vehicles are expected to displace more than 20 million metric tons of crude oil demand this year in China, equivalent to 10% of the country’s gasoline and diesel consumption. While this is a positive development, crude oil demand in China has nevertheless increased. Why? As demand for gasoline declines, oil companies are shifting their focus to petrochemical products like polyester and other plastics. Temu and SHEIN are major contributors to this shift. Between 2018 and 2023, China’s output of synthetic fibers rose by 21 million metric tons — enough to spin more than 100 billion T-shirts a year. This surge in polyester production directly drives new oil demand, counteracting the environmental benefits achieved in other sectors.
3. Environmental Cost of Polyester and Plastics:
A substantial portion of the products offered by these companies is made from polyester and other plastics, directly contributing to increased oil consumption. Polyester production not only demands a high volume of petroleum but also perpetuates the cycle of plastic pollution, posing a severe threat to our environment. The synthetic fibers shed microplastics into waterways and oceans, further exacerbating ecological degradation.
4. Air Shipping and Carbon Footprint:
The emphasis on speed necessitates that nearly every item is air shipped, amplifying the negative environmental impact. Air shipping is a significant source of carbon emissions, and the sheer volume of parcels being moved by air daily inflates these emissions dramatically. Moreover, this surge in demand for air freight has led to skyrocketing shipping rates, creating a ripple effect across global supply chains and logistics industries. In Germany alone, approximately 400,000 packages arrive daily, equating to nearly 150 million annually. This immense volume requires a capacity surpassing that of a hundred Boeing 777 freighters.
5. Opaque Supply Chains and Human Rights Concerns:
The supply chains of these ecommerce giants remain largely opaque, with limited traceability of where products originate. This lack of transparency raises serious concerns about labor practices and environmental regulations. The House Select Committee on the Chinese Communist Party has linked SHEIN and Temu to numerous import violations and potential human rights abuses. Allegations of forced labor in the Uyghur region and failure to comply with the Uyghur Forced Labor Prevention Act have been reported. Temu and SHEIN are accused of exploiting trade loopholes to avoid import duties and bypass human rights reviews, providing them with unfair competitive advantages over American retailers, who pay millions in import duties annually.
6. Ethical, Legal, and Sustainability Quandaries:
Shein and Temu’s rapid growth has been fueled by unethical labor practices, unsafe working conditions, and aggressive marketing strategies that drive overconsumption. Reports indicate that Shein employees work upwards of 75 hours a week in conditions that lack proper safety measures and contracts, allowing the company to add approximately 2,000 new items to their website daily. This rapid production leads to rapid consumption, resulting in more clothes ending up in landfills. The trend cycle has accelerated to a micro level, with fashion items coming in and out of style in mere days. Additionally, these companies rely heavily on air freight, further increasing their environmental footprint. Political scrutiny is also intensifying, with the House Select Committee on the Chinese Communist Party pointing to significant import violations and human rights issues tied to forced labor in the Uyghur region. This situation underscores the need for regulatory oversight and sustainable practices to mitigate the adverse impacts on both the environment and human rights.
The data is clear: while progress in one industry, such as the automotive sector, can lead to significant environmental gains, unchecked growth in other areas, like fast fashion, can neutralize these benefits. Common-sense regulation is needed to ensure that the rapid expansion of ecommerce giants does not come at the cost of our environment and future sustainability.
