From Shein to Zara: What’s Really Changed—and What Hasn’t

In 2026, fast fashion isn’t dead, but it’s under pressure like never before.

In recent years—and with increasing intensity in recent months—the industry has entered a phase of systemic scrutiny: regulatory, media, and cultural. Yet, despite investigations, accusations of greenwashing, and new European regulations, the major players continue to grow, adapting faster than the criticism they receive.

The two faces of fast fashion: under accusation, but expanding

Brands like Shein and Temu have redefined the speed of the system, taking it to the next level: ultra-fast production, extremely low prices, and global digital distribution. Their model—often referred to as ultra-fast fashion—has attracted the attention of European authorities, particularly for issues related to transparency, product safety, and commercial practices.

At the same time, historic giants like Zara, H&M, and Primark continue to dominate retail, maintaining high volumes and competitive margins while striving to reposition themselves in terms of sustainability.

Greenwashing: From Perception to Legal Issue

In recent years, greenwashing has gone from an ethical criticism to a legal issue.

Several independent reports and investigations (including those by the Changing Markets Foundation and other European organizations) have highlighted significant discrepancies between brands’ “green” communication and the reality of the materials used.

A telling finding concerns so-called sustainable collections: large-scale analyses have shown that some “eco” lines feature a high percentage of synthetic fibers. Specifically:

Some collections labeled as sustainable contained up to 70% or more synthetic materials;
in several cases, the use of polyester was even higher than in standard collections;
only a marginal share of the garments analyzed (about 6%) included recycled synthetic materials, often derived from PET bottles (source: Changing Markets Foundation).
The critical point is structural: synthetic fibers—even when recycled—remain fossil-based and present significant limitations in terms of true circularity. Their widespread use therefore contradicts the “green” narrative promoted by brands.

This evidence has helped open investigations and strengthen regulatory pressure in Europe.

Europe: towards a strict regulation

The European Union is accelerating regulatory action, with measures that directly impact the fast fashion model:

• Unfair Commercial Practices Directive (updated): aims to limit vague or misleading environmental claims;
• Green Claims Directive (in the process of being implemented): will require companies to scientifically substantiate sustainability claims;
• Sustainable and Circular Textile Strategy: introduces requirements for durability, recyclability, and transparency;
• Extended Producer Responsibility (EPR): brands will be increasingly responsible for the end-of-life of products.

Some European countries are also considering or introducing specific measures against ultra-fast fashion, including targeted taxes and advertising restrictions.

At the EU Environment Council, Germany, France, and the Netherlands called for a coordinated European approach to address the sector’s environmental impacts, emphasizing how the ultra-low-cost, ultra-high-frequency production of clothing significantly contributes to resource consumption, emissions, and product end-of-life crises. Germany, in particular, has urged the European Commission to introduce more stringent requirements within the Ecodesign Regulation, including criteria on durability, recyclability, and recycled content, as well as strengthening extended producer responsibility for textiles. The stated goal is to correct a structural competitive distortion: according to the German position, the production of very low-cost disposable garments should no longer represent a market advantage, while online platforms and cross-border sales models should be subject to the same environmental and compliance standards applied to European manufacturers.

France: The first systematic attack on ultra-fast fashion

The turning point comes from Paris. At the end of June 2026, the French Parliament approved an unprecedented law against ultra-fast fashion, targeting platforms like Shein and Temu.

The legislation introduces:

• financial penalties per item (up to approximately €6 in 2026, gradually increasing to €10 by 2030);
• restrictions or bans on advertising and influencer marketing for these players;
• a system based on environmental impact and the logic of overproduction.

It is a historic step: for the first time, a European state directly targets the economic model of ultra-fast fashion.

However, it is also a controversial law. After years of negotiations and lobbying, the final text was scaled back and primarily affects non-European players, largely excluding large groups like Zara and H&M.

Reputation: The New Battlefield

Reputational risk has become a strategic asset. In recent years, several brands have been the subject of:

• legal actions for misleading environmental communications;
• public reporting campaigns;
• investigations into working conditions and the supply chain.

Shein, in particular, has repeatedly been at the center of controversies related to transparency, workers’ rights, and product safety. At the same time, platforms like Temu have quickly entered the radar of European authorities for similar issues.

Even brands like H&M and Zara, despite having more structured sustainability strategies, have been criticized for the gap between declared objectives and actual impact.

Zara, H&M, Mango, and Primark in recent years:

have been criticized for the gap between storytelling and actual impact
have scaled back or reformulated some “green” communications
are investing in alternative materials and traceability

But the model remains unchanged: high turnover, high volumes, competitive prices.

Fast Fashion Lawsuits, Fines, and Charges

Shein’s Paradox: Under Attack… as It Opens Stores

The Shein case perfectly encapsulates the contradictions of the system.

In November 2025, while French authorities initiated proceedings to suspend the platform due to the presence of illegal products, the brand opened its first physical space in the world in Paris.

In the meantime:

• Oltre 100 cause per copia di design
  Shein è uno dei brand più citati per violazione di proprietà intellettuale, con cause da parte di designer indipendenti e marchi come Ralph Lauren e Dr. Martens. Molti casi si chiudono con accordi economici.
• €40 million fine in France (2024–2025)
  Shein has been fined by French authorities for deceptive commercial practices, particularly the use of false discounts and manipulated prices, violating European consumer protection regulations.
• Over €22 million in new fines in France (2026)
  French authorities have imposed additional fines for:
  • lack of transparency on prices and sellers
  • violations of the right of withdrawal
  • absence of environmental information on products
• €1 million fine in Italy for greenwashing (2025)
  The Italian Competition Authority (AGCM) determined that Shein was disseminating vague or misleading environmental claims, especially in its “evoluSHEIN” line, which was presented as sustainable without adequate evidence.
• EU Investigation for Misleading Practices (2025)
  The European Commission has accused Shein of:
  • false discounts
  • manipulative countdowns
  • misleading product information
    possibly violating EU consumer law.
• BEUC Official Complaint for “Dark Patterns” (2025)
  The European consumer organization has reported Shein for using manipulative digital mechanisms designed to drive compulsive purchasing, in violation of the Unfair Commercial Practices Directive.
• Over 100 Design Copying Cases
  Shein is one of the most frequently cited brands for intellectual property infringement, with lawsuits filed by independent designers and brands such as Ralph Lauren and Dr. Martens. Many cases result in settlements.

Another Shein paradox:

Shein launched a €250 million circularity fund for circular economy initiatives, while simultaneously exceeding those of Zara, H&M, and other major fashion brands. According to the “Fossil Free Fashion Scorecard 2025” analysis by environmental group Stand.earth, Shein increased its absolute emissions by over 170% in just two years. Same brand, two opposing narratives in the same timeframe.

H&M: privacy and greenwashing

• €35 million fine (Germany, 2020)
  H&M was fined by the Hamburg authority for employee privacy violations, after collecting sensitive data (including personal and family information) without consent.
  → One of the largest GDPR cases in the retail sector.
• Accusations of greenwashing (various European investigations)
  H&M has been criticized by authorities and NGOs for:
  misleading “Conscious” labels
  unverifiable environmental communications
  Some of the brand’s online tools have been modified or removed after transparency concerns.

ZARA (Inditex): accusations and disputes

• Design Copying Lawsuits
  Zara has been repeatedly accused of copying designs from independent designers and small brands, resulting in several legal disputes over time (often resolved out of court).
• Criticism over Environmental Claims
  Inditex has also been targeted by NGOs and watchdogs for environmental claims deemed ambiguous or unprovable, as part of European investigations into greenwashing.

BOOHOO: scandals and violations

• Labor Scandal and Investigations in the UK (2020–2021)
  Boohoo was implicated in a case of workers’ rights violations in its supply chain (factories in the UK with wages below the legal minimum).
  → Not a single significant fine, but a case that led to government investigations and a reputational meltdown.
• Accusations of Greenwashing
  Among brands criticized for improperly using “sustainable” claims without verifiable basis.

Temu and the platforms: the new regulatory front

Temu represents acceleration. The global marketplace model—based on extreme volumes, ultra-low prices, and hyper-fragmented supply chains—is now under scrutiny by European authorities for:

• product safety
• information transparency
• compliance with digital regulations

The French law sets a precedent: other countries are considering similar measures, while the European Commission is working on broader instruments to regulate non-EU e-commerce.

TEMU vs. SHEIN: A legal battle between the platforms

• Cross-Suit Lawsuits (USA, 2022–2023)
  Shein accused Temu of improper use of images and content
  Temu accused Shein of anti-competitive practices and supplier intimidation
  → A prime example of aggressive competition in the ultra-fast model.

Key Insight:

• The litigation is not episodic: it is systemic and multi-layered (consumer law, IP, ESG, digital).
  The main accusations focus on three areas:
  1. Greenwashing (false or vague environmental claims)
  2. Consumer manipulation (discounts, UX, dark patterns)
  3. Intellectual property (systematic design copying)
• Fine penalties are rising rapidly → a sign of a regulatory paradigm shift.

Is AI making fast fashion even faster?

The acceleration of fast fashion is no longer just a question of supply chain. It is, increasingly, a question of technological infrastructure.

In recent years, the systematic introduction of artificial intelligence has transformed the operating model of major players—particularly those in ultra-fast fashion—shifting competitive advantage from production to product generation and selection.

Artificial intelligence isn’t simply optimizing fast fashion. It’s changing its underlying operational logic, shifting the focus from the traditional creative cycle to a data-driven system, in which the product is increasingly the result of a predictive process.

The most emblematic case is that of Shein. According to industry analyses, the platform is capable of releasing up to 10,000 new designs per day, while academic studies indicate a capacity of between 2,000 and 10,000 new styles daily, with development cycles reduced to 3–7 days. These numbers do not represent an incremental evolution compared to traditional fast fashion, but a true shift in industrial scale.

This acceleration is driven by intensive use of AI for real-time trend sensing. Proprietary algorithms continuously analyze data from social media, online searches, and purchasing behavior, enabling the identification of emerging microtrends and their rapid translation into products.

The result is a radically different model from the industry’s historical one. It is no longer a linear sequence—design, production, sales—but an iterative, software-driven system:
massive generation → testing → selection → scalability.

It is a cycle that not only responds to demand, but actively helps generate it through the hypertrophy of supply.

A study by the Stanford Graduate School of Business defines this paradigm as “ultra-fresh fashion“: a system based on the extreme frequency of launches and the breadth of supply, capable not only of responding to demand, but of actively creating it. The continuous introduction of new products fuels a sense of permanent novelty that stimulates consumption, reducing the perceived life cycle of garments.

In this context, AI does not so much accelerate physical production—which remains constrained by industrial limits—as it does the speed of decision-making. Companies don’t necessarily produce faster: they decide more quickly what to produce, in what quantities, and when to scale.

This approach is further amplified by the “small batch, rapid test” model: initial micro-lots, often of just a few hundred units, are released to market and monitored in real time. Only products that perform well are rapidly scaled up. Industrial risk is reduced, while variety explodes.

The consequences are also visible on the supply side: platforms like Shein can host hundreds of thousands of items simultaneously, a density impossible to sustain without advanced automation.

Yet this efficiency creates a structural paradox. While AI promises greater precision—and therefore potentially fewer unsold items—it also contributes to intensifying the production-consumption cycle, increasing pressure on resources, supply chains, and waste management systems.

Several independent studies and analyses highlight a structural paradox. While AI can theoretically improve demand forecasting and reduce waste, in practice it tends to increase the variety and frequency of launches, fueling a more intense consumption cycle. The literature on sustainability and AI in fashion also points out that the overall environmental effects depend less on the technology itself and more on companies’ strategic use of it.

In other words, artificial intelligence isn’t simply making fast fashion faster. It’s transforming it into something else: a predictive, adaptive, and hyper-scalable system, in which creativity is subordinated to data and the product becomes a variable optimized in real time.

More than an evolution of fast fashion, it’s a reconfiguration of the relationship between data, desire, and production.

Where is Zara going?

In recent months, Zara has accelerated a transformation that marks a departure from the traditional fast fashion model, while remaining anchored to its core philosophy of speed. The direction is twofold: upgrading its positioning and deeply integrating artificial intelligence.

On the industrial and retail levels, the Inditex group has undertaken a rationalization of its physical network: fewer stores, but larger, more technologically advanced, and strategically located. The number of Zara stores has fallen below 1,500 for the first time in almost 15 years, while the average store size and experiential level of the spaces are increasing.
This evolution is accompanied by a clear attempt to elevate the brand’s perception, including through collaborations with luxury brands and a greater focus on quality and styling.

At the same time, Zara is systematically investing in artificial intelligence, but with a less visible approach than ultra-fast players like Shein. This is what the industry is increasingly calling “quiet AI”: silent integration, distributed throughout the supply chain, geared more toward operational efficiency than technological spectacle.

There are many concrete signs. On the commercial front, Inditex has stated that recent growth is also supported by the use of AI, with sales expected to grow by 2025. On the customer experience front, Zara has introduced tools such as AI-based virtual try-on, already active in dozens of markets, with millions of uses in the first few months: a technology designed not so much to accelerate desire, but to reduce purchasing uncertainty and reduce returns, one of the main hidden costs of e-commerce.

Even more significant is the application of AI in content production and marketing: Zara uses generative systems to create product images from real models, dramatically speeding up campaign times and costs.

The key point is that Zara is not chasing ultra-fast fashion on the terrain of extreme quantity or pure speed. Instead, it is building a hybrid model: less dependent on hyperproduction, more focused on precision, data, and margins.

In this sense, Zara’s “quiet AI” represents a significant evolution: not a visible acceleration of the fashion cycle, but an invisible optimization.

However, an open tension remains: even if AI is used to improve efficiency and forecasting, the ability to react in real time to demand continues to fuel a system based on rapid product rotation.
Zara is changing shape, but it isn’t abandoning the paradigm of speed: it’s simply making it more sophisticated.

The consumer: more aware, but not enough

While awareness is growing, purchasing behavior remains ambivalent.

Price, accessibility, and speed continue to prevail. Fast fashion isn’t just a production model: it’s a response to a market demand that, for now, shows no sign of abating.

Evolution or adaptation?

2026 marks a turning point:

• A European state directly taxes ultra-fast fashion
• The EU systematically investigates global platforms
• Greenwashing enters the legal scope

Yet, the system does not retreat.

Shein continues to grow. Temu expands its presence. Major European groups adapt without changing their structures.

Fast fashion is not in crisis. It is under pressure.

Companies are refining their strategies: more cautious communication, investments in alternative materials, greater attention to regulatory compliance. While the core of the model—fast production, high volumes, low prices—remains intact.

The real turning point will only come when regulation, innovation, and consumer behavior converge.

Until then, the system will continue to do what it has always done: adapt, without truly changing.

The decision came after the French consumer watchdog (DGCCRF) discovered disturbing ads on the Shein marketplace: sex dolls with “child-like” features and even prohibited weapons, such as machetes and large knives.
In response, Shein announced a global ban on the sale of sex dolls on the platform, temporarily suspended the “adult products” category in France, and took action against the responsible sellers.
The investigation is ongoing, and French authorities have also involved the European Commission. Until proven otherwise, access to the site has not yet been completely blocked, but the suspension procedure is active. Shein took immediate measures to limit the reputational damage.

The paradox is clear: on the one hand, France appears to be targeting the ultra-fast fashion model with aggressive policies—such as a proposed law to impose a penalty on low-cost imports, fines for unfair business practices (e.g., Shein was fined €40 million for misleading discounts), and strong political action against Shein.

On the other hand, France is granting Shein prestigious physical access, thanks to a partnership with Société des Grands Magasins (SGM), which operates BHV and other stores in France, allowing for an “offline test” of the brand.

This means “banning online” but “accepting a physical store” at the same time—a contradiction that reflects real tensions between political values, economic interests, and market dynamics.

Why did France give the green light to the physical store?

Here are some hypotheses that help explain why:

Local business strategy: Shein states that France is “a major global fashion market” and that the physical opening serves to “respond to the demand for real-world contact” (Retail Gazette). In other words, from a traditional retail perspective (department stores, foot traffic), the deal makes commercial sense for SGM.

Differentiation between online and offline: The regulations France is implementing often primarily concern e-commerce, imports, low-cost shipping, and deceptive discounting practices. Opening a local physical store may seem like a more “controllable” environment.

Regulatory framework still evolving: Fines, anti-fast fashion rules, and import controls are coming but are not yet fully implemented or may have time limits. France appears to be “making the rules,” but in the meantime, the market continues to shift.

Economic and negotiating pressures: French department stores likely saw the agreement as an opportunity to boost sales (increased footfall, new products). Although politically criticized, there is significant private interest.

Possibility of control and oversight: The fact that the physical store was physically “visible” in Paris, within a regulated space, may have induced the authorities to accept the opening while simultaneously maintaining pressure on online sales.

Timing and lobbying: The fact that the opening caused a stir may also indicate that deals were made before the anti-fast-fashion law was in effect, or that the negotiation took place in a context where the brand was able to enter “before everything was clear.”

Social Reactions and Comments

The store’s opening was accompanied by protests: demonstrators holding signs (“From Colonization to Your Closets”) gathered outside the BHV.
But not everyone was opposed: one customer explained that the appeal for many is simply the price:

“With €200 a month, I can buy 50 T-shirts from Shein, or three made in France..”

(source The Guardian)

This comment underscores how ultra-cheap fast fashion responds to real economic demand, even among those on limited incomes. France’s action has not been confined to the national level: the government has written to the EU, requesting action under the Digital Services Act (DSA) (source: euronews).
The European Commission is involved, and the case could set a precedent for how member states can regulate digital platforms selling potentially illegal or morally controversial items.
Furthermore, according to the Brussels Times, French authorities have threatened permanent bans if certain products return to Shein’s platforms.

In Paris, Deputy Mayor Nicolas Bonnet Oulaldj openly criticized the agreement between Shein and SGM, declaring that allowing an ultra-fast fashion giant to enter the traditional retail landscape is “incompatible” with the city’s environmental and social goals. “Shein cannot be blamed for all the problems affecting French ready-to-wear,” reacted a spokesperson for the Shein platform in France. The Chinese giant plans to open five more discount clothing and accessories stores in the Galeries Lafayette department stores in Dijon, Reims, Grenoble, Angers, and Limoges. “This decision,” stated Anne Hidalgo, Mayor of Paris, “is contrary to the environmental and social ambitions of Paris, which supports responsible and sustainable local retail.” (source: Ansa.it)

BHV owner Frédéric Merlin responded firmly to the criticism, calling the partnership with Shein “the beginning of a new adventure” that combines e-commerce and traditional retail (source: The Guardian). According to him, the products sold in the store are manufactured by Shein itself (“made by Shein in Shein factories”) and are not solely third-party suppliers—a detail that could influence liability assessments.

Things We Don’t Know

There doesn’t appear to be an official French statement stating, “We allowed the physical opening because…” The explanations are drawn primarily from Shein’s statements.
It’s unclear whether the business license for the physical store comes with special conditions or whether there are specific monitoring agreements with local authorities.
It’s not yet clear how future legislation or French government action will impact that physical store (for example, inspections, restrictions, sanctions).
It’s unclear to what extent the physical opening is seen as a “loophole” with respect to online regulations (one possibility); there are no sources that explicitly state this.

Why aren’t Primark and Uniqlo receiving the same pressure as Shein?

Not all major “low-cost” clothing brands are receiving the same public and political pressure that Shein is currently experiencing, as the comparison with Primark and Uniqlo demonstrates. Both brands are present and expanding in France: Primark has announced a €200 million investment in France and Spain to expand its retail network by 2026 and has some of the most profitable stores in the French market; Uniqlo, for its part, continues to strengthen its presence with flagship stores, such as the renovated one in the Paris Opera district, and a large and stable network.

The reason these brands aren’t experiencing the same pressure as Shein?

• Different business models: Primark and Uniqlo operate primarily through established physical stores; they don’t rely on ultra-low-cost imports shipped individually from non-EU countries, as Shein does. This makes them less vulnerable to certain anti-import regulations or micro-parcel taxes.
• Clearer regulation: Many of the measures proposed by France (and other countries)—such as the tax on low-cost parcels—are aimed primarily at cross-border e-commerce, not at brick-and-mortar retailers with established chains.
• Visible and local presence: Having physical stores implies local responsibility, European-wide inventory management, and more direct control, elements that can make their presence more acceptable (politically and socially) compared to an ultra-fast, digital-only player.
• Sustainability and image strategy: Uniqlo, in particular, focuses heavily on “LifeWear” and an image of quality, functionality, and durability, which can mitigate criticism of “disposable” fashion. Primark, despite being “fast fashion,” has a very different model from Shein, with different margins and operating methods. So does greenwashing make a difference?

Primark e Uniqlo non sono però completamente fuori dal radar: l’UE ha richiamato tutti i grandi retailer, compresi questi due marchi, a maggiore trasparenza sulla tracciabilità e sulle performance ambientali attraverso il nuovo quadro normativo del Green Deal, dal Digital Product Passport al divieto di greenwashing e claim ambientali vaghi. La differenza è che, pur essendo criticati per il modello fast fashion, Primark e Uniqlo rientrano in una struttura regolatoria già conosciuta e gestita dall’Europa, mentre Shein rappresenta una sfida nuova: un “gigante digitale” che accelera più velocemente delle norme che cercano di incasellarlo.

Primark and Uniqlo aren’t completely off the radar, however: the EU has called on all major retailers, including these two brands, to increase transparency on traceability and environmental performance through the new Green Deal regulatory framework, from the Digital Product Passport to the ban on greenwashing and vague environmental claims. The difference is that, despite being criticized for their fast fashion model, Primark and Uniqlo fall within a regulatory framework already known and managed by Europe, while Shein represents a new challenge: a “digital giant” that is accelerating faster than the regulations that seek to pigeonhole it.

Reflections

The Shein case is emblematic of the fact that the transition to more sustainable fashion is not linear and full of contradictions. On the one hand, France seems to declare “enough with low-cost fast fashion,” while on the other, it accepts—without apparent resistance—the physical arrival of one of the protagonists of the model it seeks to limit.

What lessons can we learn?
Legislation may lag behind the market. Anti-fast fashion regulations, import taxes, and restrictions on misleading discounts are still being implemented. Meanwhile, fast fashion brands are expanding.
The “online” vs. “offline” model creates arbitrage: a physical store may appear more respectable or at least more visible, and therefore perhaps “less risky” in the eyes of authorities, than an e-commerce site shipping low-cost packages from abroad.
Public policies can clash with local economic interests (department stores, employment, customer traffic). This can lead to compromises or seemingly contradictory choices.
Finally, it’s a reminder: consistency between political statements and concrete actions is difficult. The effort towards sustainable fashion requires not only regulations, but also control tools, transparency, and perhaps alternative sales models that aren’t just “faster, cheaper.”

The French National Assembly has unanimously adopted the bill aimed at reducing the environmental impact of the textile industry, which will have to continue its legislative process in the Senate. Intended to curb “fast fashion”, the text provides: 

• the ban on advertising for the sale of clothing at rock-bottom prices
• the decision to define fast fashion based on a set number of items placed on the market annually
• an enhanced environmental penalty to make fast fashion products less attractive

Furthermore, companies that sell disposable fashion online will have to display messages near the price on their website that:

• raise awareness of the environmental impact of their products;
• encourage sobriety, reuse, repair or recycling.

In case of violation, companies will incur a financial penalty (up to 15,000 euros).

It’s not a tax

It is incorrectly called a tax but it is a bonus/malus system: the products with the worst environmental impact will not be able to benefit from the bonuses but will be subject to dissuasive sanctions starting from 2025. The ecological penalty will be over product:

• 5 euros in 2025
• 6 euros in 2026
• 7 euros in 2027
• 8 euro in 2028
• 9 euros in 2029
• 10 euros in 2030.

These sanctions should help finance bonuses for the benefit of virtuous companies in the textile sector.

Taxes are generally imposed by governments as mandatory payments on individuals, businesses, or other entities to fund government spending and public services.

Sanctions, on the other hand, are associated with punitive measures for violations of laws or regulations.

While they might work similarly to taxes in terms of their financial impact on businesses, they are not exactly the same.

Will the measures be effective?

From a macroeconomic perspective, the effectiveness of a bill targeting fast fashion companies depends on various factors, including the specific provisions of the bill, the reactions of consumers and businesses, and broader market dynamics. Here are some considerations:

• Elasticity of demand: If consumers are highly responsive to changes in prices or advertising restrictions, then the penalties and advertising bans imposed by the bill could lead to a significant decrease in demand for fast fashion products. However, if demand for fast fashion is relatively inelastic, meaning consumers are less sensitive to price changes, the impact of the bill may be limited.
• Substitution effects: Companies operating in the fast fashion industry may respond to the penalties and advertising bans by shifting their production strategies or diversifying their product offerings. For example, they may focus on producing higher-quality, longer-lasting clothing or explore alternative business models such as sustainable fashion lines. The extent to which they can successfully adapt will influence the effectiveness of the bill as a deterrent.
• Market competition: The fast fashion industry is highly competitive, with numerous companies vying for market share. If only one country implements penalties and advertising bans, companies may simply shift their operations to other countries with more lenient regulations. The effectiveness of the bill could be enhanced if it is part of a coordinated effort across multiple countries or regions.
• Innovation and technological advancements: Fast fashion companies may invest in research and development to find ways to mitigate the environmental impact of their products or improve their sustainability credentials. This could involve innovations in materials, production processes, or supply chain management. The bill may incentivize such innovation by creating market opportunities for companies that can offer more sustainable alternatives.
• Enforcement and government support: The effectiveness of the bill will depend on the French government’s ability to enforce its provisions and provide support to companies in transitioning to more sustainable practices. Effective enforcement mechanisms, together with financial incentives and support for innovation, could help ensure compliance and promote industry-wide change.

From a microeconomics perspective, the sanctions imposed by the fast fashion law can have different effects on the behavior of individual companies and consumers in the fashion market. Here are some of the possible effects:

• Reduced fast fashion production: Financial sanctions and advertising bans can make it less cost-effective for companies to produce and market fast fashion products. As a result, companies may reduce the quantity of such products offered on the market, instead focusing on more sustainable and higher quality product lines.
• Incentives for innovation and differentiation: Penalties can push companies to invest in research and development to develop more sustainable materials and production processes. This could lead to increased innovation in the fashion industry and the creation of differentiated products that stand out for their sustainability and quality.
• Increased retail prices: If companies pass on the costs of sanctions to consumers through retail price increases, this could reduce demand for fast fashion products. Consumers may be willing to pay more for more sustainable or higher quality products, but they may also reduce their overall spending on clothing due to higher prices.
• Changes in consumer preferences: Sanctions and advertising bans can influence consumer perceptions and preferences towards fast fashion products. Reducing advertising exposure to such products could lead consumers to seek more sustainable alternatives or to evaluate brands that promote more ethical and responsible practices differently.
• Consequences for small businesses: The sanctions could disproportionately affect small businesses operating in the fast fashion sector who may have limited resources to comply with the new regulations. This could lead to a reduction in competition in the sector and favor large companies that have greater financial resources to adapt to the new rules.

Pros and Cons

Pros:

1. Environmental benefits: By imposing penalties and advertising bans on fast fashion products, the bill encourages companies to adopt more sustainable practices, such as reducing carbon emissions, minimizing waste, and using eco-friendly materials. This can lead to long-term environmental benefits, including reduced pollution and resource conservation.
2. Market correction: Fast fashion has been criticized for its negative social and environmental impacts, such as exploitative labor practices and excessive consumption of natural resources. The bill provides a mechanism for correcting market failures by internalizing the external costs associated with fast fashion, thereby promoting more socially responsible behavior among companies.
3. Innovation and job creation: The bill incentivizes investment in research and development to develop sustainable alternatives to traditional fast fashion products. This can stimulate innovation in the fashion industry and create new opportunities for businesses that specialize in eco-friendly materials, technologies, and production processes. Additionally, the shift towards sustainable fashion may create new jobs in areas such as sustainable design.
4. Enhanced competitiveness: Adopting sustainable practices can enhance the competitiveness of French fashion companies in both domestic and international markets. As consumer preferences shift towards more environmentally friendly products, companies that prioritize sustainability may gain a competitive edge and attract more customers. This can contribute to the long-term viability and success of the French fashion industry.

Cons:

1. Cost implications: Compliance with the bill’s provisions, such as penalties for fast fashion products and restrictions on advertising, may increase production costs for companies. These additional costs could be passed on to consumers in the form of higher prices, potentially reducing consumer purchasing power and overall demand for clothing. This may have negative implications for economic growth and employment in the fashion industry.
2. Market distortions: The bill may create distortions in the fashion market by favoring companies that can afford to invest in sustainability initiatives over smaller or less financially secure businesses. This could lead to market concentration and reduced competition, potentially limiting consumer choice and innovation in the long run. Moreover, if the penalties disproportionately affect domestic companies compared to international competitors, it may result in market inefficiencies and trade imbalances.
3. Supply chain complexities: Implementing sustainable practices in the fashion industry requires collaboration and coordination across complex global supply chains. Companies may face challenges in sourcing sustainable materials, ensuring ethical labor practices, and maintaining quality standards throughout the production process. This could lead to supply chain disruptions, increased administrative burdens, and higher operational risks for businesses.
4. Unintended consequences: The bill’s provisions may have unintended consequences that negatively impact certain stakeholders, such as workers in the fast fashion industry or consumers with limited purchasing options. For example, restrictions on advertising could affect the livelihoods of workers employed in marketing and advertising roles, while penalties on fast fashion products could disproportionately affect low-income consumers who rely on affordable clothing options.

Shein’s reaction

Next steps

The issue of thresholds, which would define disposable fashion, has come under criticism for being left to the government, with fears it may not be implemented effectively.

Furthermore, the introduction of social criteria to ensure respect for human rights in clothing production has raised debate, with some supporters citing previous scandals such as Rana Plaza. However, others have warned that ultra-fast fashion may not be the right context for establishing global rules against social dumping.

The minister of ecological transition has promised to launch a mission to define social and ecological criteria in the next two months. After being adopted at first reading by the National Assembly, the bill will then have to continue its legislative journey in the Senate. Meanwhile, France’s environment minister has announced plans to propose an EU-wide ban on used clothing exports, seeking to tackle the growing problem of textile waste.

Sources: LCP Assemblée Nationale; Vie Publique; Reuters

Shein

Shein, the popular ultra-fast fashion brand based in China and Singapore, is known for offering a wide selection of fashionable clothing, accessories and beauty products at very affordable prices. It primarily targets a young audience, with an emphasis on the latest fashion trends and a significant presence on social media for the promotion of its products. In his message to investors, Donald Tang, the executive vice president of Shein, said that the company reported its highest net profit in its history in the first half of 2023, a significant achievement compared to the near breakeven in the same period of 2022 He also highlighted that the company’s continued momentum in the United States is solidifying its leadership position in the market. The Chinese e-commerce giant is known for its rock-bottom prices and campaigns targeting Generation Z on social media platforms, including the hugely popular TikTok. We talked about Shein here:Dangerous chemicals, Inside factories, False statements.

Temu

Temu is a new Chinese platform that recently entered America, launched in September last year by parent company Pdd Holdings, linked to Chinese e-commerce Pinduoduo. Behind there is the Chinese founder and businessman Colin Huang, 43 years old, who according to Forbes has a fortune of over 32 billion dollars. Today he is the 39th richest person in the world according to Forbes’ Real Time Billionaires. Temu offers a wide range of products, from clothing to household items, from surveillance tools to household utensils, and the prices initially seem cheaper even than those of Shein. “Shop like a billionaire,” says the new platform. Temu is known for undercutting competitors like Shein and Wish and also offers free shipping and returns, creating the illusion of lower costs overall. Consumers appear to have spent about 20% more Temu products than Shein in May this year. Unlike Shein, Temu sells a wide range of products, not just fashion, and is appreciated by fans for the slightly higher quality of its products compared to rivals. The key to their low-cost model is the direct connection between consumers and suppliers, with Temu mainly taking care of the shipping process. However, there has been criticism regarding the pressure placed on small producers to lower prices at levels that make it difficult to achieve sustainable profits.This practice has raised concerns about possible ethical implications, such as pay cuts and extended working hours for workers. Additionally, Temu has received criticism for lacking formal brand affiliations, often selling knock-off products that raise issues of copyright infringement and quality control. The Better Business Bureau (BBB) gave Temu a C-minus rating amid complaints from customers, who often complain that the cheap prices hide delivery or quality issues. Reviews on TikTok vary greatly, with some extremely negative and others full of praise, some of which appear to be influenced by discount codes or affiliate links, raising questions about the degree of objectivity of the reviews.

The fight

Shein and Temu focus on ultra-fast fashion, producing thousands of new items a day, and can offer lower prices thanks to the lack of expensive physical stores like those of Zara and H&M. Shein is the market leader, but there are signs that its smaller rival is catching up or even racing ahead: in May, total U.S. spending on Temu eclipsed that of Shein by 20%, according to Second Measure. Both companies are locked in an antitrust battle in a growing industry, expected to reach $185 billion in global sales by 2027.

Temu’s lawsuit claims that Shein dominates more than 75% of the U.S. ultrafast fashion market, exercising a monopoly. Shein will likely try to demonstrate that the ultra-fast fashion market is not distinct and that the company competes in the traditional fast fashion market. A Shein spokesperson responded that Temu’s lawsuit is “baseless and we will defend ourselves vigorously.” Temu also accuses Shein of forcing major manufacturers to accept exclusive deals and threatening to impose fines if they don’t comply.

In recent months, the two have increasingly clashed with each other. Shein obtained a temporary restraining order, in a separate case accusing Temu of using its copyrighted images in product listings, to stop sales of products offered for sale on Temu. Additionally, Shein sued Temu alleging that Temu had enlisted online influencers “to make false and deceptive statements” about Shein to promote its products or statements such as: “Shein is not the only affordable option for clothing ! Check out Temu.com, cheaper and much better quality.”

“For a long time we have exercised considerable restraint and refrained from pursuing legal action,” Temu told CNN in a statement about the new lawsuit against Shein. “However, Shein’s escalating attacks leave us with no choice but to to take legal measures to defend our rights and the rights of merchants who do business with Temu, as well as the right of consumers to have a wide variety of products at affordable prices.”

The battle could last years and require significant resources on both sides. However, it is also possible that the two companies will reach an out-of-court settlement.

The question of whether the ultra-fast fashion market exists or not seems to be fundamental, a group of companies that only market a huge number of low-priced products.

Temu and Shein in comparison

Temu:

• Customers can purchase a variety of products at rock-bottom prices that not only fall into the category of fashion but also household utensils, electronics, etc.
• It includes various styles in the catalog, such as casual wear, formal wear, sportswear, outerwear and seasonal collections. There is also a section dedicated to plus sizes.
• It focuses on affordable prices and tries to offer a sense of luxury and indulgence through its Shop like a Billionaire marketing campaign.
• It does not produce its own items but operates as a marketplace.
• It has not been fully scrutinized for its ethical practices. It emphasizes the promotion of sustainable and ethical brands, focusing on quality and responsible consumption. It claims to offer unique, eco-friendly products while supporting small businesses and artisans.
• It offers more affordable prices than Shein, with seasonal discounts lowering prices even further, and some customers find the quality of their products to be slightly better, but it can vary between sellers.
• Target Audience: Focuses primarily on the average consumer in the United States. It has around 17 million active users, although it is a newer platform.
• It presents itself as a large online retailer and offers a discovery platform based on users’ individual preferences.
• It uses marketing tactics such as discounts, offers and user incentives, with a marketing budget of $1 billion for 2023. Use hauls on TikTok and collaborate with influential figures. Cross-dressing and unboxing aim to influence consumers and create a strong connection with the brand.
• Customer Satisfaction: Has an average rating of 3.4 stars from 820 reviews.
• It provides free returns within 90 days and the possibility of changing products.
• It has customer service described as mediocre, but often offers vouchers as compensation for any inconvenience.

Shein:

• It is a fast fashion brand that mainly targets young women, offering fashionable and trendy clothing at low and accessible prices.
• It offers a wide variety of clothing, including dresses, tops, bottoms, activewear, swimsuits and more. The catalog also includes a wide range of accessories such as jewellery, sunglasses and bags to complete different outfits.
• It is headquartered in China and Singapore, with R&D and logistics centers in several locations.
• It is not considered an ethical or sustainable brand. It claims to produce small quantities of each design, but puts thousands of styles on the market every day. Applying an ultra-fast fashion business model, it prioritizes speed and convenience, aiming to meet the ever-changing demands of fashionable consumers.
• It offers cheap prices but with questions about the durability and quality of the products.
• Target Audience: Target Gen Z and Millennials worldwide. It has around 43 million active users.
• It offers a curated user experience with an algorithm-based recommendation system.
• Primarily use micro-influencer marketing with a few hundred to a few thousand followers on platforms like Instagram, YouTube, and TikTok. It has a large social media presence, with influencers often showing off their purchases made from the brand. Shein offers them free products on a monthly basis. Some of these influencers receive commissions of 10 to 20% of sales.
• It tends to be less convenient than Temu.
• It has an average rating of 2.6 stars from 4,380 reviews, indicating lower satisfaction among customers.
• It provides free returns within 45 days.
• It has automated customer service that may not always effectively resolve specific customer issues.

Ultra-fast fashion

Ultra-fast fashion is an identifiable business model compared to fast fashion. The global ultra-fast fashion market was valued at $17 billion in 2020 and is expected to continue growing. According to MarketResearch.Biz, ultra-fast fashion differs from fast fashion in supply chain strategies, avoids excess inventory, focuses on internal sourcing, on-demand production and shorter delivery times, from a few days to a week, with a combination of agile and responsive procurement strategies. Times become even faster, weeks become days. New styles are increasing, up to thousands per day.

Ultra-fast fashion companies adopt a pull model instead of the conventional push model: from the data continuously collected on customers, products are made within a couple of weeks, unlike the traditional model in which products are offered on the market by pushing retailers to sale, with an accumulation of warehouse stocks. Ultra-fast fashion brands  incite consumers to buy quickly with digital marketing tactics like fast fashion companies but with much more and more precise data. Furthermore, ultra-fast fashion companies follow a “trial and repeat” logic. They produce a small batch of products according to the current trend. If the response from the market is good, they move to mass production, otherwise they do not continue production. Furthermore, they have an even faster supply chain, prefer a national production base to shorten delivery times, offer a wider range of sizes and with the lowest possible prices.

In the supply chain of ultra-fast fashion companies, the influencer culture is deeply rooted. These companies rely on TikTok, Instagram and YouTube, where they offer shopping as entertainment. While fast fashion has often taken inspiration from high fashion catwalks, making the latest runway trends accessible, ultra-fast fashion brands follow popular figures more on social media.

Which companies can be considered ultra-fast fashion?

• Shein
• Boohoo Group plc
• Missguided
• ASOS
• Fashion Nova
• PrettyLittleThing
• Cider

Ultrafast companies have been criticized for unethical practices, including piracy, mass pollution, and a disposable production and consumption model. Most clothes are made from unsustainable materials, such as polyester, and of questionable quality, quickly ending up in landfills. Since the offering is based on micro-trends, people are encouraged to wear these items a few times before throwing them away. Furthermore, there are accusations of human exploitation and practices that do not respect workers’ rights. Despite this, we continue to buy from these companies and drive them to record revenues.

Sources: BBC; YourSustainableGuide); CNN; Forbes; Euronews; Market.biz.