Is sustainability still a priority for a post-IPO Shein? A close reading of the Chinese-founded e-tail juggernaut’s public filings ahead of its forthcoming Hong Kong offering suggests otherwise, one watchdog group says.
Of the $1.8 billion Shein intends to raise, only 10 percent would go toward sustainability, while 80 percent would be split evenly between technology and global marketing, Public Eye said in a recent analysis. Also telling is that the final version of the retailer’s prospectus excises the phrase “We believe in doing well by doing good” from an earlier draft, raising questions about “whether this claim was ever more than a marketing exercise,” according to David Hachfeld, the Swiss nonprofit’s fashion lead.
Shein, which built its empire—seemingly overnight—on $5 tops and $10 dresses that cannily kept pace with rapidly shifting trends, did not respond to a request for comment.
One central feature of the documents, Hachfeld said, is the extent to which the Singapore-headquartered company delegates responsibility for working conditions, product quality and legal compliance to manufacturers, merchants and other business partners, which are also required to indemnify the retailer for any breaches.
Referring to this approach as “outsourcing as a business model,” he said that Shein appears “less like a traditional fashion group than a tech company orchestrating a vast network of contracted partners,” spanning not only manufacturing but also large swaths of warehousing, logistics, marketing and design.
“Despite claiming more than 370 in-house designers, the launch of around 4,700 new styles per day suggests that most creative work is also externalized,” Public Eye said. “The company’s plans for an even more profitable future reinforce this picture: technology and the expansion of its tech workforce come way before all other priorities.”
The perceived offloading of labor risks also means that Shein, by its own admission, cannot guarantee full compliance with its supplier code of conduct despite the regular third-party audits it conducts through its Shein Responsible Sourcing program. By failing to “assume more responsibility by changing its purchasing practices, redistributing risks or bringing necessary key functions in-house,” Public Eye said, Shein frames widely documented problems such as excessive hours, exploitative wages and unsafe conditions as “compliance failures by suppliers rather than as consequences of Shein’s business model.”
Nor is the proprietary Large-scale Automated Test and Reorder model it touts as a way to maximize operational agility and cost efficiency, while ensuring “sustainable and responsible growth,” anything more than an “actual driver of excessive overtime and unstable work organization,” Hachfeld said.
“The company argues that its operating model ‘by design helps us minimize overproduction and inventory waste,’ but it defines overproduction only as goods produced but not sold,” he said. Doing so, Hachfeld added, overlooks the core issues of its ultra-fast fashion business, including ever-shorter production cycles, thousands of new styles debuting every day and “constant aggressive marketing to push consumption.”
It’s been a long road for Shein, which on Monday started the highly anticipated process to sell 280 million shares at between HK$47.60 ($6.07) and HK$49.50 ($6.31) per share, valuing it at nearly $27 billion, or roughly a quarter of its peak valuation in 2022, when it captured nearly one-fifth of the entire global market. The ecommerce upstart, which quickly outstripped legacy rivals like H&M and Zara in online apparel sales during the pandemic, saw its New York, then London, listing aspirations unravel amid mounting regulatory and political scrutiny.
Even so, Hachfeld said, Shein’s filings suggest that it sees the introduction of European regulation, including the Corporate Sustainability Due Diligence Directive, the Ecodesign for Sustainable Products Regulation, the French anti-fast fashion bill and extended producer responsibility fees “not as the existential threats that they are, but merely as business challenges that can be managed.”
At the same time, Public Eye’s analysis found substantial transparency gaps. Shein applied for a waiver from full disclosure requirements, meaning the filing covers only a small fraction of the group’s 100-plus subsidiaries, leaving the ownership of major entities, including the Chinese company Guangzhou Shein Supply Chain Management, obscured.
“Shein also fails to disclose names and places of warehouses, logistics providers and contract manufacturers,” Public Eye said. “This makes it impossible to know whether unauthorised subcontracting may be taking place. Rather than providing transparency, the filing illustrates how much of Shein’s corporate, logistics and supplier structure remains hidden from public scrutiny.”
The prospectus also codifies a weighted-voting-rights structure that gives the founders “near-total voting control,” leaving public shareholders with “minimal influence over corporate decisions,” Hachfeld said.
Perhaps most revealing among the disclosures, however, is that Shein spends considerably more on moving and selling products than on making them. In 2025, the Missguided owner racked up more than $19 billion in fulfillment expenses, which, along with $6.2 billion in marketing costs, accounted for some 60 percent of net revenues. By contrast, the cost of sales, including product manufacturing, constituted just over 3.2 percent of revenues.
“This leaves very limited room for manufacturers’ margins, especially given the company’s extremely low retail prices,” Hachfeld said, noting that a likely driver of the “extreme” fulfillment costs is Shein’s reliance on air cargo, which is both expensive and “highly climate-damaging.” In its prospectus, the company also said the elimination of the U.S. de minimis exemption contributed to higher fulfillment expenses as a share of net revenues.
Taken together, the disclosures point to what Public Eye called the “far less concrete backing” sustainability receives compared with Shein’s “other and real priorities,” despite its inclusion as one of three pillars in the company’s “Future Plans” section.
While the filing details roadmaps for technology and growth, including plans to hire 1,500 to 2,000 additional tech specialists and expand global marketing teams, its social and environmental commitments remain “broad and short on measurable targets, dedicated investments or staffing plans,” the organization said.
“Shein claims to support the fashion industry’s transition toward circularity,” Public Eye wrote. “Yet the initiatives highlighted in the filing remain alarmingly marginal compared with the scale of its business.” Among them, it said, is the Shein Exchange resale platform, which listed 84,700 products in 2024, or less than 0.01 percent of the 1 billion annual orders for new products on its principal marketplace.
Similarly, Hachfeld called the 10,500 meters of deadstock that Shein repurposed in 2025 “negligible” for a company of its scale. He also described its threshold for garments to qualify as made with preferred materials—a minimum of 30 percent of, for example, recycled versus conventional polyester—as “strikingly low.” This, Hachfeld said, amounts to circularity at a “token” level.
“Despite prominent sustainability rhetoric, its priorities remain firmly centered on technology, speed and growth,” he added. “Rather than aiming for a transformative material shift, these objectives suggest a business-as-usual model framed in the language of sustainability.”
