Shein more than doubled its profits for the 2023 fiscal year, The Financial Times reported.

Shein, the Chinese fast-fashion brand, raked in $2 billion in profits in 2023, FT reported.That beats the fiscal year of rival fast fashion company H&M.Many of Shein’s customers are Gen Zers and millennials who say they’re environmentally conscious.

It appears we consumed quite a bit of fast fashion last year.

As it seeks to go public, Shein, the Chinese online fast-fashion company, had a blockbuster 2023 with more than $2 billion in profits, according to The Financial Times, which cited four anonymous sources “close to the company.”

The figure means the brand more than doubled its profits from $700 million in 2022, surpassing its fast-fashion rival H&M.

According to Barron’s, H&M reported a net profit of about $840 million in 2023. Zara, owned by Inditex, remains ahead of both competitors, reporting about $5.9 billion in profits. Both companies saw increased net profits from the 2022 fiscal year.

For a generation of shoppers who say they like to be environmentally conscious, that’s a lot of fast fashion — an industry that relies on cheap labor but comes with a heavy environmental cost.

Every second, the fashion industry produces the equivalent of one garbage truck full of textiles that will be dumped in a landfill or burned, according to a United Nations Environment Programme report. It’s also responsible for up to 8% of the world’s carbon emissions, the report said.

Shein, in particular, has been criticized for the lack of transparency behind its supply chain, its contribution to pollution, and for violating labor rights.

Still, the typical Shein shopper is a millennial or Gen Zer. And despite the company’s issues with sustainability and labor practices, more than half of Shein’s customers prioritize environmental consciousness, a report from The New Consumer and Coefficient Capital found.

The study also found that 67% of Shein shoppers are willing to pay extra for a more environmentally friendly product.

Yet, part of Shein’s biggest allure is its low prices. In 2021, the average unit price for its products was $7.90, The Financial Times reported.

A Shein spokesperson did not respond to a request for comment sent during the weekend.

Duality of Shein buyers

This Janus-faced behavior might be attributable to what economists call “stated preferences vs. revealed preferences.”

As Jadrian Wooten, an economics professor at Virginia Tech, previously told BI, it’s the difference between “what we say we want” and “what we actually do.”

Gen Z does appear to be aware of this split. Researchers from Sheffield Hallam University in England found that Gen Zers have a preference for sustainability, but 90% of the respondents say they still reach for fast fashion.

Shein also has shown that it’s aware of its draw and its consumers.

Last year, the company sponsored a group of influencers to tour one of its factories in Guangzhou, China. The goal was to show people that Shein cares about fair labor practices and sustainability.

The reception to the PR campaign wasn’t great. Still, it was a recognition from the fast fashion giant that it knows who its audience is and what they care about.

Shein has also pledged to invest more money into its third-party manufacturers and their employees, and launch a more environmentally-friendly apparel collection, BI previously reported.

It’s unclear what the impacts of those initiatives are. But for now, it’s onward and upward for fast fashion.

Read the original article on Business Insider

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