China's fast-fashion spy machine: How shadowy teen brand Shein uses algorithms to harvest data on its users and find out what they want to buy - before its mega-factory spits the clothes out at rock-bottom prices
- Fears mounting at senior Government level about Shein's surveillance tactics
- Industry insiders say company is spying on unsuspecting customers by using social media sites and apps collecting vast amounts of customer data
- MP Tom Tugendhat has accused the brand of ‘surveillance capitalism’
It's the Chinese ultra-fast fashion brand taking over teen wardrobes by offering the latest styles at rock-bottom prices. Millions post on social media every day about their ‘Shein hauls’ – parcels bursting with dirt-cheap garments ordered from the clothing giant’s factory in Guangzhou.
But concerns are mounting at a senior Government level about the sinister surveillance tactics employed by Shein to get ahead of its rivals.
Industry insiders say the shadowy company – pronounced ‘She-in’ – is spying on unsuspecting customers by using social media sites and apps, collecting vast amounts of data on what its customers view and like, then instructing its factories to churn out copies at a lower cost than its competitors.
Output can change almost in real time to match what the company’s powerful algorithms predict will be in demand based on tracking their users’ online behaviour.
Tom Tugendhat, chairman of the Foreign Affairs Committee, has accused the brand of ‘surveillance capitalism’ and is demanding the secretive company come clean about its financial affairs and links to the Communist regime.
Concerns are mounting at a senior Government level about the sinister surveillance tactics employed by Shein to get ahead of its rivals. Pictured: SHEIN x GEORGIA TOFFOLO global collection launch
Writing in today’s Mail on Sunday, Mr Tugendhat says Shein has a ‘data collection network to rival many of the world’s intelligence agencies’ which would not be permitted without the agreement of the authoritarian regime. ‘I’m convinced many of its customers don’t have a clue what they are giving away,’ he adds.
The scale of Shein’s operation is bewildering – it is estimated to be one of the fastest-growing e-commerce outfits in the world. The company, thought to be worth £10 billion, already has a near-stranglehold on the US market, second only to Amazon, and is fast catching up in the UK.
Its popularity lies in the fact that its garments are astonishingly cheap, and reflect the latest trends. Between 700 and 1,000 new styles, many costing under £10, are uploaded every day.
Such inexpensive clothing has also been blamed for Britain’s waste mountain, with an estimated 10,000 items of clothing being sent to landfill every five minutes. Cheap clothes, including Shein’s, are often made of polyester which, when washed, produce microfibres that end up polluting oceans.
For Shein to make so many lines effectively, it must first understand what its customers want, which it does by spying on users across the web and via its mobile phone app.
Agreeing to be tracked gives Shein almost unfettered access to your behaviour online – the other clothing brands and individual garments you look at, holidays you might search for, or your likes and interests from social media sites.
Industry insiders say the shadowy company – pronounced ‘She-in’ – is spying on unsuspecting customers by using social media sites and apps, collecting vast amounts of data on what its customers view and like. Picture: File image
It also uses other search tools including Google’s Trend Finder, which offers data on what people are searching for in real time, to help predict the styles customers want, and gear up its manufacturing and advertising effort accordingly.
Anyone prepared to wade through Shein’s 5,800-word privacy policy will find an eye-opening list of just how much data is being collected. It tracks how you arrive at the site, including search terms that send you there, the pages you view and in which order, the time you spend on each page and which images you click. However, Shein insists it collects less data than other companies, adding that its processes are compliant with privacy laws and follow industry standards.
One person who has managed to build up a comprehensive picture of Shein is China-based analyst Matthew Brennan, who is researching the company for a new book. ‘Each new item is a bet,’ he says. ‘Even the best fashion companies have a difficult time predicting demand. If you’re making 1,000 of each garment and they don’t sell, you’re left with markdowns which can really drag on the financials.
‘Zara pioneered the practice of making small quantities in the 1990s but Shein has taken it to another level. They can use the data they harvest to create a new item within a week and the data will help them accurately estimate predicted sales within minutes of it going live.
‘They can ramp up production fast and that’s where their real-time aspect works. Shein can see how many people are looking at an item, how many people are putting it in their cart, and how many people are sharing it on social media. Once it hits a certain threshold, the factory manager receives a message on their phone telling them to make more. There’s no human interaction – it’s all automated, which is impressive.’
Tom Tugendhat, chairman of the Foreign Affairs Committee, has accused the brand of ‘surveillance capitalism’ and is demanding the secretive company come clean about its financial affairs and links to the Communist regime
Shein doesn’t always get it right. Last year, it sparked controversy by selling traditional Muslim prayer mats as ‘rugs’, and a necklace featuring a swastika. It has also regularly been accused of copying boutique designer brands, breaching copyright. An algorithm makes sure the most popular designs are advertised to customers who might be interested within moments of a garment going live, a speed which Brennan says is unrivalled.
All of this relies on having a captive audience who want to browse its website and use its app – and that is not in doubt. Hannah Thoreson, 31, a systems engineer, said she is ‘absolutely hooked on Shein’.
‘If you have the app it constantly spams you with notifications: 10 per cent off here, or some new collection has dropped. But it’s not the prices, which are the same as other fast-fashion brands, that appeal to me. It’s their ability to stay five minutes ahead of the curve with the trends, and the overall style is just so much better than stuff in a similar price range and even some more expensive brands.’
Customers also do Shein’s advertising for them. While it uses an army of influencers including Made In Chelsea’s Georgia Toffolo and pop star Katy Perry on social media, it also encourages customers to post details of their ‘Shein hauls’ on sites including Chinese-owed video sharing site TikTok.
With 6.2 billion views, Shein was the most talked-about subject on the platform last year.
Customers can benefit from a loyalty points system in which they can earn money off their purchases simply for logging into their account on a daily basis – another source of data, as well as encouraging repeat business.
It was rebranded Shein in 2015 and moved production to Panyu, Guangzhou, known for its garment factories. Picture: File image
But despite its success, relatively little is known about the company or its ultimate intentions. Its secretive founder, Chris Xu, also known as Yangtian Xu or Sky Xu, started Shein as SheInside in 2008. Originally buying up designs from warehouses and selling them on, the company switched to designing its own items in 2010.
It was rebranded Shein in 2015 and moved production to Panyu, Guangzhou, known for its garment factories. From here, everything is packaged and shipped across the globe. Shein clearly has ambitious expansion plans. It has branched out into goods for pets, homeware, childrenswear and make-up. In January it also made a bid for the Topshop brand, indicating it is serious about the UK market.
Today it employs about 7,600 people and is hiring thousands more. There are 314 IT vacancies alone advertised on its website. But there are no references on the site to Shein being Chinese. In fact, it originally claimed to have started in New Jersey, although this reference has since been removed.
Shein says the Chinese government ‘does not have any stake or control in the company’ and that a its commitment to customer’s privacy is of ‘paramount importance’.
But that does not persuade Mr Tugendhat. He writes: ‘Every keystroke and every page we view is translated into code and sent East.
‘No wonder the Chinese Communist Party is happy for that to continue.’
TOM TUGENDHAT: China's Communist Party is behind the deeply sinister 'surveillance capitalism' trend that powers billion-dollar brands like Shein
Like many things that crop up online, it seems too good to be true. Shein is a Chinese fashion company that promises low prices and almost limitless choice. It even seems to know what you’re thinking.
Going on holiday? Before you’ve even booked the flight, it is instructing workers in Shenzhen to make the top you’re going to want for the beach.
As you’re browsing TikTok, it knows which rival brands you’re considering and getting their designs copied and available to you faster and cheaper.
No wonder it’s become a runaway multi-billion-pound success. What’s not to like? Well, that depends on what the real price is you’re paying. And I’m convinced many of customers don’t have a clue what they are giving away.
When you download the company’s app, you are essentially opening the door for its workers in the Pearl River Delta to know everything about your life.
Trackers on your phone and computer know what you’re looking at and how long you’ve looked.
Tom Tugendhat (pictured) believes China's Communist Party is behind the deeply sinister 'surveillance capitalism' trend that powers billion-dollar brands like Shein
Every moment you spend online is a moment on sale. And I don’t mean Shein’s cheap fashion lines – I mean you.
The company’s business model is a sinister cross between surveillance and capitalism.
Instead of taking goods to market and seeing what you will buy, Shein is taking you to market to see what it can sell.
We can see what the company’s anonymous coders and algorithms make of the information they glean from spying on your computer browsing – the products they offer you are plain to see.
But we don’t know what else they do with that information. Shein isn’t open like other companies. We don’t know its profits or its losses. It doesn’t publish figures.
Instead of corporate information there are influencers. Shouldn’t we know who’s profiting from us?
This raises questions for everyone, not just those who are more comfortable sharing their every thought and dream with people on the other side of the world who don’t share our ideas of privacy.
Are we happy that surveillance fashion is the way our country pays for the surveillance state we’ve seen emerge in Xinjiang?
Shein is a Chinese fashion company that promises low prices and almost limitless choice. Pictured: Georgia Toffolo attends the launch of the SHEIN x Georgia Toffolo collaboration in February 2020
The amazing thing behind all this is that there’s no secret to what’s really happening. Over the past year, Beijing’s rulers have made clear they don’t believe in rivals to the Communist Party, either political or commercial.
Billionaire Jack Ma, whose Ant Group rivals Amazon, has been silenced. Didi, a ride-hailing service like Uber, has been ordered to hand over control of data after floating on the New York exchange, rather than in Hong Kong.
As the China Research Group I chair has shown, Chairman Xi Jinping has made it plain that the free market is not free and there’s no illusion who really holds the power.
So, one thing we know for sure: Shein wouldn’t be able to collect the data it does without top-level contacts in the Communist Party saying it’s OK.
With a data collection network to rival many of the world’s intelligence agencies, and with so many willingly handing over their every desire, why are we so many relaxed about Shein? Well, not everyone is.
British firm Gymshark, whose brilliant founder Ben Francis has made a fortune from selling gym kit around the world, is being undercut by the Chinese rival.
Shein is selling versions of items he’s designed at a fraction of the price. Almost identical copies are getting to market faster and cheaper and with seemingly fewer obstacles. How can that be?
The New York Post reported almost identical leggings are £36 from the British outfitter, but £9.50 from Shein. How is that commercially possible?
As The Mail on Sunday reported last year, there are a few possible explanations. Everything from copycat designs, poor manufacturing quality and Royal Mail subsidies collude to construct an advantage others can only dream of.
Over the past year, Beijing’s rulers have made clear they don’t believe in rivals to the Communist Party, either political or commercial
But the key to the company is not the making but the marketing – particularly how it responds to the data we give away as we browse TikTok, Instagram and other social media sites.
Every keystroke and every page we view is translated into code and sent East. Every teenage dream, every whim, is converted, packaged and sold. That’s the reality of the social contract we’ve signed.
No wonder the Chinese Communist Party is happy for that to continue. They may not be supplying labour from prison factories of Xinjiang to keep costs down, but the party will be essential to Shein’s success as it seeks global commercial dominance.
From its Beijing headquarters, the genome-sequencing company BGI Group is working with the Chinese military and selling prenatal tests to pregnant women.
It’s collecting genetic data from millions around the world, which provides them with data on countries thousands of miles away.
This gives China a huge potential advantage in creating a new generation of pharmaceuticals and more.
Other countries have already begun to address Beijing dominance. The US couldn’t accept that Chinese-owned gay dating app Grindr should hold its data in a jurisdiction that practises mass incarceration and espionage on others. It forced the company to be returned to American ownership.
This isn’t about competition any more. It’s not capitalism the way Adam Smith understood it. Instead of the hidden hand of the market, we’re seeing the secret hand of the state.
This is the growth of surveillance capitalism sold to us as a convenience, but it’s really a cage, a worrying economic revolution every bit as seismic as Communism and just as hard to topple.
Modern, global trade is about so much more than goods. Once we protected our steel industry to ensure we could always make warships and cannons in times of crisis.
Today, economic power comes from services, everything from accounting and law to online dating and shopping.
That’s why we urgently need to update how we respond. If Apple can put conditions on the data that apps can harvest on its phones, then shouldn’t our Government act to protect our people from exploitation? It’s not just clothes that Shein has on sale – it’s us.
https://news.google.com/__i/rss/rd/articles/CBMidWh0dHBzOi8vd3d3LmRhaWx5bWFpbC5jby51ay9uZXdzL2FydGljbGUtOTkzNjExMy9Ib3ctc2hhZG93eS10ZWVuLWJyYW5kLVNoZWluLXVzZXMtYWxnb3JpdGhtcy1oYXJ2ZXN0LWRhdGEtdXNlcnMuaHRtbNIBeWh0dHBzOi8vd3d3LmRhaWx5bWFpbC5jby51ay9uZXdzL2FydGljbGUtOTkzNjExMy9hbXAvSG93LXNoYWRvd3ktdGVlbi1icmFuZC1TaGVpbi11c2VzLWFsZ29yaXRobXMtaGFydmVzdC1kYXRhLXVzZXJzLmh0bWw?oc=5
2021-08-28 21:06:29Z
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