Who’s Behind ‘Shut Down Shein’?

Jasmin Malik Chua
·7 min read
3

Shut Down Shein burst almost as out of the blue as the fashion Goliath it’s determined to dismantle.

Despite being just over a month old, the coalition of “like-minded individuals and businesses,” as its inaugural press release in April put it, is holding nothing back, whether in media statements, digital ads or newsletter sponsorships. On its website at ShutDownShein.com, it accuses the fast-growing Chinese e-tailer of being the “biggest national threat you’ve never heard of,” replete with “dangerous and reprehensible behavior” such as using forced Uyghur labor and exploiting U.S. customs laws to circumvent billions in tariffs. Shein, the organization claims, is also turning American consumers, mostly teenagers and young women, into “unwitting accomplices” as they play the role of “importers,” allowing the company to dispatch its products in individual shipments under a price threshold that would subject them to greater scrutiny.

More from Sourcing Journal

If TikTok is “the needle,” said Chapin Fay, the Shut Down Shein’s executive director, referencing the preponderance of haul videos on the social-media site, then Shein “is the drug.” The Singapore-headquartered company, he told Sourcing Journal, isn’t just pouring advertising dollars into the platform but it’s also “recruiting” influencers.

“That’s how Shein has done an incredible job of infiltrating the U.S. economy through TikTok,” he said.

And if TikTok, by virtue of its parent company’s links to China, has raised national security concerns, then Shein should be viewed with the same gimlet eye, Fay said. He pointed to Foreign Affairs Committee chairman Tom Tugendhat’s charge that the Chinese Communist Party is behind the Nanjing-founded firm’s so-called “surveillance capitalism,” adding that “there is 100 percent a relationship between these two companies.”

Shein said that it “categorically” denies the group’s claims, which it dubbed “false and baseless.”

“Shein proudly provides customers with on-demand and affordable fashion, beauty and lifestyle products, lawfully and with full respect for the communities where we operate,” a spokesperson told Sourcing Journal.

Fay is the managing director of Actum, a consulting firm with offices in New York, California and Washington, D.C. “Coming from government,” he previously served as a counsel to the House Oversight and Government Reform Committee and as press secretary and director of public affairs for New York Governor George Pataki. Fay is also the founder and CEO of Lighthouse Public Affairs, where building coalitions is a specialty. One of his more recent efforts was rallying business and construction groups to push for infrastructure improvements in New York City.

Less is known about the dozen or so American brands, human rights organizations and individuals that make up the coalition. While their identities remain masked for now—the brands, Fay said, are known but “not gigantic”—this may change.

“We hope to make the members public at the appropriate time,” he said. “We are not there yet.”

It’s the members themselves that are funding Shut Down Shein’s activities. Fay said it’s working with a “six-figure sum” at the moment, though this could increase.

What triggered the formation of the group was a combination of different things, he said. The enactment of the Uyghur Forced Labor Prevention Act, which imposes a “rebuttable presumption” that all goods originating in part or in whole from the Xinjiang Uyghur Autonomous Region are the result of forced labor and therefore barred from entering the United States, was “a big inflection point,” Fay said. There were smaller triggers, too: The Chinese spy balloon that sparked a furor earlier this year. The mounting suspicions about TikTok. It was no coincidence that Shut Down Shein’s launch dovetailed with TikTok CEO Shou Zi Chew’s testimony before Congress.

“We wanted to make sure that O.K., while you guys are talking about TikTok, this is what Shein is doing totally under the radar that no one knows about,” Fay said. “We wanted to make sure that these members of Congress and decision-makers in the executive branch were also paying attention to Shein’s various business practices.”

Fay said that Shut Down Shein’s purpose isn’t a prescriptive one—other than the fact that it wants to, well, shut down Shein. The coalition, he said, seeks to be educational. Already members of the group have met with “dozens” of member’s offices and committees on Capitol Hill, he said.

“We’re not really opposing or supporting any particular legislative fixes or agenda or anything like that,” Fay said. “We are just making sure that everyone has the information they need.”

Not that this is a hard and fast rule. If someone proposes legislation or regulatory reform that would, in Shut Down Shein’s eyes, make a difference, it may switch its tack. For now, however, “we’re just making sure that the issue is being talked about,” he said.

Fay dismissed any suggestion that attacks on Chinese companies like Shein, whose meteoric rise to a $65-$85 billion powerhouse took many industry incumbents by surprise, amount to Sinophobia. He said that Shein’s is the business model that others are following, which is why it needs to be stopped. There are no plans to expand to campaign to similar platforms like Temu, though it’s not “out of the realm of possibility,” he said.

The reception from both sides of the aisle has been “overwhelmingly positive,” Fay said, describing the halls of power as “almost in unanimous agreement” that there are problems that need to be fixed.

“And so the phase one of our campaign was raising awareness and meeting with these legislators,” he said. “And I think you’re gonna see the phase shift to ‘O.K., so what’s the solution here?’”

Fay doesn’t take credit—at least not all of it—for the recent flurry of letters from lawmakers questioning Shein about its practices. The coalition, he said, is just there to “shine a light.”

“This is all member-driven,” he said. “This is all government-driven. The letters aren’t from us.”

Fay said that the group wants to shut down Shein’s IPO and its access to children, teenagers and “any U.S. consumer who doesn’t know what Shein is doing.” Shut Down Shein has no problem with healthy competition, he said, and if the most-downloaded shopping app chooses to “come out of the darkness, start paying tariffs and start acting like other good corporate citizens in America,” then “we’d be having a very different conversation right now.”

“While we are calling for the shutdown of Shein because of the way they’re currently operating, the ultimate goal is to bring them into the regulatory scheme and level the playing field,” he said. “If they want to do business in America, they need to follow the same rules that everyone else is following.”

Click here to read the full article.