As Shein’s controversies grow, its Gen Z consumer base shrinks: report

Last month, influencer Destene Sudduth posted a video on Instagram and TikTok showing the inside of a Shein factory. The video features footage she filmed while touring a factory located in Guangzhou, China, along with other American influencers.

“I expected this facility to be so filled with people just slaving away, but I was actually pleasantly surprised that a lot of these things were robotic, and honestly, everybody was just working like normal, like, chill, sitting down. They weren’t even sweating,” she said in the video.

It was one of several filmed on an all-expenses-paid trip that set off an online firestorm. There was no shortage of criticism of the influencers’ positive portrayal of Shein; the company has faced questions around its labor practices for some time.

The trip marked the latest public-relations challenge for Shein, which is reportedly considering a US IPO, per Bloomberg. According to a report from Morning Consult, the brand is losing favor among the same Gen Z consumers that helped it go viral thanks to TikTok.

• In June, the brand’s net favorability among Gen Z consumers fell nearly 20 points year over year.
• Net purchasing consideration for Shein among Gen Z also fell 10 points, with interest in making a purchase from the brand dropping from 49% to 42% year over year.

“Brands that rely heavily on social media marketing will always be subject to the whims of the internet…Brands can recover from one-off viral incidents, but persistent negative buzz presents longer-term challenges,” the report said.

Damage control

Certain issues can affect public perception of a brand more than others. According to Morning Consult, in terms of international issues, US adults are “most willing to boycott a brand” over forced labor. About one-third of consumers refuse to buy from brands “accused of ethical violations.”

Younger consumers may have moved on to the newly popular shopping platform Temu, the report noted. In May, Temu beat Shein in US sales by 20%, per a Bloomberg analysis.

Shein may find growth by courting a different set of consumers—millennials—who, according to the report, shop at a similar frequency for apparel compared to Gen Z and saw favorability toward the brand rise year over year.

Overall, “brands should view the latest Shein incident as a cautionary tale,” the report said. Some observers have described the content filmed at the factory as propaganda. One influencer has since deleted her post about the trip and apologized, saying she cut ties with the company. Meanwhile, a parody of the influencers’ videos has gotten hundreds of thousands of views and over 100k likes on TikTok.

“Public relations crises are no longer one-off events led by traditional media organizations. They can unfold at any time across every corner of the internet, thanks in large part to savvy Gen Z consumers armed with good editing skills and a sharp sense of humor,” the report said.