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Why Is Shein Being Investigated?

Shien the biggest fast-fashion retailer is currently under investigation. Various artists have come together to file a lawsuit against the company.

Shien is currently being investigated for theft of intellectual property. However, the lawsuit may bring forth various other lawsuits that are pending against the fashion retailer.

This article will discuss why Shein is being investigated and the charges against Shein in detail.

What Is Shein?

Shein is a Chinese online fast fashion retailer that debuted in 2008 as ZZKO by Chris Xu.

Chris Xu is the owner and the founder of the company. Furthermore, many consumers compare Shien to drop shipping companies.

However, the company’s success is mostly due to the affordable apparel that is more lucrative to Generation Z.

Furthermore, until 2012, the company did not provide its services to other countries except China.

However, after 2012, the company started providing its products to various countries, such as Spain, Russia, Italy and Germany.

Shein the fast fashion retailer
Shein is a fast fashion retailer and the largest fashion company in the world.

As of May 2022, Shein is the largest fashion company in the world, and the company’s estimated value is $30 Billion.

Furthermore, due to its rapid success, various brand names, such as Zara, Gucci, etc., consider Shein one of the market’s biggest competitors.

Moreover, many consumers attribute the success of Shein to the increasing marketing strategies through Tiktok.

Why Is Shein Being Investigated?

Currently, there is an investigation going on against Shein.

The investigation is due to the 52-page lawsuit that claims that Shein is committing “Intellectual property theft from US designers large and small.” 

This investigation came to fruition after various artists and brands complained and filed lawsuits against the company.

The lawsuit against the company came to fruition after three independent designers: Krista Perry, Larissa Martinez and Jay Barron filed a complaint against the company.

Perry claims Shein copied her design
Designer Perry claims Shein copied her artwork and created one and sold it to its customers.

Furthermore, the plaintiffs also claim that Shein is generating “millions of dollars” while infringing upon the intellectual property of the independent designers.

The designers also claim that the infringement of their designs will only result in a loss for the designers rather than Shein.

Thus, the lawsuit is critical for independent designers and the plaintiffs brought forth various designs by the designers and Shein.

The comparison between the designs showed no distinction between the two.

The plaintiffs also claim that Shein uses a complex structure to make the investigation harder.

Furthermore, the structure works under decentralization and complex networks. Thus, obtaining information about the infringement can be a lot harder.

Previously, Shein also faced a lawsuit for the exploitation of labor in various production facilities.

Shein's corporate structure
Shein’s corporate structure shows the complexity of its production and delivery of products

The Bottom Line

Companies constantly come into an investigation for various reasons.

However, when a brand name such as Shein comes into an investigation for intellectual property theft, this does raise a few eyebrows.

Furthermore, the theft of intellectual property from such big brands ends up causing a lot of loss for independent artists.

Hopefully, this article can give you a brief overview of why Shein is currently under investigation.

Continue reading to explore whether you can still order from Shein after RICO and if the company is shutting down.
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