Banning fast fashion, then what?
Light on details and high on buzz might not be the best regulatory approach.
Over the past few weeks, we have been asked numerous times for our take on the recent, yet high profile aim of the French parliament to ban ‘fast fashion’.
Before we start, let’s be clear: yes, ultra-fast – or instant – fashion should be tackled for all its negative impacts, including disrespect of human rights, spiralling environmental degradation and the promotion of a disposable fashion while fostering addictions to shopping.
What to think about the French regulation to stop ultra-fast fashion?
While we can rejoice that this topic is being looked into by regulators and was voted unanimously - although only 146 out of 577 MPs were present - during the vote at the French National Assembly, we also wonder about the motivations behind the regulation, just three weeks after the violent mobilisation of farmers that shook the government. Blaming unanimously what comes from far away, especially from China, could look like a great opportunity to regain popularity points in polls, without taking any political risks. Surfing on the wave that allowed the parody of ultra-fast fashion by an MP to reach millions of views on TikTok could look like a great opportunity to launch an effective and cost-efficient communications campaign. Finally, supporting some of the most radical activists could be a great way to gather support from highly vocal opponents.
You might think we are being overly sceptical and cynical, but we feel it is always important to look at the context and motivations behind decisions, especially in politics.
All these conversations are happening while Shein is exploring a record IPO in London – after moving away from a less friendly listing environment in the US – and has just published record profits of USD 2bn for 2023. In addition, the company just announced it would open its supply chain model for other brands to use, raising fears that this is only the beginning of the disposable fashion tsunami.
What is the future of this proposed legislation?
After the National Assembly, it needs to be adopted by the French Senate where its content might very well evolve. The government is exploring the use of an expedited procedure to shorten the legislative process, which will require many unresolved issues to be settled during the debate in the Senate and in committee discussions. These include defining ultra-fast fashion, determining thresholds (such as how many models, pieces, colors are put on the market), environmental labeling, and effectively combating online advertising by ultra-fast fashion actors.
A significant unknown for us regarding this law is whether it will be compatible with existing European regulations. Many experts we spoke to raised doubts on this point. Others on the contrary congratulate France for its pioneering role and for pushing Europe forward. Â
What are we really talking about?
It is important to ask, something which the current draft avoids, how to define fast fashion and, to better prevent its excesses, what constitutes its unique appeal.
Could it be the price? If we compare Shein to its competitors on products such as t-shirts and jeans, it is not obvious. According to our empirical result from a March 2024 price comparison, we found cheaper alternatives in retailers that have been around for a long time.
Could it be the variety of products and frequency of new product introduction? On this point, there is no comparison. Shein is far, far ahead of the competition. Not only is the choice far greater at any given time, but they also introduced 1.3million styles this year, compared to 35,000 for Zara, according to recent studies.Â
Could it be the ease of access and the delivery time? There again the answer is not obvious. On Shein customers wait 7 to 14 days to receive their orders – a lot more than the competition where they can either walk into a store or get next day deliveries.
Could it be an approach to social and gamified commerce that drives additions? The ability of those platforms to use social commerce and social media engagement, combined with a model that, rather than copying and democratising designer looks, focuses on following – or initiating – micro-trends identified online drives higher levels of shopping addictions than more traditional models.
To summarise, what characterises ultra-fast fashion is more the addictive shopping behaviours that it stimulates, and the multiplications of styles, rather than the price of delivery speed.Â
Despite its uncertain future, we can wonder how effective the proposed legislation could be.
Who is it aiming at?
What is the goal of this law? To tackle overproduction and overconsumption of apparel and footwear, or to attack the Chinese competitors of our local retailers? Answers to this question vary based on who the question is asked to. Some of the most radical activists, who themselves own fashion labels, talk about overproduction and benefit from free publicity during every public intervention while condemning their competitors. It is hard to be both judge and defendant. Politicians, probably aware of the potential economic and employment impact of a broad reaching regulation, focus their narrative on Shein.
In this new world, is it still forbidden to forbid?
Banning all advertising from ultra-fast fashion to prevent the addictive behaviours it generates, especially with young audiences, is fantastic on paper. In practice, we can wonder if advertisement is the only driver of addiction, when we are in front of a globalised information flow and of public campaigns that blend commercial and entertaining content on social network and other online content platforms. Managing this ban could become a really complex task. Although we cannot let perfection get in the way of progress, enforcing this law to millions of online viewers would require the collaboration of leading platforms like Instagram, TikTok or Telegram. If France remains isolated on those positions, achieving this could be a tall order. Maybe an alternative would be to prevent targeting specific demographics, as we already do with alcohol. For example, in the US Juul, the e-cigarette brand, settled a major litigation case that it was aiming its marketing to adolescent. Could we envision similar restrictions regarding the prevention of addictive behaviours by adolescents when it comes to fashion to protect both their mental and financial health?
We also have to consider the other side of the coin. When it comes to such regulations, some organisations adopt quite a cynical approach, balancing the pros and cons, evaluating potential fines against potential revenues.
How much is enough?
Could a tax of up to 10€ or capped at 50% of the retail price of a product curb overconsumption of disposable fashion? To answer there are a couple elements to consider.
What framework will govern the enforcement of the law? The current draft is very light on details and leaves key definitions to future decrees that will exactly define fast fashion and the details of the tax. Despite these we can wonder how effective such a tax could be. Price does not seem to be the main driver of addiction. The average global order on Shein is around $75 and retailers can always play with discounts to remain competitive even if it harms margins. In addition, how would this tax be justified in a way that is aligned with global trade conventions, as it can be seen as unfair, targeting only subsets of markets.
Benefiting from the media buzz while leaving important aspects out of the conversation, including the exact companies targeted and preventing a proper appraisal of the economic impact of the regulations seems to be more demagogy than democratic debate aimed at effective legislations.
Wouldn’t it make more sense to enforce the regulations we already have?
France is a leader when it comes to publishing new laws. But isn’t always the best at enforcing those. The Directorate General for Consumer Affairs, Competition and Fraud Prevention – the state agency responsible for defining and ensuring compliance with competition rules – is already overwhelmed with requests and sees its budget erode year on year. In practice, regulations like these are increasingly hard to enforce, in France and more broadly in Europe.
For example, the legal guarantee of compliance. This European regulation requires all manufacturers of goods – automotive, electronics, durable goods – to provide a two-year warranty on all products. Should a fault appear on the product, the seller must fix it, by offering a free repair, exchange or a refund.
This regulation applies to apparel, recently indicated to us the economist Philippe Moati, co-founder of l’ObSoCo who is conducting out research for The French Agency for Ecological Transition on fast-fashion and second-hand. Lawyers and consultants confirmed it, apparel and footwear are listed are semi-goods and should remain compliant for two years. In practice, this means that if their zip breaks, button unravels or other, people can bring back their products to get it repaired, exchanged, or refunded.
This regulation goes even further. It implies that the compliance of a product should be appraised in comparison to equivalent products on the market. This means that jeans from H&M should have the same durability as ones from Berksha, or that a t-shirt from Shein should have the same durability as one from Primark. In all cases their core features should last two years. We picked names at random, for illustration.
We interviewed 10 brands on the topic, most had never heard of it, one mentioned being aware but confidentially hinted at not taking it into account, and one, which could actually be compliant due to the durability of its products, is complying but does not communicate about it to its clients.
This existing regulation could be the perfect legal tool to demonstrate the insufficient quality of ultra-fast fashion products, should it be enforced. The first step would be to ensure most people within the industry and across the population, know about it.
Isn’t there a more effective way to tackle ultra-fast fashion?
Ensuring all products entering the shared market are subject to the same taxes, comply with existing regulations and can be controlled would be a very effective way to tackle ultra-fast fashion. However the budgetary implications and legislative process in Brussels might not allow for those conversations to happen fast enough.
Today, parcels with a value below 150 euros – which applies to most if not all coming from Temu or Shein – are below the de minimis, meaning that they are not subject to duty taxes nor the same controls as standard imports, fostering their uncontrollable inflow. As it stands, we wonder about our ability to effectively tackle challenge.
Those are not the political times to support industrial transitions. To accelerate the large-scale transformation of industries, a balance of incentives to boost action, combined with strict regulation to move even the last movers is necessary, but those need to account for the complexity of the industries they address and productively work with committed stakeholders.
In our second opus on policy, we will discuss other policy approaches to revitalise the industry while accelerating its transformation.
Resources:
https://www.mobiloud.com/blog/shein-statistics
https://www.nytimes.com/2023/04/12/health/juul-vaping-settlement-new-york-california.html
https://www.drapersonline.com/news/shein-profits-double-as-it-awaits-ipo-approval#:~:text=Shein%20hit%20a%20record%20of,)%2C%20reported%20the%20Financial%20Times.
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