While recently discussing the subject of rampant fashion consumption, an industry expert and friend mused: “Think about it; Shein generated £1.1 billion [$1.5 billion] in U.K. sales in 16 months–how many garments is that?” Well, at say £8 ($10) a piece, that would be around 140 million items. For context, Shein is the world’s largest online-only fashion retailer, with over 88 million users of its shopping app, and 20% of those are in the U.S.
Between 2021 and 2023, Shein’s U.S.-bound bulk apparel shipments increased by more than 2,000%, from around 141,000 kg to more than 2.8 million kg. And Shein’s sales are just one example of how we’re buying (and throwing away) more clothing and textile products (and at a faster rate) than ever before, with no solutions at scale for collecting, sorting, or recycling these discarded items. As a consequence, this waste is a growing economic and environmental problem for governments in countries that are major fashion importers.
Cross-border fast fashion e-commerce company SHEIN at a garment factory in Guangzhou, Guangdong … [+]
While countries like the U.K. and U.S. have a limited textile collection and recycling infrastructure, others are primed to establish circular textile economies where waste can be valorized at the point of clothing production and consumption, and where “rudimentary” mechanical textile recycling is already well established. One such country is India.
India is home to 1.4 billion people–the most populated country globally (surpassing China in 2023). Its rapidly growing middle class with increased spending power means its local apparel market is expected to reach $105 billion in 2024. By 2027, it is projected that 38.8 billion pieces of clothing will be purchased annually in India, of which 99% are expected to be “non-luxury” goods. As it happens, a chunk of this growing market may now be won by Shein, whose app was banned in India from 2020 to 2023, before a new production and licensing deal was agreed between Shein and India-based retailer Reliance. The agreement reportedly stipulates that Shein garments sold in India will be manufactured in India and retailed by Reliance, with Shein receiving a percentage of profits. Furthermore, Reliance will help Shein establish a supply chain in India (its first outside of China) for global exports, boosting the local and export sector economies in India. So, what’s the upshot, and what does this deal have to do with building a circular textile economy?
The Shein/Reliance partnership demonstrates a crucial differentiation between the world’s largest garment-producing and garment-consuming countries. India will soon meet both criteria, whereas the U.K. and U.S. are major fashion consumers but not significant producers (instead outsourcing fashion production to India, China, Bangladesh, and other developing countries). These developing countries, which have rapidly growing local demand for consumer goods, could establish high-value circular textile economies to serve both production and consumption within their borders, and for export markets.
Managing and valorizing textile waste is a business opportunity for fashion’s manufacturing countries; by contrast it is currently a financial and regulatory burden for non-manufacturing ones. In India, mechanical recycling (shredding and re-spinning) of cotton-rich factory offcuts is already well established, and building out more advanced chemical recycling to produce higher quality fibers is a logical ‘upgrade’ and growth opportunity for this existing supply chain. In contrast, supply chains for rudimentary textile collection, sorting and recycling are yet to be established in ‘developed’ garment-consuming nations. One reason for this is the absence of a business case, since there is no significant local textile and garment production.
TOPSHOT – Traders push a trolley of bales of secondhand clothes at the Kantamanto market in Accra, … [+]
Instead of textile recycling, “wealthy” countries have conducted waste colonialism (exporting discarded clothing from “rich” to “poor” countries). However, new regulations and legislation, including the proposed E.U. waste shipment restrictions and extended producer responsibility (ESPR), aim to shut this practice down.
Non-manufacturing countries with poor infrastructure for collecting, sorting, and recycling textiles will face stiff challenges in neutralizing the cost of mounting clothing and textile waste, never mind developing a valuable economy from it. Even with plentiful discarded clothing in Europe, one of the largest advanced cotton textile recycling companies, Renewcell, sources its (homogenous, reliable, post-industrial) textile waste from factories in Bangladesh and Turkey, processes it in Sweden, then ships the recycled fibers back to Asia for yarn spinning and textile manufacturing.
Soon, renewable energy will be abundant and inexpensive in India, based on its hurtling speed of solar energy expansion and biomass use, in place of fossil fuels. The dominance of fossil-energy in Asia has been one of the barriers to advanced recyclers setting up their technologies there, in the heart of the textiles supply chain. But with India’s renewables expansion, companies like Renewcell and Circ could not only streamline their sourcing and recycling and distribution within the existing supply chain—no shipping required—but further reduce their carbon footprint compared to operating between the U.S. and Asia, or Sweden and Asia.
Fashion innovation and investment organization Fashion for Good and Forest Safeguarding NGO Canopy recently evaluated the circular textile opportunity in India. Following their Sorting for Circularity study, they estimate that India accounts for 8% of global clothing and textile waste, around 7.7 million tonnes per year, of which 61% is cotton or cotton-rich (containing cotton and synthetic fibers). The study evaluated collection, sorting, and redistribution channels in the local textile supply chain and revealed that half of India’s textile waste is post-industrial (factory offcuts of homogenized type) and half is post-consumer (discarded household textiles and clothes of mixed fiber types). The pilot project was the first step in assessing the feasibility of a high-value circular textiles economy beyond its existing mechanical (fiber downgrading) recycling capabilities.
Fashion for Good conducted a similar pilot study to evaluate European textile waste. It only assessed post-consumer textiles (the main textile waste stream in Europe) and concluded that 74% was low-value (unsuitable for reuse or resale on second-hand markets) and available for fiber-to-fiber recycling in six European countries. The data outlines an opportunity to connect this waste in a supply chain with recyclers, and that there is an absence of infrastructure needed to capitalize on this. There is promising work being done by a number of organizations to overcome this, including Accelerating Circularity, but the road to scaled infrastructure remains long and likely potholed for countries consuming but not producing textiles and clothing.
Following the India pilot study, a business case still needs to be made for investment in more advanced circular textiles infrastructure in India. Nevertheless, major manufacturing countries are best positioned to close the loop on clothing and textiles from both the post-industrial and post-consumer standpoints. It is also clear that the oft-mooted idea that circular fashion will take off via post-consumer “take-back schemes” or clothing collection bins is a fallacy. Furthermore, countries not producing textile goods and instead relying on imported products need to better understand the volume and type of textiles entering their borders. Why? Because without that data it’s impossible to understand the sorting, collection and recycling technologies that would best manage those textiles when discarded. For example, the upcoming E.U. Ecodesign requirements and Digital Product Passport aim to collect and attribute such information to every textile product sold in the bloc, to overcome these data gaps.
To return to Shein’s U.K. $1.5 billion revenue and “back of envelope” calculation of 140 million garments, the need for product-level textile and garment data to assess impacts and recyclability is vital; yet this data is not known. Why? Because most of Shein’s goods are shipped directly to U.K. customers from China, rather than being sent in bulk shipments, stored in warehouses and then packaged and distributed locally (as almost all other brands and retailers do). This direct shipping avoids declaration of data that would be useful in evaluating U.K textile waste types and volumes, and therefore circularity solutions.
Being a low-price retailer, it seems reasonable to assume that many of Shein’s packages to the U.K. are below the import De Minimis threshold of £135 ($170), meaning they do not attract any duty or tax (beyond VAT), but more crucially, do not require trade-related paperwork or data reporting. Shein’s website explains that it often ships items from a single customer order in multiple separate packages (depending on location and availability of stock), which may also contribute to packages not meeting the de minimus threshold.
Temu on App Store.
Similarly, in the U.S., the De Minimis threshold is $800 (raised from $200 in 2016, to stimulate trade and encourage eCommerce), allowing packages below this value to avoid declaring trade and product data. For those ranting about the massive piles of discarded fashion from the likes of Shein, the old adage “don’t hate the player, hate the game” comes to mind, especially since rival fashion commerce app Temu is now outpacing Shein in some markets.
Ultimately, the data “black hole” that customer-direct shipping has created for fashion importing countries means that not only are they poorly positioned because they outsourced textile and garment production, but they are ill-informed about the types and volumes of textiles flowing into their borders, and therefore the magnitude of the textile waste problem and best possible solutions. On the other hand, India, for example, will be manufacturing (not importing) Shein products sold on its local market, benefitting from all the data and intel that affords, including the garment life cycle, likely waste volumes, and optimal circular textile solutions.
Stand by for my upcoming deep dive into the circular textiles economy opportunity in India and the Alliance responsible for mapping and implementing it.
