Shein Buying Everlane Actually Makes Perfect Sense

Shein Buying Everlane Actually Makes Perfect Sense | WIRED

Skip to main contentCommentLoaderSave StorySave this storyCommentLoaderSave StorySave this storyOn Friday, the ultrafast-fashion giant Shein finalized its acquisition of Everlane, a US clothing retailer that made its name by promising “radical transparency” into how its clothes were made. Neither company disclosed the price of the deal, but Puck reported last weekend that it clocked in at $100 million.Founded in 2010, Everlane became synonymous with a certain strain of millennial consumerism that was supposed to be the exact opposite of Shein. It mainly sold elevated basics, and told a generation of anxious and high-minded shoppers that they could feel morally good about buying yet another pair of plain ballet flats or black high-waisted skinny jeans. Shein, by contrast, became notorious by flooding the internet with astonishingly cheap, trendy clothing produced at enormous scale. It has been criticized for years for alleged poor labor practices.Given how differently Shein and Everlane positioned themselves, many people online felt the acquisition fell somewhere between darkly ironic and outright dystopian. The fashion writer Derek Guy, better known online as the “menswear guy,” articulated the vibe in a post on X: “Under Shein,” he wrote, “Everlane’s ‘radical transparency’ means you get to read about the small child making your boring gray crewneck sweater.”Really, though, the deal makes perfect sense. In the long run, it may end up looking like a preview of where Chinese consumer companies are heading next.Chinese ecommerce giants conquered the global market largely by selling cheap stuff at eye-watering scale. Companies like Shein and Temu thrived in part because of the “de minimis” loophole, a US trade rule that allowed packages worth under $800 to enter the country tariff-free and with relatively little customs scrutiny. That system became the backbone of a new era of cross-border ecommerce, enabling Chinese companies to ship bargain-priced products directly to American consumers faster and more efficiently than many traditional retailers could manage.But after US president Donald Trump imposed sweeping new tariffs on Chinese imports and ended the de minimis exemption, the economics underpinning that model began to falter. Chinese companies quickly realized they could no longer compete just on price. If they wanted to keep growing internationally, they needed something more durable: a good old-fashioned brand.Shein buying Everlane, however culturally cursed it may appear, is part of a broader trend already unfolding across Chinese commerce and manufacturing. Increasingly, Chinese companies are trying to move beyond anonymous low-cost production and toward owning recognizable global brands associated with quality, lifestyle, and status.One of the clearest examples comes from Temu’s parent company, Pinduoduo. In March, the company announced a major new initiative called New PinMu, a multibillion-dollar effort designed to help Chinese manufacturers build premium international brands. The project is part of a larger strategic vision outlined by Pinduoduo co-CEO Jiazhen Zhao, who has been hyping up the company's ambitions to elevate manufacturing standards and create pathways for Chinese factories to move up the value chain.Meanwhile, Luckin Coffee, a Chinese coffee chain that has become one of Starbucks’ biggest rivals, recently acquired Blue Bottle, the cultish specialty coffee brand that helped define American third-wave coffee culture. Anta Sports, a Chinese sportswear giant that began largely as a domestic sneaker company, has spent years buying into premium global sportswear brands, including controlling stakes in Arc’teryx and Salomon.The trend also reflects broader political pressures inside China. The government has become increasingly critical of the brutal price wars and hypercompetition that dominate industries like ecommerce and electric cars, a phenomenon often referred to as “involution.” Beijing now wants companies to focus more on sustainable growth, higher-end manufacturing, and global competitiveness rather than an endless race to the bottom.In this new economic and political environment, Chinese companies are no longer content being the invisible factories behind Western brands. They want to own the brands themselves.And as for Everlane? It already lost much of its cultural relevance in recent years and was facing significant financial headwinds. Once valued at $250 million, the company has struggled to fend off competition from new online basics retailers such as Quince. The private equity firm that sold its controlling stake in Everlane to Shein was also likely eager to unload the $90 million in debt the company had accumulated.Despite its struggles, Everlane possesses something incredibly valuable: a recognizable American brand associated with tasteful minimalism and a veneer of ethical credibility. Building that kind of identity from scratch takes years, and it’s far more efficient for Shein to simply buy it.The weirdest thing about Shein acquiring Everlane is not that it happened. It’s that people are still surprised.This is an edition of Zeyi Yang and Louise Matsakis’ Made in China newsletter. Read previous newsletters here.CommentsBack to topTriangleYou Might Also LikeHow to find us: Add WIRED.com to your preferred sources in GoogleThese women are trying to optimize their vaginasBig Story: AI gig work is the new waiting tables—and it's soul-crushingThis summer, the American water crisis becomes realEvent: How to adapt, compete, and win in the next era of businessLouise Matsakis is a senior business editor at WIRED. She cowrites Made in China, a weekly newsletter that gives readers a clear-eyed, unbiased view of the biggest tech news coming out of China. She was previously deputy news editor at Semafor, a senior editor at Rest of World, and a ... 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