Are you familiar with the term fast fashion? In case you are not, the term refers to the “business model of replicating recent catwalk trends and high-fashion designs, mass producing them at a low cost, and bringing them to retail quickly while demand is at its highest.” In a quickly evolving world, where trends change in the blink of an eye, and previously chic options become “boring” and “obsolete”, fast fashion appeared as a beacon of hope for low and middle-income consumers, who could now dress fashionable in an affordable way. Fast fashion, though, does not create solely trendy apparel. It is a carefully constructed business model that capitalizes on economies of scale and leverages the huge demand created by consumers. This radical change in the fashion industry brought about changes in how we view the fashion industry.

Economies of scale: the pillar of fast fashion

Economies of scale is an economic term defined as decreases in average costs with bigger size. This effectively means that as fast-fashion firms grow, they can decrease their costs and thus obtain a cost advantage in the industry. This allows the fashion colossuses to charge very low prices without damaging their profitability. At the same time, the enormous production allows firms to adapt to market trends as they can easily swift production to match current demand and respond to consumer preferences, always giving them a lead in the industry. One example that capitalizes on economies of scale and is familiar to all of us is Zara. Specifically, it is a Spanish-based fast-fashion clothing brand that achieves a cost advantage by centralizing the design, manufacturing, and distribution processes. This way, as soon as Zara intercepts the changing demand signals in the industry, it can respond to them in real-time. Therefore, this efficient business model allows low-cost production and affordable trendy apparel for consumers.

The generous gifts of fast fashion: affordability, accessibility, and job stimulation

Fast fashion, due to lower average costs, has democratized access to fashionable clothing options, especially for low-income consumers who have a small disposable income. The efficient supply chain created presents fashion enthusiasts with the most chic options, giving them a diverse array of products to choose from. Their low prices allow them to follow fashion trends without burdening their bank account severely. This affordability has widened the demographic of fashionistas, allowing millions of people to express their personal style and enjoy the world of fashion. Accordingly, a report by McKinsey & Company showed that fashion brands such as Zara and H&M can offer very cheap alternatives to the products of traditional retailers, with some items being priced more than 50% less.

Another significant advantage of fast fashion and its exponential growth is job creation as firms often choose to outsource production to developing countries. Specifically, fast fashion is one of the backbones of growing economies, creating thousands of jobs for the unemployed, expanding the existing opportunities, and permitting the workforce to expand their skill set. Therefore, through the necessary training and guidance, the countries’ human capital increases and the economies grow without letting development fall behind. Specifically, according to the same report by McKinsey & Company, the industry employs over 75 million people worldwide, making it one of the biggest employers worldwide.

The curse of fast fashion: environmental and human exploitation

At the heart of fast fashion lies an insatiable appetite for natural resources. The industry overuses scarce resources such as oil and natural gas, leading to their depletion. At the same time, the excess CO2 produced by the burning of petroleum adds a severe burden to the environment and causes extreme weather phenomena that afflict the local populations and by extension the rest of the world. The crisis has deteriorated further through the creation of a toxic chemical cocktail during the manufacturing process. These dangerous substances are then discarded into the ocean or lakes, or simply spread in the air, polluting ecosystems, and posing health problems to local communities. Interestingly, “famous polluters” of this world are considered to be air and sea transport, and yet surprisingly enough, fashion is responsible for double the amount of CO₂ emissions.

At the same time, the phrase “reality is not always what it seems” and the fast fashion industry come in handy: behind the glossy facade lies a miserable reality of human exploitation and abuse. In the pursuit of ever-decreasing production costs, big brands decide to outsource their production and what could be a better option than the developing economies where people are willing to accept low-paying jobs in their desperate search for an income? Tragically, human rights are violated due to abysmally low salaries, long hours, and inexistent labor protection that characterize the industry. Even children are viewed as “additional production units”, denying them access to education and alienating them from an exploitation-free childhood.

Undoubtedly, fast fashion has democratized access to fashion by opening new trendy horizons in the fashion industry, even to consumers with low disposable incomes. However, in a lot of cases, the costs outweigh the benefits: environmental and human exploitation impose huge socioeconomic costs and hurt the well-being of local populations. Therefore, governments must prioritize ethics over money and impose rigid laws and regulations to tackle the problem and ameliorate the living conditions. It is important to highlight that action can be taken on an individual basis through the embrace of circular economy principles such as recycling and rental clothing to mitigate the industry’s environmental footprint.