Fashion and Fast Fashion

How the fashion industry works, the rise of fast fashion that makes clothing cheap and quick, and its environmental and labour costs.

Fashion is one of the world’s largest creative industries, spanning luxury brands, mass-market retailers, designers and manufacturers.

The fashion system

Luxury brands, such as those owned by LVMH, earn high margins from brand value, craftsmanship and exclusivity.
Mass-market retailers sell affordable clothing in large volumes.
Manufacturing is concentrated in lower-wage countries, including China, Bangladesh, Vietnam, India and others.

Fast fashion

Fast fashion refers to retailers that rapidly turn catwalk trends into cheap clothing, releasing new styles frequently. Pioneers include Zara, part of Spain’s Inditex, which became famous for moving designs from concept to store in a few weeks. More recently, online retailers like Shein release thousands of new items daily, using data to spot trends.

Why it grew

Global supply chains and low production costs.
Speed and data, allowing retailers to respond quickly to demand.
Consumer demand for new, affordable styles.

Clothing prices fell in real terms in many rich countries, and people bought far more clothes than in previous decades.

The costs

Environmental: textile production uses large amounts of water, energy and chemicals. The United Nations Environment Programme and others have estimated that the fashion industry accounts for a notable share of global carbon emissions. Much clothing is worn briefly and thrown away, creating large amounts of textile waste.
Labour: garment workers in producing countries often earn low wages and face unsafe conditions, as the 2013 Rana Plaza collapse in Bangladesh showed.

Responses

Circular fashion: repairing, reselling and recycling clothes. Second-hand clothing markets, including online resale, have grown.
Regulation: the European Union has moved toward requiring producers to take responsibility for textile waste and has adopted rules on sustainable product design. France proposed measures in 2024 to penalise ultra-fast fashion.
Transparency about supply chains.

The price of a cheap T-shirt

A T-shirt costs very little in a fast fashion store. Its price does not include the water used to grow cotton, the pollution from dyeing, or the waste when it is thrown away after a few wears. Economists see these as externalities that make fast fashion cheaper than its true social cost.

Thinking cheap clothes are only good for consumers

Cheap clothing benefits shoppers, but environmental damage and poor working conditions impose costs on others. Prices that ignore these costs encourage overconsumption.

Key takeaways

Fashion spans luxury brands, mass retailers and global manufacturing.
Fast fashion turns trends into cheap clothing quickly, pioneered by Zara and expanded by Shein.
It carries large environmental and labour costs.
Circular fashion, regulation and transparency aim to reduce harm.