What you need to know: 

• Despite stating pro-climate sentiment, younger Australian consumers are driving a booming fast-fashion and homewares market, with online retailers like Temu and Shein surging in popularity - and sales.
• Roy Morgan data (June 2024) estimates Temu had 3.8 million Australian customers and $1.7 billion in annual sales, while Shein was sitting at 2 million customers and $1.1 billion. More recent data suggests Amazon still leads with $1.94 billion in sales and is ramping up competition with its budget-friendly Amazon Haul storefront.
• Recent polling by Forethought suggests Gen Z and Millennials are the biggest culprits, despite the cohort's tightly held views on climate action. Price is the biggest lever, but it's not the only one.
• Kit Willow, the founding designer behind Australian fashion houses Willow and KITX,  says major structural change is required to solve the fashion industry's supply chain issues, making sustainable product more commercial and widely accessible – and she's confident the demand is there. 

It's been coming for a while - sustainability has taken a back seat for business and for its most strident supporters - younger consumers. 

It’s an environment in which few brands, aside from those with B-Corp status or built-in sustainability, have been eager to colour their messaging green.

But corporates aren’t the only culprit. Consumers, for all their pro-climate sentiment, are failing to walk the talk. In Australia, online retailers slinging ultra-fast fashion (and homewares), imported at ultra-low prices direct from factories in China have seen raging success.

As of June 2024, little over one year after Temu began shipping to Australia, Roy Morgan estimates put the discount marketplace at 3.8 million Australian customers and $1.7 billion in annual sales. The data, based on a single source panel of 16,621 Australians over 14 years, put competitor Shein at a projected 2 million customers and $1.1 billion in sales. But the Chinese retail giants are not the only culprits.

US-owned Amazon, already comfortably ahead with $1.94bn in local online retails sales in 2024, is doubling down on its low-cost positioning, taking the newcomers head on in the US with its Amazon Haul storefront. Launched in November and yet to land in the Australian market, Amazon's new storefront offers fashion, home, lifestyle and electronic goods at prices of US$20 or less – and most items come in below US$10.

Together with the regular fast and low-cost retail incumbents – H&M, Uniqlo, Kmart, Zara and the like – the accessibility of these online marketplaces has ensured consumers can get there fashion fill through the depths of an economic slowdown.

The result? Australia last year surpassed the US as the world’s biggest consumer of textiles per capita, buying an average of 56 new clothing items each year, according to analysis from  think tank The Australia Institute. The US is a close second, with 53 items, while the UK (33 items) and China (30 items) trail well behind.

Worse, is the volumes that we’re shifting into landfill – two hundred thousand tonnes of clothing each year, per The Australia Institute. Another 105,000 tonnes gets exported, ending up clogging beaches in places like Ghana, Africa, where the locals in capital city Accra refer to them as "dead white man's clothes".)

That feeds a growing narrative that consumers don’t care about their impact – and for some, that might be true. But the true picture is far more complex.

Xhead: Gen Z, Millennials lead the charge

Younger consumers tend to cop the blame in the fast-fashion narrative. While their culpability is often over-egged – cue the chicken-egg debate of whether consumers or corporations’ bear ultimate responsibility on the sustainability front – the role Gen Z and Millennials play in driving demand is undeniable.

According to Roy Morgan’s data, those aged 14 to 34 accounted for a collective 47 per cent of Shein’s Australian customer base in the 12 months to June 2024, and 28 per cent for Temu.

A poll Mi3 commissioned from consumer research firm Forethought painted a similar picture. Though based on a much smaller sample, the results signalled that 18 to 34-year-olds were significantly more likely than other age cohorts to shop at fast-fashion and discount brands. More than three quarters (79 per cent) had made a purchase from Amazon in the last 12 months, while 37 per cent had bought from H&M, 35 per cent from Uniqlo, 30 per cent from Shien, and 15 per cent from Ali Express.

Consumption skewed much lighter amongst the older generations, particularly when it came to fast fashion. For most brands, the over 50 demo was the least likely to have made a purchase, with 34 per cent eschewing the brands mentioned entirely.   

Temu was a notable exception, particularly with the retailer’s volumes closing in on the Amazon juggernaut – busting the widely-held assumption that older consumers have clean hands in the matter.

Per Roy Morgan, Temu’s customers skew middle-aged and up – 48 per cent fall in the 35-to-64-year-old bracket, and a further 24 per cent are aged 65 and above.  

Climate vs. consumption

Young people might not be the only demo driving demand in the fast fashion and homewares ecosystem, but their overrepresentation in the category sticks out as at odds with their values. According to the Lowy Institute’s 2024 polling, 73 per cent of Australians aged 18-29 saw global warming as a serious and pressing issue, well ahead of the overall population (57 per cent), and over 60s (51 per cent) in particular.

The more recent Forethought polling broadly stacks – 65 per cent of 18 to 34-year-olds said they felt anxious about the impact of climate change, compared to 51 per cent of 35 to 39-year-olds and 46 per cent of those 50-plus.

Looking more closely at how climate-anxiety factored into consumption habits, the disconnect was clear. Per Forethought’s survey, only 40 per cent of 18 to 34-year-olds said they regularly considered the environmental impact of their purchases – putting them on par with the 50-plus cohort.

While consumption of fast fashion and homewares was lower among those more mindful of their impact, plenty straddled the cognitive dissonance. Almost half (47 per cent) of all 18 to 34s who shopped at Shein also claimed to be environmentally conscious, and the same for Amazon, while the correlation stood at 41 per cent for Temu’s younger customers.

Economic reality bites

The question is, what’s the disconnect? Many revert to the argument that consumers don’t care sufficiently about their environmental impact to pay the price for a more sustainable alternative.

The claim bares some truth, mostly being that researchers have long known that consumers will generally weight price over values. Forethought CEO Diane Shelton laid out the phenomenon to Mi3 last year.

“In terms of consumer psychology, there's a big gap between what people feel they would like to do, and then what they're prepared to do, in terms of paying more money for something,” she said. “We have years and years of research showing when it comes down to consumers actually putting their hand in their pocket, that behaviour drops off enormously.”

Set that on the background of a relentless cost-of-living crisis, where the cost barrier associated with more sustainable product becomes sharper. While it's true that younger consumers are less financially established than their older counterparts, the economic pain has been felt across the board. Per Forethought's polling, around 85 per cent of under 35s were experiencing cost-of-living pressures, as were 84 per cent of 35-to-49-year-olds. Those 50 and over were only slightly better off, with 70 per cent feeling the strain – though that contrasts with hard spending data compiled in recent years by Commbank and Quantium, which suggests older Australians did in fact, increase spending in 2024, just as they did a year earlier.

Negative influences

Costs are one of many factors contributing to an overarching sense of information overload that anecdotally seems to have shifted younger consumer's attention away from the sustainability conversation, potentially contributing to some wilful – or genuine – ignorance around the environmental impact of their purchases. Greenwashing and issues around supply chain transparency haven't made the decision-making process any easier.

Then there's the normalisation of excessive consumption online, with influencers pushing fast-moving trend cycles that spark further demand for cheap product that fits the bill. Analogously, Gen Z and millennials rate the platforms as their most influential media channel, per Deloitte's latest Media & Entertainment Consumer Insights report.

Synthetic principles

Kit Willow, the founding-designer behind Australian fashion houses Willow and KITX and a major proponent of sustainable fashion, says the trend reflects the commercial challenges of sustainable production. In her experience, consumers respond strongly to sustainable messaging, but structural supply chain issues mean its difficult for brands to make the shift without passing on the costs – putting sustainability at a price point that is inaccessible to most consumers.

“The systems that we've built do not support the fast transition we need to see,” Willow told Mi3. “I don't think you can tell consumers to stop spending, and I don't tell consumers to stop purchasing –they're going to purchase, right?”

She points to recent efforts by Shein to promote its efforts to embed some sustainable practices into its operations via the ‘EvoluShein Roadmap’ as responding to consumer demand.

“They are moving at the most rapid speed to work recycled textiles. They know that it is moving in this direction.”

More broadly, she said the industry-wide shift could be accelerated if governments were to put levies on the sale of synthetic fibres (i.e. polyester) that reflect their true ecological cost and subsidise natural fibres. That, per Willow, would make going green more commercially viable for a greater number of businesses – and it would mean more choice for consumers.