The EU supply chain law is coming. The Member States agree on this, despite the new German abstention. The project aims to strengthen human rights around the world. European companies will then need to be able to demonstrate exactly where their products are manufactured. Kik boss Patrick Zahn spoke about the new law on the ZDF talk show “Markus Lanz” and also revealed why the textile discounter Kik and other suppliers such as Euro-Shop can produce at such a low price.
From the beginning, the Kik boss stated that he supported the supply chain law. In principle, the discounter knows exactly where its products come from. Kik produces in Bangladesh and most of the materials come from China. Xingjang province, where the oppressed Uyghur minority lives in forced labor camps, is guaranteed to be exempt. At the same time, Zahn highlights that the approved delivery law hides bureaucracy instead of solving problems.
When asked to what extent Kik produces sustainably, Zahn responds that the entire industry is looking for new ways to produce more sustainably. This also includes the production of shirts and pants from fabric scraps or recyclable materials.
Kik sells cheap fashion: how does it work?
The textile discount store imports everything by ship, unlike large chains that bring their merchandise to branches by plane. “Otherwise, they won't make it from the Paris catwalk to the counter in six or eight weeks,” says Zahn. Kik also works with many basics. Neutral colors, neutral cuts, simple fashion, which help keep sales under ten percent. Products are discounted until someone buys them.
Nothing is thrown away, burned or destroyed. Completely different from the big brands, which have significantly higher discounts.
And Kik usually orders its products nine months in advance. This helps with planning, reduces costs and is an essential part of Kik's strategy, why the textile discount store is able to sell so cheaply. But you also save whenever possible.
Rent
The branches are not located in central locations, but on side streets. The result? Kik saves on rent.
Advertising
“We are very restrictive when it comes to marketing,” says Zahn. In fact, Kik barely spends any money on advertising. The textile discount store does not print brochures or have social media channels.
How does Kik check production locations?
Zahn also revealed how Kik audits its production facilities. Kik would visit sewing factories unannounced and set off the fire alarm. This mainly occurs on the roof, as the goods are stored there. Therefore, a possible fire would spread quickly. Just to see how the employees react.
“The water pipes are then checked to see if there is enough pressure on them.” Employees at the construction site would also be randomly surveyed; Kik would then want to know “what the working conditions are like or if they have received their salary.” “Direct superiors were not included in the surveys.
400,000 packages a day from China, with problematic merchandise
“We are talking about the supply chain law, but there is a big mess right under our noses,” the Kik boss continued. More than 400,000 packages from China are imported into Germany every day. Partially tax-free because the content is below the 150 euro limit. About 70 percent of these items are contaminated with harmful substances. Working conditions at production facilities are also not entirely clear. This is due to outdated regulations that, for example, still classify China as a third world country.