RI 2026 H2 Preliminary Examination - Paper 1 (Final)

9570/01/Prelims/Y6/26 © RI 2026 [Turn over RAFFLES INSTITUTION 2026 YEAR 6 TERM 3 PRELIMINARY EXAMINATION Higher 2 ECONOMICS 9570/01 Paper 1 Case Study Questions 1 September 2026 2 hours 30 minutes Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your name, index number and civics class on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for diagrams, graphs or rough working. Do not use paper clips, highlighters, glue or correction fluid. Answer all questions. The number of marks is given in brackets [ ] at the end of each question or part question. Start each Case Study on a fresh sheet of paper. At the end of the examination, fasten your answers to Case Study 1 and Case Study 2 separately. Detach this cover page and secure it in front of answers to Case Study 1. Question Marks Name: __________________________ Civics Class: _____________________ _____________________ 1 /30 Economics Tutor: ________________ 2 /30 This document consists of 9 printed pages and 1 blank page. H

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3 9570/01/Prelims/Y6/26 © RI 2026 [Turn over Question 1 The Rise and Growth of Shein in the Fast Fashion Market Figure 1: Growth of clothing sales and decline in clothing use, 2000-2015 Note: Indexing reflects 2000 values, sales and GDP start at 100; utilisation begins at 200. Note: Clothing utilization refers to the intensity and duration clothing is actively worn. Extract 1: Shein’s Growth and Consumer Appeal Founded in 2008 by Chinese entrepreneur Sky Xu and now headquartered in Singapore, Shein has grown into one of the world’s largest online fashion retailers. Shein’s expansion accelerated during the pandemic, and by 2022 the firm generated around US$23 bill ion in global online revenue, capturing nearly one -fifth of the global fast -fashion market and overtaking long-established competitors such as Zara and H&M. Shein’s appeal is especially strong among younger consumers seeking constant style updates. One in four Gen Z shoppers buy from the platform, and 44% report making purchases at least once a month. Prices on many items have fallen over time as Shein scaled up production and intensified price competition, with some T-shirts now selling for as little as US$5 and sweaters for around US$10. In many markets, consumers view Shein’s clothing as comparable in style to items from Zara or H&M but significantly more affordable. Shein’s online platform is designed to capture attention and influence purchasing behaviour. Features such as unlocking free shipping, loyalty point systems, and minimum -purchase coupons are used to encourage additional spending, leading users to accumulat e items in their carts or work towards rewards. Daily login rewards, mini -games, and point systems also increase engagement, contributing to more frequent purchases. Source: Various sources Extract 2: Shein’s Production Model and Cost Advantages The global fast-fashion sector is highly competitive, with brands constantly racing to capture consumer attention in a marketplace shaped by rapid style turnover. Rather than responding directly to the pricing or output decisions of specific rivals, many f irms focus on identifying emerging consumer trends and launching new designs quickly to attract buyers. The digital revenue Source: Ellen MacArthur Foundation, 2021

4 9570/01/Prelims/Y6/26 © RI 2026 [Turn over nature of the fashion marketplace also makes entry relatively easy for new sellers. Anyone with a TikTok account and a Shopify store can technically start a “fast fashion” brand almost overnight, allowing numerous small brands to compete for consumer attention online. Shein distinguishes itself through its ultra -fast and flexible production system. Traditional fashion retailers often forecast trends 3 –12 months in advance and place large production orders. By contrast, Shein works with a network of primarily China -based suppliers willing to produce small initial batches and scale output quickly once an item proves popular. Production can take as little as 5 –7 days, and delivery to overseas consumers is often completed within two weeks. This data-driven model allows Shein to introduce roughly 1.5 million new products annually, keeping shoppers engaged and encouraging repeat buying. By operating without physical stores, Shein minimises inventory risk and overhead costs associated with maintaining retail outlets, allowing the company to respond quickly to emerging consumer trends and refresh its offerings more frequently than traditional retailers. The firm also relies heavily on data -driven tools to manage production. More than 5,000 suppliers use AI systems to analyse customer preferences and predict emerging trends, enabling output to closely track real -time purchasing patterns. Machine -learning technologies optimise production and inventory management, while tools such as Smartex.AI detect fabric defects and minimise material waste. Originally founded in the eastern Chinese city of Nanjing, Shein has relied on a sprawling network of manufacturers in Guangdong to produce ultra -low-cost clothing for global markets. The concentration of specialised manufacturers, textile producers and logistics firms within major Chinese production hubs generates shared cost advantages for firms located in these hubs. As the ecosystem expands, suppliers accumulate experience, invest in automation and benefit from kn owledge spillovers, which raise productivity across the industry and enable firms within the cluster to respond more quickly to changes in market demand. Source: Various sources Extract 3: Shein’s alleged misleading practices Despite its rapid growth, Shein’s online strategies have come under EU scrutiny. Consumer watchdogs from 21 European countries filed a formal complaint with the European Commission, arguing that these practices are deliberate design choices rather than accidental features. Alleged strategies include fake countdown timers, repeated pop-ups on limited-time offers, low -stock alerts such as “only 3 left!”, displaying “original” versus discounted prices in ways that exaggerate perceived savings, and misleading p roduct labels. The Chinese fast fashion giant is being investigated in Italy over its sustainability claims. Images promoting Shein’s clothing as sustainable are also done “through generic, vague, confused and/or misleading environmental assertions,” the authority said i n its statement. In particular, the watchdog cited information from Shien’s 'evoluShein' collection, which it said may have misled consumers into thinking the clothes they bought from the collection could be recycled. Source: Various Sources

5 9570/01/Prelims/Y6/26 © RI 2026 [Turn over Extract 4: Rising emissions concerns Shein’s rapid growth and “superfast fashion” model have drawn scrutiny for its environmental impact. In 2024, the company generated approximately 26.2 million metric tonnes of CO₂. Critics argue that its ultra -low prices and mass production contribute to an oversupply of cheap synthetic clothing and rising pollution. A significant share of emissions arises from its global supply chain, reflecting its reliance on thousands of suppliers across multiple countries. While its on -demand production model reduces unsold inventory, the large number of new designs produced daily increases overall emissions. Logistics also contributes substantially, as Shein ships individual parcels directly to consumers worldwide, often relying on air freight, which is more carbon -intensive than bulk shipping. Source: Various sources Extract 5: Regulating Fast Fashion Regulators in Italy and France have taken formal ac