Shein — Growth at all costs
Table of contents
- The origins of Shein as an e-commerce phenomenon
- The rise of “fast fashion”
- The growth of international e-commerce
- The science and research behind Shein’s strategies
- Trends backed up by data science
- On-demand business model & unique supply chain management
- Aggressive social media marketing for the win
- Not everyone is a fan
- Low-quality products
- Ethical matters
- The lesson we can all learn from Shein
Shein has become the biggest online-only fashion brand on the planet. How did they accomplish this and what can we learn from them?
If you don’t know about Shein, we can make a pretty good guess about your age, gender and a few other things. That’s because this Chinese brand for affordable clothing has made amazing progress with certain demographics while still being largely unknown to others. In fact, the progress they’ve made has been so amazing Shein has become the biggest online-only fashion brand on the planet. Not everyone is impressed with some of the shortcuts they appear to have taken to achieve that status, but they still offer some lessons for companies in search of e-commerce success.
Gen Z loves the brand for its low-cost policy, Millennials are trying to figure out the appeal by frantically ordering five-dollar outfits, and the rest of us are confused about the correct pronunciation of the brand’s name. In the meantime, Shein has quietly bypassed Amazon as the top shopping mobile app in the United States.
If you take a look at the brand’s official website, you might come to the conclusion that the only reason for the hype is the pricing. It’s true that with Shein’s collections a user can purchase an entire outfit under $30, save on free international shipping, and enjoy the regular 14-day window for the refund. However, there’s more to this Chinese giant than meets the eye, even though it’s been trying very hard to stay on a low profile.
The origins of Shein as an e-commerce phenomenon
Founded in 2008 in Nanjing, China and previously known as SheInside, the brand mainly focused on wedding dresses. This niche specialization later allowed Shein to position itself as a brand for women’s clothes and expand from there. The founder, Chris Xu, had extensive experience in SEO and marketing, which, undoubtedly has translated into his business’s viral success. But more on that later.
Shein has always followed the latest social media trends, carefully positioned itself on the global market, and assembled quite a large team of designers dedicated to growing their collections. In fact, throughout the 2010s, Shein was already available in the fashion-oriented European countries like France and Italy, and set up delivery services to Russia. Today Shein is available in more than 150 countries around the world, targeting America, Australia, Europe, and the Middle East in particular.
You might be wondering the same thing that a lot of people think about when first hearing about Shein — if they’ve been so successful for more than ten years at this point, why is it only now that it breaking through into the mainstream? There are several factors, both external and caused directly by Shein’s aggressive marketing strategy, and we are going to look into each of them in more detail.
The rise of “fast fashion”
Shein’s place in the market is clear: it is affordable, fashionable, and very cheap. So, naturally, one of the first associations it can evoke is the phenomenon of fast fashion. In fact, today it is safe to say that Shein has redefined fast fashion as we know it.
Fast fashion is a term used to describe clothes that were designed according to the trending runway collections but of a lower quality, faster production, and much more middle-class-friendly pricing.
Brands traditionally associated with fast fashion include Primark or TopShop. They leveraged their low-cost approach to develop a disposable fashion segment and make huge waves in the marketplace.
But now Shein is taking things further. Without a single physical store but with loads of warehouses, manufacturers, and suppliers all around the world this Chinese brand is redefining fast fashion because it cuts out the intermediary. Instead of waiting for the new collection to hit the shelves in your nearest mall, you can buy it instantly and enjoy the fast free delivery to your door.
Shein is just as much about fast as it about fashion.
The growth of international e-commerce
Speed is everything in e-commerce. This is particularly true for brands interested in shipping internationally. According to Shopify, technical infrastructure and the speed of delivery are among the most common issues for international e-commerce companies. This means that as long as the brand is capable of addressing those challenges, it is capable of pretty much anything.
That’s exactly what Shein did: they bet on supply chains instead of investing in physical stores and jumped on the e-commerce train before it got oversaturated with more traditional fast fashion retailers.
This also answers the most important question around Shein’s success: why now? International (and regional) e-commerce has seen an unprecedented boost because of the COVID-19 pandemic outbreak. That’s exactly when Shein popped up as Gen-Z’s fashion company of choice and it is unlikely that it will go away any time soon.
The science and research behind Shein’s strategies
However, it is important to mention that Shein’s success isn’t just a product of the boost to e-commerce caused by the pandemic. Instead, it is a very good example of a clothing brand that puts marketing, data and analytics at the center of all its efforts. And that is something every e-commerce business could learn from.
Trends backed up by data science
Instead of investing in the number of items, Shein chose to test different models in smaller batches, betting on speedy production instead. If a certain outfit goes viral, Shein will be able to provide the necessary amount of pieces in no time.
This process heavily relies on algorithms that help Shein identify newly trending products, communicate the information to Shein’s unique supply management software, and results in the shop being able to add almost 3,000 new styles to its platform weekly.
The strategy also allows Shein to invest in the looks that are most likely to go viral, thus saving money not only on production, but also on design staff.
On-demand business model & unique supply chain management
This point is the direct result of the previous one. Instead of cooperating with large factories with stiff agreements, Shein partners up with small and mid-size workshops that can take daily orders based on the items requested by the shoppers.
This is mainly possible because Shein caters directly to individuals instead of stores. With this approach, there is no need for mass production and bulk orders – the pieces that need to be sold will be delivered, and any gaps in the revenue will be quickly filled by a new collection.
Aggressive social media marketing for the win
Finally, Shein is known for its deep integration with social media and popular influencers. As such, the brand has been leveraging the full benefits of an effective SMM strategy since back in 2012, when most companies were only beginning to learn how to use social media for marketing.
Their social media efforts are robust and encompass multiple platforms including Pinterest, Facebook and Twitter, but the real success was the mass adoption of Shein fashion by TikTok content creators. In fact, today the platform is known as the main promoter of Shein collections with both free and paid advertising.
TikTok is a platform known for making people famous overnight, so it shouldn’t come as much of a surprise that it could do the same for a brand.
Not everyone is a fan
The fashion industry is one of the largest but also one of the most environmentally unfriendly sectors. Brands today face a dilemma – social responsibility or growth at all costs. At one extreme we have companies that have turned their processes upside down to be as ethical as possible. Most have implemented some kind of strategy towards sustainability, which is one of the strongest trends today. At the other, there are brands like Shein, which have made rapid no-matter-what growth a priority.
It’s true that the “Chinese online-only retailer taking the world by storm by nothing but SMM and on-demand fast fashion” story is a fascinating one. However, there are also certain pitfalls that Shein has so far managed to avoid that an inexperienced e-commerce could easily fall into. It’s hard to disrupt the market the way Shein has without creating a few enemies and problems at the same time.
Fast-fashion products aren’t exactly known for being top-notch. However, there are still decent brands producing acceptable clothing at affordable pricing. You may not shop in Primark for its outstanding quality, yet you will expect slightly more from the jeans purchased in H&M or Gap, even though both are fast-fashion stores.
Shein, unfortunately, has a long way to go before it can compete with these global giants on their turf. People have been burned on products purchased via sites like Zaful and AliExpress too many times to blindly trust another Chinese brand that doesn’t do quality control on its work.
Another far more crucial issue is the ethical questions Shein’s expansion raises.
First of all, due to their immense item count, the brand isn’t always able to keep track of every product they deliver, which often results in offensive and culturally inappropriate pieces.
Also, the copy-paste model of Shein designers is destined to leave original artists uncredited and angry from time to time.
There is also a whole veil of secrecy around the brand that seems to have too many people wondering what that lack of transparency is all about. As a result, there are numerous accusations towards Shein being unethical towards its employees, using child labor, hiding some of the negative environmental effects of their production units, or simply encouraging overconsumption.
The lesson we can all learn from Shein
There are many factors that have contributed to Shein’s growing popularity on the global market. However, while some may see it as an overnight phenomenon and mere luck, there are those who would agree that as a business, Shein has come quite a long way since its humble beginnings back in 2008.
Many e-commerce businesses, not only those dealing in fashion, can learn the value of a properly established supply chain or fruitful cooperation with people on TikTok that you would never otherwise be interested in. However, it’s important to keep in mind that everything comes with a price and success always comes through trial and error along the way.
Is Shein here to stay or will it cool down like AliExpress did some years ago? Only time can tell. For now, the best we can do is to learn both from their successes and their failures as we try to bring our own companies to the global retail stage.
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