THE RISE OF SHEIN
Shein is the world’s largest fashion retailer as of 2022. Founded in 2008 by Chinese entrepreneur Chris Xu, Shien initially was not involved in manufacturing but in 2012 the company established its own manufacturing unit and supply chain. In 2022 the Chinese brand shifted its headquarters to Singapore for international expansion and in the same year, the company generated $24 billion in revenue.
Between 2009 to 2012 China saw a smartphone revolution, the number of smartphone operators went from 30 million to about 200 million. China surpassed the US and emerged as the world’s largest market for smartphones, that was the era when China realized the potential of the E-commerce industry. Although Shein was not targeting Chinese customers but rather focused on in-house algorithms which basically means- an intensive collection of data regarding customers’ choices & preferences, finding out what trends on search engines and observing how customers respond to various products available at other fashion sites. Then it began with extensive production, introducing new styles in the market and soon Shein emerged as a competition to other popular fast fashion brands including H&M and Zara.
WHAT IS FAST FASHION?
image credit – https://images.app.goo.gl/i7nufD7j2KddSXxh8
Fast fashion basically means mass-producing products that are currently in trend at a low cost. Fashion keeps evolving and so do the fast fashion retailers who are in a continuous race to match customers demands. Fast fashion makes it easy for fashion enthusiasts to purchase trendy products at a reasonable price. Shein utilizes the manufacturing potential of China and produces its own designs at a massive scale and sells them at cost-effective prices, less than that of other fashion brands. Designers working at Shein keep in mind the aspirations of diverse consumers. The brand promises to provide qualitative products and the best fits possible which majorly attracts Gen Z towards it. Generation Z wants everything at just one click therefore brands advanced on the technical front will always be endorsed by youngsters.
SHEIN RETURNING TO INDIA
It has been reported that Shein is all set to once again operate in the Indian market under the guidance of the Reliance retail industry. The Indian government banned more than 200 Chinese apps in the first half of 2020 including Shein. According to the GOI Chinese apps were posing a threat to the integrity & security of the nation. The partnership between the Chinese fashion brand “Shein” and the Indian largest retail industry “Reliance Retail” will expand the Indian consumer base of the former. The Wall Street Journal reported that Shein has also collaborated with another global fashion brand “Forever 21” which will be mutually beneficial for both the company. Products belonging to Shein will now also be available at the offline stores of Forever 21.
SHEIN: REAL-TIME FASHION
The brand started in China and became the ultimate fashion empire that too in a short period of time. This happened because when other fast fashion brands were busy expanding their offline retail stores, Shein anticipated the real aspiration of customers via Google searches and social media posts and presented exactly what customers needed before anyone else at pocket-friendly prices. Shien’s business model is about working tirelessly to match the pace of the constantly changing fashion industry.
Insights – https://youtu.be/V0zLoogcxms?si=NribksRd0ob08uIm
SHEIN: REVENUE MODEL
News broke out in the first half of 2023 that Shien is all set to raise $2 billion from a new funding round and that it expects a US listing. Concerned sources revealed that the Mubadala investment company (Emirati state-owned) will be the major investor in this round along with existing investors General Atlantic (GA) and Sequoia Capital, China. Sources also conveyed the entry of a new investor in the funding round “Tiger Global management”. China laid down new regulations regarding how Chinese companies can list themselves overseas which declined the US listings by Chinese companies to some extent. Amid this regulatory crackdown and the geopolitical tension between the US and China, Shein shifted its headquarters to Singapore. In another development that took place, Shien started manufacturing in Turkey and will soon move to Poland as part of its European expansion policy.
Sources – https://www.statista.com/statistics/1360515/shein-estimated-annual-revenue/
TEMU: THE BIGGEST COMPETITOR OF SHIEN?
Temu is a shopping app owned by its parent company PDD Holdings. PDD Holdings was founded by ua Lin Cai and Zheng Huang on April 20, 2015, as a Chinese commerce group that operates at a multinational level. Temu was launched by PDD Holdings in the year 2020 which has now emerged as the biggest competitor to Shein especially in the US. Shein generates a significant amount of its revenue from the US but the newly launched Temu which deals in 100+ categories including clothes, jewelry,
accessories and much more is giving tough competition to the former.
Temu has achieved 19 million installs via the Google Play Store and the App Store, out of which more than 18 million installs come from the United States. Last year in October Temu had an average of 43 thousand daily installs while Shein had an average of 62 thousand daily installs. The very next month the average daily installs of Temu went to 185,000 while Shein could only achieve the target of 70 thousand daily installs.
CONCLUSION: VISION AND MISSION OF THE COMPANY
Shein has nearly 10000 employees operating in more than 150 countries and the brand has achieved this target within a decade. Shein believes that fashion means embracing individuality and thus it creates diverse products that can match the personality of the individuals. Shein follows the “digital first” model which means attracting online customers. The brand has pledged to provide multiple options to the customers directly within the Shein platform and to make fashion accessible to all.
