By 2015, Xu had rebranded the company officially to SHEIN, raised more than $50 million in financing, and built a network of thousands of manufacturers across China. By 2016, SHEIN had a team of 800+ designers and prototypers, and claimed to no longer work with suppliers which produced “mediocre-quality” products and images. SHEIN made a push into the US market in 2017, advertising on daytime television and partnering with fashion influencers. The success of Shein lies in the fact that it has supercharged the fast fashion model.
Initiatives like Shein X have been launched in an effort to support up-and-coming designers
- While some customers are satisfied with the value they receive for the price paid, others express disappointment with the perceived lack of durability or longevity of Shein’s products.
- These ongoing public relations issues create uncertainty as to whether the company can maintain its grip on a customer segment that is increasingly conscious of ethical issues in fashion.
- Shein operates primarily through its e-commerce platform and mobile application, serving as the primary channels for its target audience to browse, purchase, and engage with the brand.
- Apart from this, the fashion industry is the second largest industry in terms of its water consumption, which makes sense considering that just one pair of jeans requires nearly 2,000 gallons of water to produce (via National Geographic).
- The European Union has issued a stark warning to Chinese fast-fashion giant Shein, threatening the company with hefty fines for allegedly deceiving consumers and violating EU consumer protection laws.
At any one time, Shein has as many as 600,000 products for sale on its online platform. “This helped the online retailer grow its presence and reach a wider audience more quickly.” Although it’s based in China, the firm mainly targets customers in the US, Europe and Australia with its cut-price crop-tops, bikinis and dresses, costing just £7.90 ($10.70) on average. But it’s also drawn criticism over its environmental impact, a lack of transparency and allegations it copies small designers, which Shein denies and says it takes seriously. While it’s expected buffett: the making of an american capitalist for Shein’s quality to be subpar based on the website’s prices, some Shein fails have been so shocking that they have actually proved newsworthy, such as one story about a woman’s shoes melting while she attended a music festival.
And those concerns are back in the spotlight as the Chinese firm explores listing its shares in London in a public offering that could value it at a reported $50bn. It also uses “gamification” strategies to boost customer engagement on its shopping app which is used by millions of people worldwide. “The brand’s success coincided with a boom in TikTok usage in Europe and the US,” says Ms Déglise-Favre. “The Chinese social media platform participated greatly in spreading awareness about the Shein’s ultra-affordable proposition.” The real turning point for the brand came during the pandemic, when online shopping took off and Shein’s sales soared, says Louise Déglise-Favre from analysts GlobalData. Since then it has grown into a global behemoth, best known for selling on-trend clothing, mostly to a Gen Z customer base.
- As of 2022, 66% of consumers preferred online marketplaces over traditional retailer sites, and B2C marketplaces are projected to facilitate $2.1 trillion in sales by 2024.
- It was the most downloaded shopping app in 2022 and is the most followed fashion retailer on TikTok.
- Gen Z customers will continue to drive much of the company’s momentum, but SHEIN is diversifying its core customer base via its expanded range of merchandise.
- Overall, Shein’s business model and target market are intricately linked, with its online-centric approach and direct-to-consumer strategy enabling it to effectively cater to the needs and preferences of its fashion-savvy customer base.
- Its reported valuation in April 2022 was $100 billion – more than H&M and Zara combined.
What Shein is accused of doing
Although many items still ship directly from Chinese factories, local places offer shorter waiting times for the same products. Now, the clothing on Shein comes from several wholesale warehouses around the world. Shein takes 6-7 working days for standard shipping and 2-3 working days for express shipping. When you place an order at Shein online marketplace, it takes 1-3 business days to process and they try to ship as soon as your order. The Shein branded goods, although based in China, can be found in the US and Canada through several online shop fronts.
Of these products, researchers at the University of Toronto found that two Shein items — a jacket made for toddlers as well as a red purse — contained higher amounts of lead than is healthy. The jacket tested as having 20 times the amount of lead that is safe for children to be exposed to, and the purse, five. Along with this, a children’s tutu dress from Shein was tested as having an elevated (but not necessarily unsafe) amount of phthalates. In September 2021, Shein updated its website to include a “Supply Chain Transparency Statement” and a code of conduct that its suppliers and manufacturers must agree to.
In the apparel category, Shein offers a plethora of options, including tops, dresses, bottoms, outerwear, and loungewear. Whether customers are looking for casual everyday essentials or statement pieces for special occasions, Shein’s apparel collection has them covered. Moreover, Shein’s sizing options cater to a wide range of body types, ensuring that everyone can find the perfect fit. In terms of quality, Shein positions itself as a provider of trendy yet affordable fashion. Shein acknowledges that its products may not match the quality of high-end brands and that’s why Shein’s products are priced so low.
It’s raised questions over sustainability
The fast fashion giant employs 200 in-house designers, out of more than 7,000 employees. The little-known founders of Sheinside got together in 2008, led by entrepreneur Xu Yangtian, who started out in digital marketing and selling wedding dresses online. According to Whinston, Shein’s 6,000 new styles per day feature is more sustainable than it seems. In a conference, he claimed that these new styles are created in small batches, which allows the company to figure out which of its styles are most popular before they commit to manufacturing large batches of clothing.
A spokesperson said that its business model “balances consumers’ wants and needs and the inventory process”. The prices of Shein’s products have also raised questions about its environmental footprint and its labour practices, like many of its rivals. Targeting trend (and cost) conscious shoppers on social media, the online-only giant adds a staggering 6,000 new items to its range daily. Shein has issued apologies for these offenses and made a “vow to do a much better job”. Additionally, the company revealed it “formed a product review committee with staff from different cultures and religions” to avoid repeating past mistakes; however, they’ve continued to face accusations of insensitivity and appropriation. “Our artisans, all women in Nigeria, spend 4-5 days crocheting such beautiful piece of art. It’s quite disheartening to see such talent and hard work reduced to a machine made copy,” the brand wrote on Instagram back in July 2021.
In its official statement, the European Commission noted that these practices breach essential consumer rights related to transparency just2trade broker review and fair dealing. “Shein now has one month to reply to the CPC Network’s findings and propose commitments on how they will address the identified consumer law issues,” the Commission said, as quoted by Reuters. Despite fully moving its headquarters to Singapore in 2021, SHEIN is still subject to the rising tensions between China and much of the rest of the world. In 2020, India banned SHEIN, reportedly in retaliation for an unrelated border dispute between it and China — with the decision being rolled back two years later. In the US, SHEIN has become a favorite target across the political divide, with some lawmakers calling the company a tool of the Chinese Communist Party and others asking the SEC to block any potential SHEIN public offering.
The site itself was branded first as a worldwide wedding dress brand ZZKKO and then later rebranded to SheInside while expanding categories beyond wedding dresses. However, it is not so simple as using inexpensive materials and cutting out the middleman by shipping directly to customers. Social media users criticised the move though, asking why judges such as fashion designer Christian Siriano and celebrity Khloe Kardashian would attach their names to the project. Eventually, she also snapped up homeware, joggers and even got her mum into shopping on the website. Shein was recently described as “manipulative” by web design agency Rouge Media, which identified eight prompts on its website encouraging shoppers to spend more money or give away personal data in exchange for discounts or reward points.
Shein sells items that generally lack in quality
The supremely successful brand usually targets the Gen Z crowd and has been successfully profiting through this marketing scheme. Explore Shein’s initiatives related to sustainability, including sourcing practices, environmental impact reduction, and ethical manufacturing. Evaluate the effectiveness of Shein’s sustainability efforts and any areas for improvement.
The rise and rise of fashion giant Shein
The brand has also confirmed they have build an in-house team to monitor supply-chain partners and vendors, all to ensure regular audits of suppliers. However, Shein has previously opened up pop-up stores around the world, from London, UK to Mumbai, India. These stores didn’t last forever, however, and as such, it’d be more accurate to say that Shein doesn’t have physical stores. Shein is a legitimate app through and through, and is available to be accessed via mobile platforms as well as its official website. Now, in 2024, it is offering merchants even more ways to sell their items via the Shein Marketplace. It has been criticised for selling items such as a Muslim prayer mat described as a “Greek carpet”, which it was forced to withdraw.
Gen Z customers will continue to drive much of the company’s momentum, but SHEIN is diversifying its core customer base via its expanded range of merchandise. SHEIN is a global online retailer best known for its extensive range of fashionable, affordable clothing and accessories. It operates as a two-sided marketplace linking 6K+ manufacturers of clothing and other physical goods with consumer demand around the world. Low-priced fashion under private labels like Romwe has long been SHEIN’s focus, but the company has expanded horizontally into electronics, decor, appliances, and other categories nasdaq holidays 2021 as well.
Market Size
If the company’s reply is deemed unsatisfactory, enforcement proceedings will follow — potentially leading to multi-million euro fines depending on the company’s EU revenue. The information herein is based on Contrary beliefs, as well as certain assumptions regarding future events based on information available to Contrary on a formal and informal basis as of the date of this publication. The material may include projections or other forward-looking statements regarding future events, targets or expectations. There is no guarantee that any opinions, forecasts, projections, risk assumptions, or commentary discussed herein will be realized. Actual experience may not reflect all of these opinions, forecasts, projections, risk assumptions, or commentary.