Chinese online retailer Shein is a fast fashion leader, jumping on trends and distributing Shein fashion on a global scale. But what makes them so successful?
When it comes to fast fashion, Shein reigns supreme. The Chinese online retailer has built a massive empire in a short amount of time by offering high-quality clothing at incredibly low prices. So what is their secret? Why are they so successful when the market is saturated? In this case study, we will take a closer look at Shein's business model and how they have managed to become the world's leading fast-fashion retailer.
Unlike most fast-fashion retailers, Shein takes a completely new approach by introducing predominantly Chinese fashion trends to the West. From cute hair accessories to dresses inspired by K-Pop icons, Shein has embraced social media to influence shoppers worldwide to invest in their Asian-inspired clothing and accessories. In fact, according to retail analyst Richard Lim, the fast-fashion retailer truly understands the power of social media and how creating an online community is essential for business growth. Identifying fashion influencers online such as Jourdan Rianeand Georgia Toffolo, Shein runs a wide range of sponsored promotions on TikTok to supercharge online sales.
While based in China, Shein fashion is shipped to 220 countries, with the US the largest consumer market for the retail giant. In 2020, the company made close to $10 billion and is considered the most talked about fast-fashion retailer in the world, according to the web analyst platform Similarweb.
There's no doubt that Shein is successful worldwide due to its competitive pricing strategy. While some fast-fashion brands such as PrettyLittleThing can often charge $50 for a dress, Shein offers similar products for less than $15, making it ridiculously affordable. No matter what your budget is, you will certainly be able to find a new outfit from Shein that won't break the bank!
Yet, Shein's business model means that it doesn't actually produce as much waste as its competitors. Rather than manufacturing single designs in large volumes, Shein offers limited small batches of around 100 items, which will only be increased if sold quickly to meet a rising demand. This smart marketing strategy not only allows Shein to pinpoint the most profitable items to sell online and manufacture in bulk but also reduces their carbon footprint too.
Talking about understanding trends, Shein also takes advantage of algorithms and data to figure out what will be the next must-have item online. And in doing so introduces around 2,800 new styles to its website every single week! Being able to make better data-driven decisions as a business also benefits consumers by giving them far more choice than other fast-fashion retailers online.
Now, let’s touch on their speed and performance as a retailer. Fast-fashion companies must manufacture products to reflect new trends within the global fashion industry as fast as physically possible! Failing to do this means giving your competitors the upper hand. Well, Shein can turn around a new item in just 25 days. For other retailers, this process can take several months. In fact, stores such as H&M and Zara struggle to compete with such rapid lead times.
Along with speed, at any given time, Shein sells around 60,000 items online thanks to its network of around 200 contract manufacturers within close proximity to its headquarters in Guangzhou, China. ⁵ While this certainly makes for good business, it also empowers consumers around the world to shop online using one single platform and browse thousands of goods. From womenswear to clothes for kids to menswear, homeware, and even items for pets, you can spend hours just exploring all the different categories!
Brands From The East - Fashion Of The Future
While Western brands are often slow to adopt new technology and make decisions to optimize as a business, Eastern fast-fashion is filling this gap and raising the bar for the industry as a whole. By focusing their attention on providing in-demand goods that are not only affordable but can be easily purchased online, Shein is leading the way forward for other Eastern brands to expand to the West.
At Branding Records, we prepare and support brands from the East to make a positive and memorable impression on the West, just like Shein. Connecting brands with consumers of the future invest in a more sustainable business strategy by investing in your brand and online presence. We also support Western brands who would like to enter the Asian market, breaking down cultural barriers and making this transition easier than ever. Follow in the footsteps of fast-fashion leader Shein and contact our team today!