Home Asia News The global rise of Chinese online retailer Shein

The global rise of Chinese online retailer Shein

While little known locally, Chinese e-commerce company Shein has taken over the global fast fashion market. The Nanjing-based fashion retailer was founded in 2008 and ships only in overseas markets. It operates websites in 220 countries, including countries in Europe and Asia, Australia, Russia and the US.

The Chinese fashion company’s focus is women’s wear, but it also offers other fashion items, such as men’s apparel, children’s clothes, accessories, shoes, and bags.

Although Shein’s exact financials are not disclosed, the Chinese company’s sales are estimated to be about $10 billion in 2020, up nearly 250% YoY. “Shein could realistically overtake Zara in terms of revenues by 2022,” analyst Douglas Kim wrote on Smartkarma.

According to Forbes, Shein’s valuation exceeds $15 bn. The company completed a Series E financing in 2020 and there are rumors for a possible $47 billion IPO.

Shein – the rise of ultra-fast fashion

Shein’s success is based on a fast pace. According to its WeChat account, the company controls its entire production chain, from design to procurement and manufacturing.

Shein only manufactures small batches of thousands of designs and then increases the production of those that are most popular. The company typically adds 500 new items to its platform every day, while European fast-fashion retailer Zara only launches 12,000 new designs annually.

Targeting mainly Gen Z shoppers, born between 1997 and 2010, Shein aggressively advertises in social media platforms like TikTok and Instagram, also promoting its products via influencers. It sells at a very low price, even undercutting competitors like fashion discounter Primark or Zara. According to Societe Generale, the Chinese retailer sells dresses at half the price of Zara.

Shein also banks on mobile. The mobile app has surpassed Amazon as the most downloaded shopping app on iOS and Android in the US, according to the May 2021 report by analytics firms App Annie and SensorTower. Shein’s app is among the top in the category of Android devices in 13 nations. Moreover, the app ranked first among iOS apps in 54 countries, including the UK, Brazil, Australia, and Germany.

Shein’s expansion plans

The Chinese company has recently expanded to Southeast Asia with a new hub in Singapore. In an interview with Marketing-Interactive, a company spokesperson revealed that Shein plans to create a standalone website for the Malaysian market. Like its Western strategy, the retailer will use niche, digital, and influencer marketing for its products in the region.

Besides an online expansion in the region, Shein furthermore plans pop-up stores in Singapore so that customers can see and feel their fashion items. Globally, the Chinese company has launched Shein X – a programme to support young designers. It will expand to Singapore and Southeast Asia this year.

Despite all the success, there have been some copyright and infringement issues. AirWair International, owner of the Dr. Marten brand, has sued Shein for selling a fake Marten Boot. Also Levi’s filed a similar complaint in 2018 in regards to Shein products with nearly identical designs to Levi’s trademarks.