An Overview of Shein
Shein is an international brand of fast fashion focusing on B2C. The company offers both men’s and women’s clothing. Besides clothing, Shein offers bags, shoes, accessories, and accessories. The company targets consumers in North America, Europe, the Middle Eastern, and other nations. Be it boho dresses, graphic tees, chic swimwear, or patterned blouses, Shein has something for everyone.
China’s SheIn has exploded from 500,000 to 4 million unique visitors a month in just a few months, making the company the best online fashion marketplace. Shein has now become one of the most visited fashion e-commerce sites in the world, surpassing not only Next and ASOS but also having a presence in 230 global markets.
The way Shein approached this group has been wise, and we can learn from their success in several ways.
How Shein was founded and who founded it?
The Chief Executive Officer (CEO) of Shein is Chris Xu (formerly YangTian Xu). Chris used to work at Nanjing Aodao’s ‘online foreign trade marketing department’ before founding Shein.
Chris always dreamed of starting up his own business, and Shein was his opportunity. To begin with, he was involved in developing Shein’s website. In time, Chris began to handle sales, revenue, and marketing at Shein and moved away from the technical side. It is Chris Xu’s vision and leadership that makes Shein stand out amongst e-commerce giants today.
As part of Chris’s strategy to popularize and intensify Shein’s reach, he set up a fashion blogger program, a free trial center, and a bonus points program. Despite high competition, he was able to create deals that appealed to buyers quickly.
Further, Chris Xu conjured up an exciting product catalog by recruiting designers from around the globe. Meanwhile, Shein has teamed up with upcoming designers to provide design ideas and drafts for the store. The designers were given a 30% commission from the sale of the design and a long-term collaboration contract if their designs were chosen. At Shein, these business models are referred to as C2B business models, where design professionals become members of Shein’s community. These are then known as ‘Sheinside designers’.
Shein’s global reach stretches to 220 countries across eight primary markets. The company has had to use strategic thinking to operate at this scale while remaining cost-effective.
Shein’s business model relies on internet-based sales that include both mobile and desktop storefronts. Since the company does not have to pay for maintaining and running a physical storefront, using an eCommerce business model helps the company to reduce costs.
For cost-saving reasons, Shein outsources some of its production. Despite this, Shein keeps a close eye on all of its partners’ operations to make sure they meet the standards set by the brand.
Shein revenue model
Shein is a major online retailer that serves online customers across the globe, creating primary net sales mainly in the United States as well as in France and Italy. Shein currently has its largest market in the United States, but the company also distributes its products in 219 countries, including Europe, India, the Middle East, and Australia, which have their specialized applications and websites. In terms of item range, Shein’s online fashion collection generates the largest sales volume.
From each sale, the company earns a profit margin. For the year 2020, Shein’s Global Rank by net sales is 46. According to their 2020 annual report, they earned US$2,764.8 million. Its revenue is not revealed publicly, but it has been privately estimated at more than $8 billion annually and is continuing to grow. It has experienced a loss of income due to the pandemic in 2020. In India, it is prohibited.
Shein’s Marketing strategy
The eCommerce company Shein has developed some of its strategies to work all over the globe, and its success is no surprise. Take a look at some global Shein marketing strategies that proved effective globally.
- Body Positivity
The brand has dedicated sections for plus-sized clothes, and it embraces body positivity. This company specializes in women’s garments and has been celebrating plus-size models, something that very few other companies have done so far.
- Shein Haul
h On YouTube & Instagram, look up “Shein haul” to see how many on-trend clothes influencers have been able to buy for a few hundred pounds from the store. Some of these videos have reached upwards of 3 million views.
- Social Proof
Shopping at Shein builds trust and increases conversion rates by revealing sales feedback from recent purchases. On the product page, you may see a “free trial report” as an example.
- Micro-Influencer marketing
Using influencer messages as product marketing techniques is a unique idea in Shein’s Marketing Strategy.
In contrast to most companies that use celebrity endorsements to market their products, Shein relies on influencers to market its services.
The controversy surrounding Shein
- Shein being a Fast Fashion brand
The Shein company produces clothing for cheap, mass production that is based on celebrity fashion trends. Most of the clothes cannot be worn more than a few times before they decay. A large percentage of global pollution comes from fast fashion.
Aside from the pollution caused by the means of production, the nature of fast fashion clothes, which are meant to be thrown away after only a season of wearing them, creates a lot of unnecessary waste.
- Exploitation of Labour
Shein allegedly engages in unethical practices such as child labor, which is particularly concerning given rumors that the company lacks transparency about its production chain.
Although Shein vehemently denies it, child labor laws vary widely among countries where garment factories are located. Bangladesh for example allows children as young as 14 to work, so Shein could legitimately employ teenagers while still claiming that it opposes child labor.
Hurting Religious sentiment
The company was criticized for selling Greek carpets branded as Greek fringe mats or tassel trim on its website in July 2020. Activist Nabela Noor, a Muslim fashion influencer and activist for inclusivity, exposed the issue on Twitter. In response, Shein promptly took down the rug from its site and apologized, calling it “a serious mistake.”
The company was also criticized in 2020 for selling a Nazi swastika necklace for £2. They quickly removed it from the website after backlash
- Theft of clothing designs and patterns
Shein has repeatedly been accused of stealing designs from small designers. Influencer Felicity Hayward accused Shein of copying the t-shirt she sold under her brand Self Love Brings Beauty in 2017
Shein was also accused of stealing a garment pattern from an independent designer in August 2020.
- The shutdown of Shein and comeback in India
Shein was a hit in India until June 2020, when it was banned along with a bunch of other Chinese apps due to border tensions between the two nations. Orders remain suspended in India for almost a year.
Shein made a comeback through Amazon’s Prime Day sale on 26th July 2020 in India.
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