How Did Shein Become The Largest Fashion Retailer In The World: A Case Study...
Chinese fast fashion retailer officially became the largest fashion retailer in the world this year as it secured a $100 billion valuation in its latest fundraising round.
Shein has become one of the biggest fashion retailers. They were recently valued at $100bn after their latest fundraising round. For those who don’t know about Shein, Shein is a Chinese fast fashion retailer created by Chinese entrepreneur Chris Xu, an SEO expert, in 2008.
Xu had previously launched an online wedding dress business called ‘SheInside’ with three of Shein’s top executives. He then decided to move on to womenswear and rebranded to Shein in 2015, as he thought it needed a simpler name that was easier to find online. This was when the business started to take off for Xu and Shein and became a fast-fashion phenomenon amongst Gen Z, selling trendy clothes in more than 150 countries.
How did Chris Xu do it?
Social media has been core to Shein’s success, it is exactly where it is now because of its strategic marketing efforts, including its Shein Influencer program. Their influencer marketing strategy has been key to driving brand awareness and interactions that lead to sales conversions. Things such as ‘Shein Hauls’, by popular influencers, where they unpack their Shein deliveries, try on clothes and share how they feel on camera, have helped Shein boost its online presence on various popular social media platforms such as TikTok, Instagram, and YouTube.
They are extremely efficient and tech-savvy which helps them beat all their competitors. With their developed location and software technology, they are constantly gathering and analyzing customer data and using that knowledge to craft new designs — within as little as three days. Consumers are able to find the exact style a luxury brand is offering on Shein for a much cheaper price.
Shein is also able to undercut their competitors by offering very low prices. They have spent years cultivating relationships with Chinese garment factories and manufacturers, whereas most Western brands generally outsource this work. Matthew Brennan, a Beijing-based writer, and analyst of Chinese technology says “Shein has built a system similar to Uber where new orders are coming into factory owners’ phones and they receive the order.” This helps Shein have a fast turnaround with new items of clothing.
Over the last year; Shein has received a lot of backlash for their low prices and treatment of staff. If their prices are so low, it raises concerns among consumers about how much exactly they are paying their staff. This is the issue with fast fashion brands in general. This newsletter is not promoting Shein as I’m personally not the biggest fan of fast fashion but I just find it super interesting that they’ve managed to surpass Zara and H&M and become the world’s biggest fashion retailer.
Have a great week!