In 2021, Shein overtook Amazon to become the most downloaded shopping apps in the US. It is now the largest fashion company in the world. You may not have heard of this brand Shein a few years ago, but only started noticing it with the rise of TikTok and gaining popularity among the teens.
So, what is Shein about?
Shein is a B2C company based out of China. It focuses on fashion wear for both men and women. Other categories such as children’s apparels, accessories, bags, and shoes are in their platform too. The target regions for shoppers are mainly in America and Europe.
It has gained popularity with people of all generations, especially with gen Z who likes trendy and fashion. There are many vloggers or bloggers who have made posts, comments or shares on Shein at some point of time.
And, why has it been so popular?
1. Shein operates in an on-demand business model
It means that the volume of new products are very closely related to popularity and demand from the market. It is created in small batches to make it available to the market. Products that take a longer time to deplete and sell off, would be categorized as slow moving selling products and thus no further production for this piece of item. There would be lesser clothing waste to the earth as well.
2. Shein foresights and predicts the new fashion trend
Big data and algorithms are key tools in helping Shein to make judgment on the next fashion move. That algorithm learns over time what people want, and adjusts. It will identify the keywords that users and gen Z input and predict on the next big move. Data science lets you understand buyers, visualize campaigns, and create targeted messages. Analytics can help you verify which URLs are getting crawled, identify referral sources, check page loading times, indexing, redirects, response errors, bounce rates, and more.
3. One of its kind – Supply Chain Setup
Production factories are required to use Shein’s supply chain management software that allows Shein to closely monitor the manufacturing turnover on process and products. Aside, Shein will share real-time customer search data to alter production based on needs. Reports share that the design to production time for Shein is as little as 10 days vs other big names that requires 5 weeks (35 days) turnover.
4. Low Price Point
The price at Shein is ridiculously low compared to other platforms. Similar products might be selling at half of the price at Shein. The low entry price of the products managed to attract many new buyers and they could easily snap up 10 to 15 pieces of apparels under $100.
5. An icon of trendy and fashion
As it is welcomed by teens, they are creating videos to share on what can be bought in Shein under a low budget. This is a free word of mouth marketing for Shein and part of the reason it has gained traction and users to join in. It helps to create the fear of missing out (FOMO) amongst the teens. As of April 2022, Shein has 3.8 millions of fans with 27 millions of likes on TikTok; whereas it has garnered 24 millions followers on Instagram.
6. Partnership with Key Opinion Leaders (KOLs)
Aside from the organic sharing from teen users, Shein partners with celebrities and well known influencers to promote the brand on social media. KOLs would be able to influence the behavior of people. The secret behind the success of KOL marketing is trust. KOL marketing only exists because many people trust key opinion leaders.
The Controversy
1. Child labor or undesired working condition
There is a running and constant unproven accusation on TikTok that Shein exploits on child labor for making apparels. To be clear, Shein has not publicly shared factory workers’ wages or hours and there is no evidence that Shein employs children.
2. Ethical Fashion and Sustainability
Fashion industry is one of the world’s most resource intensive sectors, and Shein being the #1 popular online brand, the greenhouse gases from production is hard to imagine. Most of the clothes from Shein are made from synthetic fabrics, which are responsible for releasing plastic microfibers into oceans.
Bottom Line:
Shein’s business is modeled on internet-based sales for desktop and mobile users. Shein is one of the most talked-about brands on TikTok and YouTube, and the most visited fashion and apparel site in the world. Shein generated $15.7 billion in 2021, a 60 percent increase on the $9.8 billion it made in 2020 Despite all the controversials, it doesn’t stop it from becoming the hottest teen brand on the market in TikTok.
Question to ponder:
Will Shein still remain as the future of fast fashion?
