Why SHEIN is so successful in the market?

Everyone knows SHEIN right? In the last few years, Shein has quickly become the world’s biggest player in fast fashion. The company sells clothing that is cheaply and rapidly produced, then sold at incredibly low prices — many items are under $10. It has popular online stores, and you can get all kinds of stuff from its app and web version. As there are so many e-commerce apps nowadays, what makes SHEIN so successful?

Background Story of SHEIN

The company was established in Nanjing, China, by Chris Xu in 2008 and is known for its reasonably priced clothing. SHEIN started more as a drop shipping business rather than a retailer in the early days. Instead of designing and manufacturing clothes, the company bought its merchandise in Guangzhou wholesale markets. SHEIN acquired Romwe, a Chinese retailer, in 2014, transforming the company into a “fully integrated retailer”. As one of the largest fast-fashion companies, SHEIN can ship to over 220 countries around the world thanks to its global warehouse network. Similar Web estimates that SHEIN’s website received 115.5 million visits worldwide in 2021, second only to Nike, Zara, Macy’s, Lululemon and Adidas in the fashion and apparel category

Swot Analysis of SHEIN

4P of SHEIN

Product

• SHEIN offers a wide range of trendy and affordable fashion products, including clothing, accessories, and footwear.
• The product range is frequently updated to reflect the latest fashion trends, and Shein is known for its fast turnaround in bringing new styles to market.

Price

• SHEIN is known for offering products at competitive and affordable prices. They often run promotions, discounts, and sales to attract price-conscious consumers.
• The pricing strategy is aligned with the target market, which includes young, budget-conscious shoppers.

Place

• SHEIN primarily operates as an e-commerce platform, and customers can purchase products directly from its website or mobile app.
• The company ships its products globally, reaching a wide international customer base.

Promotion

• SHEIN heavily relies on digital marketing and social media to promote its products. They often collaborate with influencers and use social media platforms to showcase their latest styles and promotions.
• The company engages in online advertising, email marketing, and other promotional activities to create awareness and drive traffic to its online store.

Holiday Promotion of SHEIN

KOL Strategy

Shein has gained popularity in large part due to shoppers on TikTok creating hauls to show off what they purchased from the online retailer.

Customers and influencers on TikTok have driven much of Shein’s international appeal. Creating a #Sheinhaul is a rite of passage for many teens and 20-somethings. Shoppers dump piles of Shein-branded packages from large cardboard boxes onto the floors of their bedrooms, where you’ll also probably see garlands of fake ivy and string lights hanging from the walls. One woman filmed a box truck delivering a giant box to her driveway after she said she bought $2,000 worth of Shein products.

Shein is the second most-downloaded shopping app in the US, according to UBS Evidence Lab data. Shein has more followers on TikTok than any other apparel retail brand and is the most Google-searched apparel retailer in the US, according to UBS data.

Challenges

However, SHEIN is also facing many challenges.

Shein has faced a lot of backlash for its role in climate pollution

Shein has achieved significant success but faces growing criticism due to its lack of supply chain transparency and environmental impact. The company’s high production volume contributes to overcrowded landfills and substantial carbon emissions. Shein claims to align with UN Sustainable Development Goals in its sustainability efforts, with a focus on reducing waste through its digital supply chain and using eco-friendly printing methods. Critics argue that these efforts are overshadowed by the sheer number of new styles Shein introduces annually, estimated at 314,877, far exceeding other fashion retailers like H&M, which produces significantly fewer styles.

Critics question Shein’s manufacturing and supply chain practices

Shein is headquartered in Singapore and collaborates with more than 6,000 suppliers in China. The company has faced allegations of working with manufacturers that violate labor rights. An investigation in 2021 revealed a pattern of insufficient oversight and poor working conditions at some of Shein’s manufacturers. It found that Shein’s suppliers frequently sublet orders to small workshops located in deteriorating buildings to reduce costs. As these workshops do not have direct dealings with Shein, the company cannot verify the working conditions in these facilities.

Now as Shein battles rival Temu in dual lawsuits, designers are suing the fast-fashion company, alleging that it stole their artwork.

SHEIN’s offline market tour

Shein is partnering with fellow fast-fashion retailer Forever 21, furthering the retailer’s efforts to expand its product offering beyond Shein-produced items. Items from Shein may be sold in Forever 21 stores, and Forever 21 items will be sold on Shein’s site.

Conclusion

Shein’s future is likely to be shaped by a growing emphasis on sustainability and ethical practices, as the company faces increasing scrutiny over its environmental impact and labor practices. To remain competitive and address these concerns, Shein may invest in more transparent supply chains, work on reducing its carbon footprint, and adopt more responsible manufacturing processes. Expanding its market presence, diversifying its product range, and leveraging technology for enhanced customer experiences could also be part of the company’s growth strategy, while navigating evolving regulatory challenges and competition in the fast-fashion and e-commerce sectors will be key to its future success.