Have you heard of Shein? In case you haven’t, it is an online-only, fast-fashion retail company based in China, specializing in women’s clothing. It is also the world’s fastest-growing e-commerce company and over the past 18 months, it has taken the fast-fashion world by storm. It has now jumped leagues ahead of other fast-fashion giants like Zara and H&M and even ultra-fast-fashion brands like ASOS and Boohoo.
Zara and H&M first popularized the fast-fashion concept, which is a system in which new designs are sent to the sales floor in five weeks or less. ASOS and Boohoo then took it a step further by getting this done in a week or two. How does Shein compare? They complete this process in three days.
Small wonder then that last week Thursday they added over 7000 new styles to their site. For perspective, at the height of their omnipresence on social media in 2018, Fashion Nova was launching 600 to 900 styles in one week. And they thought that was something to brag about.
So what’s the secret to Shein’s supersonic speed? Their well-oiled supply chain management. They analyze trends and user data to decide which style they are going to release on the market next. This style then gets sent to Shein manufacturing suppliers in Guangzhou, China, by Shein’s in-house design team.
And here is where it gets interesting. These suppliers initially make a small batch to be presented online. And once it goes live on Shein’s website there is a direct connection between the shopping data gathered on there and the production output on the factory floor. Meaning that when an item gets many clicks and orders on the site, the suppliers almost immediately get their cue to a more sizable volume of that particular item.
And it doesn’t end there. As production of this item increases, the website’s algorithm also recommends it to more shoppers and Shein’s marketing team also spreads it far and wide across social media channels.
The results
This monumental speed has converted into monumental earnings. For the past 8 years, they have maintained a steady revenue growth of over 100% and, in 2020, this got close to $10 billion. And adding to the fanfare, this past June the Shein app was downloaded more often than even Amazon on the App Store in the US, an important market for Shein’s products. The company’s Instagram and TikTok accounts also have more than 23 million followers and its website drew more than 160 million visitors in June.
While the company is not without its faults — among which their glaring lack of transparency when it comes to reporting their compliance with international labor standards in their factories — their business omnipresence and influence are undeniable.
How will their success shape the global fashion industry in the post-COVID era?