Shein, the mysterious cheap clothing brand that triumphs among young people
According to the BBC, the popularity of this “ultra-fast” fashion brand has exploded during the pandemic. But if you are over 30 years old, it is very likely that you have not heard of it.
In Latin America, two of its best markets are Chile and Mexico and, in fact, last May it opened a temporary store in Mexico City during the sales season.
Betting on consumers who follow trends and want to save money, this internet giant adds some 6,000 new products every day to its catalog.
It has also been criticized for its environmental impact, for lack of transparency and for allegedly copying the work of little-known designers, something Shein denies.
So what drives the success of this company?
1. The average cost of her pieces is US$10.70
The little-known founders of Sheinside (the original name) came together in 2008, led by entrepreneur Chris Xu, who started out in marketing digital and sold wedding dresses online.
The short form of its current name, Shein, was adopted some five years later.
Though headquartered in China, the company primarily targets customers in the United States, Europe and Australia, with its crop tops, bikinis and dresses costing about $10.70 on average.
Currently it is one of the big players in the field of fast fashion and places its products in 220 countries.
Richard Lim, chief executive of independent consultancy Retail Economics, says the pandemic crisis provided a boost to the company's sales.
“The lockdowns meant many consumers were spending more time browsing online,” he said.
“This helped the online store to increase its presence and reach a wider audience faster,” he added.
Although the company does not disclose financial figures, consultancy CB Insights estimates that sales exceeded $10 billion in 2020.
2. A very wide offer of up to 600,000 products
At any given time, Shein has up to 600,000 products for sale on its online platform.
To do this, it relies on thousands of third-party suppliers, as well as some 200 contract manufacturers, near its headquarters in Guangzhou.
Using what China and technology expert author Matthew Brennan has dubbed “real-time retail,” smaller companies along with their supply chains receive information from company-owned platforms about what they are trends and how well certain products are doing.
Based on that data, they produce a batch of between 50 and 100 products per model. If they do well, Shein orders more. Otherwise, they are discontinued.
Shein can create a new product in about 25 days. For many retail stores, that can take months.
They have accelerated the “try and repeat” model, used by well-known companies such as H&M and Inditex, owner of Zara.
As the BBC has learned, only 6% of Shein's production remains in stock for more than 90 days.
The company ships directly from its headquarters in Guangzhou, but its packages take at least a week to reach markets like the UK and US, while some of its competitors like Boohoo, OhPolly and Asos offer overnight delivery following.
3. Succeeds on social media: more than 250 million followers
Using an army of influencers, from students serving as “university ambassadors” to reality TV stars, Shein has achieved add more than 250 million followers in their accounts on social networks.
Targeting your ads well to key audiences and leveraging influencers on Instagram and TikTok has helped you stay relevant to younger shoppers.
Those efforts have been fueled by the fact that he frequently hosts live shows on his digital platforms to promote his products.
“This is more characteristic of Shein, as live streaming is less used by Western brands, but it has huge potential to drive sales, as seen in China,” explains Emily Salter, trade analyst GlobalData retailer.
However, the company's use of its consumers' data has raised concerns in the UK.
Shein was described as "manipulative" by web design agency Rouge Media, which identified eight elements on its website that invited shoppers to spend more money or hand over their personal information in exchange for discounts or rewards points. buy.
4. She employs 200 designers (but is accused of plagiarism)
Building a colossal catalog of products and models quickly means Shein has come under fire on several fronts.
It has been criticized for selling products such as a rug to be used by Muslims in their prayers described as a “Greek rug”, for which it was forced to withdraw it from the market.
She has also been accused of violating intellectual property laws and faces several lawsuits from other companies, such as the makers of Dr Martens boots. Shein has denied committing any wrongdoing.
The company has 200 designers among its more than 7,000 employees.
A senior Shein executive told the BBC that they also have a team that reviews new designs offered by their suppliers before they are posted on their website, to try to filter out any potential violations.
Though the company has paid out more than $1 million to outside designers to date, complaints from smaller businesses are still surfacing on Twitter, some of whom claim Shein allegedly copied their designs and sold similar products for less.
5. Raises questions about sustainability
Shein's pricing has also raised questions about its environmental impact and labor practices, as have many of its rivals.
It's a huge challenge. The fashion industry accounts for up to 8% of global carbon emissions, according to a UN study.
Roberta Lee, an expert on sustainable fashion, notes that Shein and other fashion companies frequently use polyester fabrics, which rely on “taking more oil and carbon out of the earth” and are not biodegradable like natural materials.
Lee accuses the company of taking advantage of “re-clothing fear syndrome” and notes that Shein pieces featured in social media videos “are likely to end up in the landfill after being worn and washed a few times.” .
The Chinese company insists that its method of producing clothes in small batches is more efficient and produces little waste. A spokesman said its business model "balances the needs and wants of consumers with the inventory process."
He also says on his website that he wants to use more recycled fabrics and that he uses printing technology that pollutes less than traditional printers.
A recent BBC investigation revealed that job advertisements to work in Shein's factories and warehouses appeared on the internet, saying that people of certain ethnicities such as Uyghurs should not apply.
Shein said they did not fund or endorse the ads and are committed to "ensuring high labor standards."
A company spokesperson also told the BBC that it has a "zero tolerance policy on forced labor, child labor and discrimination."
Analyst Emily Salter notes that the core consumers of her products are “quite mixed buyers” overall, with Gen Zers more willing to rent clothes and buy second-hand clothes, but are also the biggest customers fast fashion brands like Shein, who are under increasing scrutiny.
