The world’s top apparel seller isn’t Amazon, AliExpress or Walmart. As of the latest PYMNTS Provider Ranking of Shopping Apps, the enigmatic brand SHEIN is number one, continuing the fascinating story of how SHEIN turns fashion trends into transactions at speed and scale.
Resourceful rivals are doing their best to level set apparel economics currently favoring SHEIN’s hard-to-duplicate global fast-fashion model, similar to brands like H&M, UNIQLO and Zara.
Pronounced “she-in,” SHEIN is the brainchild of Chris Xu, who founded the company in 2008 in China and quickly tapped its manufacturing and international logistics muscle to turn around runway looks within weeks, priced for fashionable buyers on a budget.
There’s always been a hint of mystery around SHEIN, and there still is.
On Feb. 16, Reuters reported that “China’s Shein is aggressively expanding its Singapore office after making a Singapore firm its de facto holding company, according to people with knowledge of the matter and a Reuters analysis of filings by the online fast-fashion retailer.”
Reuters added that last year SHEIN “de-registered its main business, Nanjing Top Plus Information Technology Co Ltd,… Singapore-registered Roadget Business Pte, which lists Xu and three others as its representatives, was established in 2019 and since late 2021 has been the legal entity operating SHEIN’s global website,” per filings.
It’s too soon to know how the change of address will impact SHEIN’s operations. What is clear is that SHEIN is leading the fast-fashion pack with its approach to inexpensive influencer fashion.
Bloomberg reported on Dec. 1 that “as the pandemic accelerated the decline of physical retail last year, Shein brought in $10 billion in revenue, according to people familiar with its operations — well ahead, for example, of Zara’s online sales. It’s also enlisted Katy Perry and Lil Nas X for promotions, and introduced a Project Runway-style online fashion competition, with judges including Khloé Kardashian and celebrity stylist Law Roach.”
SHEIN also began offering buy now pay later services through Klarna in 2020, making its affordable fashions even more accessible to the younger demographics, the company’s prime buyers.
Being A Fashion Amazon
In an analysis of China’s controversial fast-fashion sector done with journalism nonprofit Rest of World, The Guardian reported in December that SHEIN “was founded in 2012 under the name SheInside, and reportedly began by selling wedding dresses abroad from its first headquarters in the Chinese city of Nanjing.” Unnamed spokespeople denied wedding dress beginnings.
Whatever its origin story, SHEIN is shaking up competitors from Amazon to Zara with its well-orchestrated supply chain management and ability to crank out hot new looks.
SHEIN operates “a sprawling online marketplace that brings together about 6,000 Chinese clothing factories. It unites them with proprietary internal management software that collects near-instant feedback about which items are hits or misses, which allows Shein to order new inventory virtually on demand. Designs are commissioned through the software – some original, others picked from the factories’ existing products,” The Guardian wrote.
The Secret Sauce
Rest of World found that from July to December 2021, SHEIN added “between 2,000 and 10,000 individual styles to its app each day,” using a system called “large-scale automated test and re-order (LATR)” that identifies hot sellers and makes more, with messaging to match.
That’s the SHEIN secret sauce — no stores, no runways, no celebrity designers — just factories ready to churn out whatever youthful fashions are trending on social media from day to day.
In a February interview with Slate, Rest of World investigative reporter Louise Matsakis said: “The normal model that I think we’re all familiar with is Zara will go to fashion week in Milan or New York and they’ll see what’s trending on the runways, and then they’ll come up with a season based on those trends. Shein is not driven by any of that. Instead, they’re listening to what people are looking at on social media, and it’s all data-driven.”
SHEIN has been eyeing an initial public offering in 2022. As PYMNTS reported in January, “Chinese fashion retailer SHEIN is once again exploring a public listing in the U.S. later this year, while founder Chris Xu is thinking about becoming a citizen of Singapore to help him get around proposed tighter restrictions on offshore initial public offerings (IPOs) in China.”
Related news: Report: Shein Likely to Go Public in US Later This Year