Inside the Sudden Rise of China’s Mysterious $15 Billion Fast Fashion Retailer - Shein

I read some stories about Shein's success, at least marketing and financial-wise, on Dec 13, 2022, when there was news about Shein exploring the online marketplace business model. I’m not sharing my opinions of whether the potential business model would work for them in this blog article (that could be another article), or whether we should boycott Shein because of its negative environmental impact and controversial working conditions.

Today I want to share my initial learnings on their lightning-speed business success.

Here are two helpful articles. I especially enjoyed reading the Wired one.

My high-level takeaways: Growth drivers: Product + Channel (maybe + Master of Consumer Behavior)

  • Products that the target market wants (the competitive advantage can be low price, technology, or economy of scale, for us - Yishi’s founding story) +

  • Channels, of both sales and marketing, that are mainstream and can scale fast in a relatively low-touch way.

Some smaller, specific notes:

  1. Mid-size influencers are their influencer marketing sweet spot now but they started with small influencers and used a site called Lookbook.nu to find small-time influencers in the US and Europe and started sending them free clothing.

  2. SEO helped early days too

  3. Low working capital: "only when an item began selling did they place a small bulk order with a given wholesaler."

  4. Software and automation make they work better and faster - their decision-making process, product optimization, loss cutting are all faster

  5. "Under an international agreement, it often costs less to ship small packages from China to the US than from other countries, or even from within the US itself."

  6. Overall, its business model is unique and may not be the "role model" business by all standards, but I do think there are many things we can learn from its success to date. 

I hope you find something useful in Shein’s story.

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