The western Gen-Z ramps up the rise of Shein during the pandemic, making it the No. 1 downloaded shopping apps in 54 countries/regions on IOS play store in 2021. Today, Shein occupies 30% of the US fast fashion market and has become the largest online-only fashion enterprise in the world. [1]

Shein challenges H&M, Zara and other fast fashion cachet brands of a game that they invented. She suppresses the frame of her rivals, such as ASOS and Boohoo, through rock bottom pricing and real-time shopping.

What’re the secrets inside Shein’s business model? Let’s dive in.

B2C: Cut The Middlemen

Little do we know about Shein’s background. As a Chinese-based company, Shein is not at all putting its main focus on the Chinese market, but only on the west. In fact, a fraction of people in China has heard of this brand.

This 7 years-old fashion brand was founded in 2008 by an entrepreneur Chris Xu, who was initially selling wedding dresses online. [2] With his insights on the supply chain, he noticed there is a bottleneck preventing his business from becoming faster and cheaper. The retailers. Therefore, He decided to build up his own supply chain to bypass the middlemen and create a solid B2C foundation for the future. And the reward is an accessory under $1, a top under $5 and a dress under $7.

Shein now collaborates with 6,000 third-party factories and roughly 200 contract manufacturers to refresh its closet daily. [3] On top of that, to ensure the manufacturing process conducts in a smooth manner, Shein demands the factories to use its internal supply-chain management software, which collects real-time customer data and provides guidance to the manufacturer on designs and production. [4] Located in Guangzhou, Shein owns an over 10,000 square metres warehouse in the rural part of the city and most of the orders are shipped directly from there.[5]

The diverse and well-structured supply chain reinforces its direct-to-consumer approach and positioning in the global competitive fashion landscape.

Extremely Fast Turnover Rate And Turnaround Time

Shein is the representative of combining B2C business with algorithms and data science to analyse users preferences and identify new fashion trends. According to Similar web data, Shein apps has the highest traffic in the fashion category with approximately 140 million visits in November 2021. Its performance is better than classic clothing brands, such as Nike, Zara and Adidas. On average, visitors spend 9.24 minutes and visit at least 10 pages each time. [6] The big data provides insights for Shein to constantly change its catalogue and cater to young shoppers’ fashion tastes.

With a total number of 600,000 products on-site, approximately 3000 new styles are uploaded to the site weekly compared to her rival Boohoo who adds only 500 designs each week. [7] For any design, Shein will only start with the order of 50-100 items to test the water. If it does well, orders from Shein will keep coming. It explains the reason why only 6% of the products can stay on the shelf for more than 90 days. [8] The rapid turnaround time is also a key success to win over millennials’ hearts. It only takes Shein about 25 days from design to production to launch a new product while Zara takes 5 weeks to finish a style. [9]

In this fast-changing world with celebrities posting their latest collection all the time, young customers will no doubt flock to search for a similar style but with an affordable price point. And Shein is where the hidden treasures are found.

Stay tuned for Part 2.