Headshot of Giacomo Iotti, a B2C digital marketing manager who likes to write about digital news and trends.

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SHEIN: The Enfant Prodigue of the Fast Fashion Industry / Part 1

SHEIN's market share surpassed the one of H&M and Zara combined. What are the ingredients of its success?SHEIN: The Enfant Prodigue of the Fast Fashion Industry / Part 1

I admit I know very little about fashion. Even less about Gen-Zers' taste.

But as a marketing and ecommerce professional, I couldn't ignore the story of SHEIN, pronounced "She-in".

SHEIN is the web-only "enfant prodigue" that has taken the fast-fashion industry by storm. It's a Chinese giant valued at $100bn, but it doesn't look or feel Chinese. In fact, it doesn't even market to China!

With the US being its main market, revenue grew from around $3bn in 2019 to an estimated $20bn in 2021. Not bad!

Its market share surpassed H&M and Zara's combined, likely making it the largest fast-fashion retailer in the US. All of this, while being still relatively unknown to over 30s like me.

So what are the ingredients of its success?

1️⃣ A disruptive supplychain model.

2️⃣ Smart use of digital marketing and social influencers.

3️⃣ AI-driven design choices.

4️⃣ Tax and regulation loopholes, as well as avoidance of geopolitical controversies.

  1. They are able to release 6,000 new SKUs per day, thanks to an agile network of geo-concentrated small Chinese manufactures.
  2. On top of recruiting professional TikTok influencers, they take advantage of a large network of independent designers that can't wait to show to their friends their creations available on Shein.
  3. Engineers constantly scrape the internet in search of the next trend. An AI algorithm processes the information and sends it to the suppliers, who then work on new designs almost instantly.
    ➡️ This is real-time fashion! ⬅️
  4. The US-China trade war brought the Chinese government to introduce tax benefits aimed at online retailers who export to America, like Shein 😀. Plus, customers' orders are shipped directly from China in small, low-value parcels, which helps avoid expensive customs fees in the US.

However, SHEIN now faces several challenges. Find out more in my next post!

sources: Economist, Bloomberg, Fortune, Ben Evans' blog

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