Shein, founded in 2008, is headquartered in Nanjing, which does not have a strong Internet atmosphere. The company was formerly known as Sheinside, a wedding dress e-commerce company, which means “Keep her in your heart.” At that time, in addition to the official website, SheiIn, like most Chinese cross-border e-commerce companies, used Amazon and eBay as its main battlefields.
Subsequently, starting in 2014, the company created its own brand Shein, launched a website and App, and began the branding process. In 2016, it was officially positioned as a “cross-border fast fashion Internet company.” Targeting overseas has been the company’s strategy from beginning to end.
Obscure at home, but booming overseas
Bet 50 cents, 99% of the Chinese people should Never heard of Shein. But it is such a brand that is unknown in China, but it has developed rapidly overseas and has become an internationally renowned clothing brand that may shake Zara’s status.
In 2019, WPP, the world’s largest advertising and communication group, and Google released the top 50 Chinese overseas brands. Huawei, Lenovo, Alibaba, Xiaomi, ByteDance and other brands were at the top. Shein was only Second to DJI, ranking 14th.
This is the third time Shein has been on the list. In 2017, Shein’s business covered 224 countries and regions around the world, and its revenue doubled compared to 2016. In 2018, Shein was one of the top ten most downloaded Chinese cross-border e-commerce apps, with revenue exceeding 10 billion that year.
On Black Friday in 2019, Shein’s daily sales exceeded 4.76 million pieces, and the transaction volume that year reached 20 billion. In other words, Shein’s annual growth rate of transaction volume has been stable at over 100% in recent years. So far, Shein has completed 4 rounds of financing, with a total financing amount of more than 320 million yuan. Its App downloads have exceeded 100 million and its active users have exceeded 20 million.
According to the E-Commerce News, in 2010, Shein launched its Spanish website and entered Zara’s hometown. From 2012 to 2015, it launched websites in France, Russia, Germany, Italy, and Arabia. According to the company’s official website, as of April 2020, Shein targets markets such as the United States, Europe, the Middle East, and India, covering more than 200 countries and regions around the world, with a maximum daily shipment volume of more than 3 million pieces.
▲Shein’s official company growth history, revenue reached 16 billion in 2019
The more intuitive data is that Shein has 11 million fans on Instagram , while Zara has 39.9 million fans. In Instagram’s data ecosystem, tens of millions of followers are an important manifestation of influence. Fashion Nova, another fashion e-commerce company that has become popular around the world due to its marketing by celebrity influencers such as Cardi B, has only 18.6 million fans on its official account. The much-watched British fashion e-commerce “dark horse” Boohoo has 6.6 million fans.
Feng Shui takes turns
History is always surprisingly similar. Since 2005, fast fashion giants such as Uniqlo, Zara, and H&M have successively established their presence in China. In front of European and American giants, the Asia-Pacific region, especially China, is the main destination for their global expansion. After more than ten years of development, China has become the second largest market in the world for Uniqlo and Zara, and one of the top five markets in the world for H&M.
However, as China’s manufacturing continues to mature, the rise of local fast fashion brands, and the prosperity of the e-commerce industry, European and American giants are gradually losing ground to China . In the past year or two, brands such as New Look (US), Asos (UK), Topshop (UK), Forever 21 (US), Old Navy (US) and Superdry (UK) under GAP Group have successively announced their withdrawal from China.
Today, there are very few European and American brands that can survive in the Chinese market. At the same time, Chinese brands are now gradually going global and actively occupying markets in Southeast Asia, Africa, and the Middle East.
Looking back at Shein’s development history, it can be briefly summarized into three markets: it started in Europe, developed in the Americas, and grew in India and the Middle East. 2016 was the first year Shein entered the Middle East. Its sales in the Middle East that year were 200 million yuan, accounting for 12% of global sales. Today this proportion is still expanding. We believe there are two fundamental reasons.
First of all, China’s strong manufacturing strength is obvious to all the world. Secondly, as the global e-commerce penetration rate gradually increases, China has particularly rich operational experience in the field of e-commerce.
According to the 2019 “Middle East E-commerce Report” jointly released by Google and Bain & Company, the current e-commerce penetration rate in developed countries around the world exceeds 10%, while that in developing countries Generally less than 5%. Among them, India, the Middle East and other regions are particularly low.
This naturally means opportunity – although the development is in the early stages, the growth rate is quite rapid. Since 2014, the average annual growth rate of e-commerce in the Middle East and North Africa has exceeded 25%. This is very similar to the Chinese market in the eyes of Europe and the United States 20 years ago.
A fashion company from China, ��It has a strong presence in the European and American markets, but the Chinese mass market is very unfamiliar with it. This in itself is a very interesting thing. The latest trend in this company is that Shein is expected to achieve an IPO in the second half of this year. So far, Shein has completed 4 rounds of financing, with investors including JAFCO Asia, IDG and Jinglin Capital, with total financing exceeding 300 million yuan. After receiving financing, Shein acquired a number of similar e-commerce companies, including Romwe.
Shein’s low profile is naturally related to its focus on the international market, but it is also inseparable from its internal corporate culture. The market knows very little about the founder Xu Yangtian, who graduated from Qingdao University of Technology majoring in foreign trade. Making a fortune in silence may be a virtue of Chinese companies.
A fashion company from China occupies a stronghold in the European and American markets, but the Chinese mass market is very unfamiliar with it. This in itself is a very interesting thing. The latest trend in this company is that Shein is expected to achieve an IPO in the second half of this year. So far, Shein has completed 4 rounds of financing, with investors including JAFCO Asia, IDG and Jinglin Capital, with total financing exceeding 300 million yuan. After receiving financing, Shein acquired a number of similar e-commerce companies, including Romwe.
Shein’s low profile is naturally related to its focus on the international market, but it is also inseparable from its internal corporate culture. The market knows very little about the founder Xu Yangtian, who graduated from Qingdao University of Technology majoring in foreign trade. Making a fortune in silence may be a virtue of Chinese companies.
However, although Shein rarely explains its company strategy to the outside world, Shein’s success model is also very clear.
First of all, Shein chose the international market. From the beginning, it bypassed the domestic fashion market and Taobao. This is obviously not an easy decision. After all, China is a market that is too big to give up.
However, from another perspective, no matter how big the domestic fashion brand is, it still has to compete head-on with Taobao, China’s largest e-commerce platform. The past ten years in China’s fashion market have been a decade in which clothing brands have become “cannon fodder” for e-commerce. It has also been a decade in which international fast fashions such as ZARA, H&M, and Uniqlo have rapidly conquered the Chinese market.
Many Chinese fashion brands also try to become the “Chinese version of ZARA”, but there are many losers. Brand genes are hard to change, and Chinese fashion brands that have completed their primitive accumulation by expanding physical channels cannot grow fast. And local brands that stand at the end of the fashion trend information chain and rely on copying and revision for a long time cannot become fashionable. Creating a “Chinese version of ZARA” based on ZARA’s model may be a false proposition from beginning to end.
So when it comes to competing with Alibaba, going overseas has become a better shortcut, allowing Shein, which has digital and international genes, to achieve scale expansion in a shorter time, starting from the European and American markets and gradually deepening The Middle East and India are equally sizable incremental markets as China.
In addition, Shein, who is familiar with the ecology of international social media platforms, has also seized the early dividends of Internet celebrity KOL marketing in the European and American markets over the past few years, and cooperated with Internet celebrity KOLs on Facebook, Instagram, Twitter and other platforms. Bring goods.
This is also equivalent to getting a ticket to the era of fast fashion e-commerce. Whether it is Revolve, an Internet celebrity e-commerce company listed in the United States, or emerging “super-fast fashion” platforms such as Fashion Nova, Boohoo, and Missguided, they will Internet celebrity KOL marketing is regarded as a key link.
▲SheIn, who is familiar with the ecology of overseas social media platforms, has also seized the early dividends of Internet celebrity KOL marketing in the European and American markets over the past few years
China’s supply chain advantage is the key
In the early days, Shein also sold factory tail goods, and then began to build the platform’s own flexible supply chain to allow suppliers to Chain capabilities have become the core competitiveness. Currently, Shein’s supply chain is focused on Guangzhou, which is both a clothing manufacturing center and an international port. The platform also has warehouses in key countries.
According to official disclosures, Shein’s new products only take just 2 weeks from design to finished product, all completed locally, and the products can be shipped to major markets within 1 week. It can develop more than 10,000 SKUs by the end of the year.
Compared with the cycle of traditional fast fashion products such as Zara, which are designed in Europe, manufactured in Southeast Asia and China, sent back to the headquarters for warehousing and then shipped uniformly, Shein’s efficiency has an incomparable and significant advantage.
This means that Shein also belongs to the category of “super fast fashion”. Judging from the website page, Shein is similar to “super-fast fashion” platforms such as Fashion Nova and Boohoo, which are mainly driven by low prices, discounts and rapid new releases. However, the fashion of Shein’s products is slightly inferior in comparison, or it may focus on The mass market is also more adapted to the needs of the Middle East and Indian markets.
In fact, “Ultra-Fashion” (Ultra-Fashion) has been challenging the traditional fashion industry for some time. Since 2017, we have continued to report on this emerging e-commerce platform, which is more efficient than traditional fast fashion and is good at social media operations.
This marks the attack of ultra-fast fashion. It is trying to use digital means it is good at to transform the traditional fashion industry, move from the edge to the center, and further seize the right to speak in the industry. Its future is immeasurable. Among the many ultra-fast fashion platforms, Shein has the opportunity to stand out. Of course, in an increasingly complex global environment, the external risks faced by overseas brands are a huge uncertainty.
Some brands want to “become China’s ZARA”, while other brands aim to “kill ZARA”. Vision determines height.
The fashion industry is moving from the edge to the center, further seizing the right to speak in the industry, and its future is immeasurable. Among the many ultra-fast fashion platforms, Shein has the opportunity to stand out. Of course, in an increasingly complex global environment, the external risks faced by overseas brands are a huge uncertainty.
Some brands want to “become China’s ZARA”, while other brands aim to “kill ZARA”. Vision determines height. </p
