The Rise of Shein - Strategy under the spotlight

Shein has become one of the world’s most successful fashion brands. The company is valued at $100 billion USD and their app has had more downloads than Amazon.

Founded recently in 2008, Shein is based in China and sells globally through its website.

They are known for being a notoriously secretive company that doesn’t disclose much to the media. So how they operate has not always been transparent but here is what we do know.

The Shein Business model

Shein moves fast to get a new design to market by producing very small runs of new articles of clothing. These limited editions are tested on the site to see if they sell. This lowers the risk of holding a large inventory of items that do not sell.

Once a piece of clothing is proven to be a top seller they can make orders in bulk to lower the price and make more profit.

Shein uses multiple factories based in China as opposed to owning and running the factories themselves. This may be so they can leverage negotiations against different factories, or hedge themselves against unforeseen circumstances.

Like most fast fashion brands their design inspiration is taken from trends and higher end fashion, but not without controversy. Big names such as Levis and Ralph Lauren have sued Shein for copyright infringements and smaller name boutique designers have been shocked when almost exact copies of their pieces have gone on sale.

Shein says that it takes Intellectual Property Rights seriously and in recent years has been quickly removing items that have complaints against them. Could this be a result of fast fashion putting pressure on its designers to work quicker or is it just a profit seeking fashion powerhouse seeing what it can get away with? We don’t know.

The Marketing Strategies

Their online shopping experience is nothing short of addictive, with thousands of products to scroll through the time spent on the app or website the average user spends outweighs that of most other clothing retailers.

Loyalty

Shein has a loyalty program that surpasses any other we have seen. Users can gain points for completing tasks,  such as logging into the App, leaving reviews, watching Shein Live broadcasts and making purchases. Every 100 points are the equivalent of $1 against your next purchase. Shein points expire quickly so it encourages return purchases and gamifies the shopping experience.

Influencers 

Shein runs various rewarding influencer programs. These have encouraged a lot of worldwide user generated content, particularly on TikTok and Youtube.

Pop up shops

To encourage brand awareness amongst retail shoppers Shein will run short term pop up shops in cities they wish to grow in.

Starting small

Shein started with a small target market of women aged approximately 18- 25 but as they have found success within this market, they have now branched out into men's clothing, children's clothing, middle aged woman's styles, homewares and cosmetics.

Easy Returns

One of the biggest barriers to purchasing clothing online is the fact you can not try them on and Shein overcomes this by having easy returns often within the country you live in (depending on your country). Although the returns are not completely free, the postage may be discounted depending on the option you take. 

Free shipping over…

Shein runs different offers on free shipping, depending on what type of sales they are running. Generally, you will have to purchase a certain amount to get the free shipping, so this encourages the shoppers to purchase more items.

Free gifts at checkout

Shein offers a free gift at checkout if you spend a little bit more. Again these offers vary but are a great way to encourage users to spend more.

Very low prices

Shein sells items as low as $1 and there is always a bargain to be found, these low prices and the combination of the above marketing strategies make it very hard for someone to only purchase one item. 

Diverse Models

Although Shein is based in China they use a range of models of different sizes and nationalities, so it appeals to a global market.

The future for Shein

In recent years there has been a big backlash against fast fashion.

The fashion industry is a big polluter and with climate change happening faster than ever this is a hot topic and is likely to become even more so in the future.

Quality can often be an issue with stores that have large inventories, multiple factories and low prices. Prices may be low but if articles of clothing are not able to be worn do they actually hold any value at all? Poor quality can cause bad reviews and social media posts. If these start to outweigh the positives the brand may land in hot water.

Shein’s continued success may depend entirely on public opinion. As long as they can make moves to continue to stay favourable they shall continue to grow.

Do you want to leverage some of Shein’s strategies for your business?

Get in touch and we can discuss what strategies may be right for your clothing brand.