Chinese e-commerce giant Shein has become a $15 billion company. Here's how it gets consumers to keep spending. (2024)

How Shein gets consumers to keep spending on fast fashion

Narrator: Shein sells clothes for as little as $3 but reportedly generates an estimated $10 billion in revenue annually. Since it was founded in 2008, the Chinese e-commerce giant has grown to be worth an estimated $15 billion. From celebrity partnerships to dirt-cheap prices, here are all the sneaky ways Shein gets you to spend money.

On Shein's website, you can buy trendy clothing for as little as $3. You can find shoes for $7, and some accessories will only set you back a single dollar. You can often find dupes of popular styles from more expensive brands, too. This trendy House of Sunny knit dress is about $138, but Shein offers its own version for just $16. Shein's price point is also significantly lower than other popular fast-fashion brands, like Zara or even Forever 21. For example, this satin dress costs $40 at Zara, while a similar design from Shein only costs $10.

These shockingly low prices allow shoppers to feel like they're getting a great deal, which can be gratifying and encourage them to purchase more items. Shein can offer such low prices because it's exclusively an online retailer, so it has fewer overhead costs. It can quickly capitalize on trends without worrying as much about inventory.

Shein can also do this because it controls its own supply chain. This is how the fast-fashion giant constantly adds new styles to its website. Fast-fashion companies like Zara used to make headlines for adding hundreds of new styles every few weeks. Now, Shein reportedly adds 2,000 new styles a day. This is already tempting to the average shopper, but even more so to content creators who order from Shein in bulk to film haul videos. These videos often bring in millions of views. And the more items you can unbox in a video, the more impressive it is. So Shein's seemingly endless style selections and low prices have made it a go-to retailer for anyone filming hauls, which can also bring in new customers.

Shein is also popular with content creators because anyone can sign up with its affiliate program to earn commission. By allowing anyone to be an affiliate, Shein continues to grow and retain its customer base. Anyone who signs up to be an affiliate will likely continue shopping with Shein, all while giving the company free publicity to try to earn commission.

Shein also does paid partnerships with influencers and celebrities like Addison Rae and Madelaine Petsch as well as sponsored posts with influencers who have smaller followings. These partnerships help Shein reach new customers and help build the brand into one people gravitate towards as they see celebrities and influencers they like post about wearing it.

Whichever way Shein manages to get your attention, its reward system is designed to keep you buying from it. The Shein VIP system is split into three tiers, S1, S2, and S3, and it's relatively easy to move up to the highest tier. You become S1 by placing one order or spending 1 cent, S2 by placing two orders or spending $90, and to hit S3, you just need to place five orders or spend $300. The top tier has benefits like speedy refunds and exclusive promotions. You also earn Shein points with every purchase and extra points for leaving reviews. The points can be redeemed as discounts on future orders.

All of this ultimately creates a cycle of constant buying, which makes Shein all those billions of dollars.