Shein is an international B2C clothing brand of fast fashion. It has been named as the most google searched brand of 2022. China’s Shein is a 15 billion dollars company. It is one of the most visited fashion e-commerce sites in the world, surpassing brands like Zara and Nike.
The company offers both men’s and women’s clothing. Besides clothing, Shein offers bags, shoes and accessories.
The company targets consumers in North America, Europe, Middle East, Asia and other nations. The way Shein approached the young guns has a lot to teach.
How Shein was founded and who founded it?
The Chief Executive Officer (CEO) of Shein is Chris Xu (formerly YangTian Xu). Chris used to work at Nanjing Aodao’s ‘online foreign trade marketing department’ before founding Shein.
Chris always dreamt of starting up his own business, and Shein clothing was his opportunity. To begin with, he was involved in developing Shein’s website. In time, Chris began to handle sales, revenue, and marketing at Shein and moved away from the technical side. It is Chris Xu’s vision and leadership that makes it stand out amongst e-commerce giants today.
As part of Chris’s strategy to popularize and intensify Shein’s reach, he set up a fashion blogger program, a free trial center, and a bonus points program. Despite high competition, he was able to create deals that appealed to buyers quickly.
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Further, Chris Xu conjured up an exciting product catalog by recruiting designers from around the globe. Meanwhile, Shein Clothing had teamed up with upcoming designers to provide design ideas and drafts for the store. The designers were given a 30% commission from the sale of the design and a long-term collaboration contract if their designs were chosen.
At Shein, these business models are referred to as C2B business models, where design professionals become members of Shein’s community. These are then known as ‘Sheinside designers’.
The business model relies on internet-based sales that include both mobile and desktop storefronts. Since the company does not have to pay for maintaining and running a physical storefront, using an eCommerce business model helps the company to reduce costs.
For cost-saving reasons, Shein outsources some of its production. Despite this, it keeps a close eye on all of its partners’ operations to make sure they meet the standards set by the brand.
How does Shein make money?
Shein is a major online retailer that serves online customers across the globe, creating primary net sales mainly in the United States as well as in France and Italy. Shein Clothing currently has its largest market in the United States. The company also distributes its products in 219 countries, including Europe, India, the Middle East, and Australia.
In terms of item range, Shein’s online fashion collection generates the largest sales volume. From each sale, the company earns a profit margin.
The Marketing Strategy of Shein
The eCommerce company Shein has developed some of its strategies to work all over the globe, and its success is no surprise. Take a look at some global Shein marketing strategies that proved effective globally.
- Body Positivity
The brand has dedicated sections for plus-sized clothes, and it embraces body positivity. This company specializes in women’s garments and has been celebrating plus-size models, something that very few other companies have done so far.
- Shein Haul
On YouTube & Instagram, look up “Shein haul” to see how many on-trend clothes influencers have been able to buy for a few hundred pounds from the store. Some of these videos have reached upwards of 3 million views.
- Social Proof
Shopping at Shein builds trust and increases conversion rates by revealing sales feedback from recent purchases. On the product page, you may see a “free trial report” as an example.
- Micro-Influencer marketing
Using influencer messages as product marketing techniques is a unique idea in Shein’s Marketing Strategy. In contrast to most companies that use celebrity endorsem*nts to market their products, Shein relies on influencers to market its services.
The controversy surrounding Shein Clothing
- Shein being a Fast Fashion brand
Shein produces clothing for cheap, mass production that is based on celebrity fashion trends. Most of the clothes cannot be worn more than a few times before they decay. A large percentage of global pollution comes from fast fashion.
Aside from the pollution caused by the means of production, the nature of fast fashion clothes, which are meant to be thrown away after only a season of wearing them, creates a lot of unnecessary waste.
- Exploitation of Labour
Shein allegedly engages in unethical practices such as child labor, which is particularly concerning given rumors that the company lacks transparency about its production chain.
Although Shein vehemently denies it, child labor laws vary widely among countries where garment factories are located. Bangladesh, for example, allows children as young as 14 to work, so Shein could legitimately employ teenagers while still claiming that it opposes child labor.
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Hurting Religious sentiment
The company was criticized for selling Greek carpets branded as Greek fringe mats or tassel trim on its website in July 2020. Activist Nabela Noor, a Muslim fashion influencer and activist for inclusivity, exposed the issue on Twitter. In response, Shein promptly took down the rug from its site and apologized, calling it “a serious mistake.”
The company was also criticized in 2020 for selling a Nazi swastika necklace for £2. They quickly removed it from the website after backlash
- Theft of clothing designs and patterns
Shein has repeatedly been accused of stealing designs from small designers. Influencer Felicity Hayward accused Shein of copying the t-shirt she sold under her brand Self Love Brings Beauty in 2017
Shein was also accused of stealing a garment pattern from an independent designer in August 2020.
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As an expert in e-commerce, online retail, and business strategy, I can provide valuable insights into the various concepts used in the article about Shein, the international B2C clothing brand. My extensive knowledge in this field allows me to delve into the details and provide a comprehensive understanding of the topics discussed.
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Shein's Background and Founder:
- Shein is a prominent international B2C fast-fashion clothing brand.
- It was named the most Google-searched brand of 2022.
- The company is valued at $15 billion, making it a significant player in the fashion industry.
- Founded by Chris Xu (formerly YangTian Xu), who had prior experience in Nanjing Aodao’s online foreign trade marketing department.
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Shein's Global Presence:
- Shein is one of the most visited fashion e-commerce sites globally, surpassing competitors like Zara and Nike.
- Targets consumers in North America, Europe, Middle East, Asia, and other nations.
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Chris Xu's Vision and Leadership:
- Chris Xu played a crucial role in Shein's success, starting from website development to handling sales, revenue, and marketing.
- Introduced innovative strategies such as a fashion blogger program, free trial center, and bonus points program.
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C2B Business Models and Designers Collaboration:
- Shein adopts a C2B (Consumer-to-Business) business model, involving design professionals as members of Shein’s community.
- Designers, known as 'Sheinside designers,' collaborate with Shein, earning a commission and long-term contracts for chosen designs.
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E-commerce Business Model:
- Shein relies on internet-based sales through both mobile and desktop storefronts.
- The absence of physical storefronts helps reduce costs, a key advantage of their e-commerce business model.
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Production and Cost Management:
- Shein outsources some of its production to save costs.
- The company closely monitors partners' operations to ensure they meet brand standards.
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Revenue Generation:
- Shein is a major online retailer generating primary net sales in the United States, France, and Italy.
- The company distributes products in 219 countries, with the largest market in the United States.
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Marketing Strategies:
- Shein's global marketing strategies include a focus on body positivity, Shein Hauls on social media platforms, social proof, and micro-influencer marketing.
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Controversies Surrounding Shein:
- Fast Fashion: Shein is criticized for contributing to global pollution through mass production of disposable clothing.
- Exploitation of Labor: Allegations of unethical labor practices, including child labor, with concerns about transparency in the production chain.
- Hurting Religious Sentiment: Criticized for selling items like Greek carpets misbranded as other products, and selling a Nazi swastika necklace.
- Theft of Designs: Accusations of stealing designs from small designers, raising concerns about intellectual property infringement.
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Shein's Business Model for Inspiration:
- The article introduces the idea of creating a Shein clone, highlighting Shein's journey as an inspiration for entrepreneurs. The Yelo marketplace builder is suggested as a tool for creating a custom online marketplace.
In conclusion, Shein's success is a result of strategic business decisions, innovative marketing, and a global reach. However, it is important to acknowledge and address the controversies surrounding the brand, including environmental concerns and ethical considerations.
