How did Shein become a fashion behemoth & a decacorn?
Shein is a Chinese fashion e-commerce startup that is currently the world’s 3rd largest startup with a valuation of $100 billion. It clocks in an annual revenue of $30 billion in 2022. Started in 2008 it is currently the world’s biggest fashion retailer even overtaking the likes of Zara and H&M.
How did it achieve such unprecedented success within such a short span?
Social media
Shein was started by Chris Xu in 2008 in China with a focus on wedding dresses before ditching it to shift to womenswear. The brand was originally known as SheInside but was later rebranded to Shein in 2015 as it was easier to pronounce and search online.
Social media has been the core to Shein’s success. They have over 26 million followers on Facebook & 29.9 million on Instagram. Their campaign Shein Hauls have been wildly successful globally where they collaborate with fashion influencers and models who unpack their Shein deliveries, try on clothes & share how they feel on camera which are often viral hits with over billions of views.
Low price
Shein offers a wide array of clothes at cheaper prices often averaging around $25 which is hugely appeals to the Gen-Z. Initally, India and Saudi Arabia were its biggest markets which now have been overtaken by
Galaxy of choices
Shein literally is the galaxy of choices for trendy clothes which gets the fashion conscious Gen-Z hooked up day in and day out. It produces over 2000 plus new designs every week which matches the daily trends.
Heavy reliance on AI
Shein has mastered the use of AI which helps it minimise losses and maximise gains. Although it produces 2000 plus new designs weekly it doesn’t mass manufacture every single design at one go. It initially orders a small quantity of each design which is fewer than 100 items per design.
It then uses real-time information to see how well each item performs, and rapidly orders more if a particular design proves popular, while discontinuing items that are not selling.
Global ambition
Shein has not limited itself to its national borders unlike many other startups. They had a grand and bold vision of capturing the entire world and that courage has paid. Today it sells in more than 150 countries with the US its largest market – accounting for between 35 and 40% of sales, according to The Economist – followed by Europe.
In the UK alone, it is estimated to sell 30,000 items a day – more than 10 million a year – and spends more on advertising here than any other fashion retailer.
With a combination of these strategies Shein became the world’s biggest fashion startup and a decacorn ($100 bn) within 14 years even overtaking Zara and H&M who were the pioneers of this industry.
