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SheIn has grown from humble beginnings as an e-commerce website to one of the world’s most successful online empires.
This company has become so popular that it has over 200 million monthly users and over 13 million followers on Instagram alone.
Immediately, you might think that this success is because it sells fashionable clothing at affordable prices.
However, even with such accomplished competition in the virtual shopping world, SheIn still stands tall as a leading e-commerce company in its niche markets. How did they do it? By combining their love of fashion with strategic marketing tactics and innovative business practices.
Read on to learn more about how SheIn achieved such impressive results.
What is Shein?
Shein is a fast fashion brand based in Nanjing, China. Founded in 2008, the company sells mainly women’s apparel for all occasions and in almost every size. In addition to clothes, there are sections for kids and men and a section called Home Life.
The company is owned by Chris Xu, a Chinese American graduate of Washington University in St. Louis. He founded the company while working at his father’s company, Zhenxiang International Group, where he worked as vice president of operations. While at Zhenxiang, he learned how to manage logistics and supply chain management.
In 2010, he left Zhenxiang and launched Shein. His initial idea was to sell low-cost, high-quality goods to consumers in Asia. After launching, shein.com began to grow rapidly. By 2012, the site had grown to 10 million visitors per month.
By 2013, the company grew to 20 employees and moved into larger offices. At the same time, Shein expanded internationally, opening up distribution centers in Singapore and Hong Kong. Today, it operates warehouses in over 40 countries around the world.
What is Shein’s mission statement?
The mission statement is “to provide customers with affordable luxury.” It means they want their products to be accessible to everyone, regardless of income level. They believe that people should be able to buy clothing that fits them perfectly without having to spend thousands of dollars. Their goal is to make clothing so cheap that you would never think twice about buying it again.
What is the secret to Shein’s success?
The company’s success lies in its quick response to consumer demand. To do this, Shein uses a combination of artificial intelligence, big data analysis, and human expertise.
The brand in America is doing something very different from its fast-fashion counterparts. By applying the real-time fashion model to its western gen-Z customer base, it has become one of China’s most successful online retailers. In fact, according to Google Trends, US-based netizen searches for “Shein clothing” are almost three times greater than those for international brands such as Zara and H& M.
Its business model is based on rapidly responding to fashion trends and creating high-quality merchandise.
To achieve this, Shein’s designers use data analytics to predict future trends and designs and apply them to existing stock. They also employ a full-time research team to collect information about current and upcoming trends.
Shein is one of the first companies in the world to have an AI-powered design system that can create new products on its own. For example, when a client asks for a specific product, Shein will analyze what other items in the client’s wardrobe share similar characteristics. If no suitable alternatives are available, Shein will ask its AI-powered design system to create a new item.
I wrote another post on how AI will change the retail business; you can read it here.
How did Shein transform its business model to become successful?
Shein changed their business model by focusing more on retail sales than wholesale sales. They also changed their target market from middle-aged women to teens and young adults. Finally, they changed their marketing strategy by emphasizing the “cool” factor over the “sexy.”
They invested heavily in social media campaigns. Shein now has over 250 million followers across Facebook, Instagram, WeChat, and Twitter.
In other words, the key to Shein’s success was its ability to understand the market and adapt accordingly.
Shein started out selling only women’s apparel. However, they soon realized that men were interested in buying clothes too.
So, they began to sell men’s wear. After realizing that young people wanted to buy trendy products, they launched their eCommerce site for teens and young adults.
Then, after noticing that customers liked to shop at night, they added nightwear to their collection. And so on.
These efforts paid off. Today, Shein is the largest youth fashion retailer in China, and its sales increased by 300% last year alone.
As of February 2020, there are about 50 million active customers; by comparison, H&M has about 60 million active customers.
But some people believe that rapid growth is unsustainable.
“The problem with fast fashion is the fact it’s not sustainable,” said Sarah-Jane Corbett, a professor in the business school at University College London who studies fast fashion companies. “It’s all about profit margins.”
How does Shein work with its suppliers?
Shein works closely with its suppliers to ensure that all orders are fulfilled within 24 hours. Once an order is placed, Shein sends the supplier a list of requirements, and the supplier then creates a prototype using 3D printing or digital manufacturing techniques.
The final product is then returned to Shein, which is tested by quality assurance personnel before being shipped out.
How does Shein use 3D printing to fulfill orders?
Shein uses 3D Printing to create prototypes and products. It allows them to test their designs before production. They also save money because they don’t have to pay for expensive materials like plastic.
How did Shein use their real-time fashion model to predict the next trend?
Shein used their real-time fashion models to predict what would happen soon.
They could do so because they had analyzed historical data from previous years and predicted which trends would occur in the coming year.
It allowed them to predict what consumers might want before they knew it themselves.
The real-time fashion model helped Shein to understand how people wanted to wear clothing.
It gave them insight into what types of clothes people liked and disliked.
In addition, it enabled them to see if any trends were emerging. For example, when they saw that women preferred short skirts, they made shorter skirts available. When they noticed that men preferred long pants, they made longer ones available.
How does Shein’s business model differ from Western fast-fashion brands?
When a customer asks for a particular item, the company searches online stores and warehouses across the country to find out where the item is sold. If the item isn’t sold anywhere else, the company produces it.
Shein’s business model differs significantly from Western fast-fashion retailers such as Zara and H&M.
Western fast-fashion retailers usually sell their own branded merchandise, while Shein sells third-party products.
Western fast-fashion retailers often use complex supply chains to reduce costs.
On the contrary, Shein relies solely on its logistics system, uses only local suppliers, and doesn’t participate in any e-commerce platform.
Shein can offer cheaper products because it buys them directly from manufacturers and resells them at lower prices.
It allows the company to cut out intermediaries and pass savings onto consumers.
However, this strategy comes with risks.
Shein is vulnerable to counterfeits. To prevent this risk, the company has introduced several measures.
First, it requires all its employees to wear uniforms when they work. Second, it takes pictures of all its products before it ships them. Finally, it sends inspectors to factories to ensure that the products are authentic.
How did Shein’s marketing strategy work?
Shein’s marketing strategy consists of two main components: branding and customization.
Branding is the process of developing a strong identity for a business. It involves designing a logo, choosing colors, and deciding what typeface to use.
Customization refers to the ability to adapt your brand to suit the needs of specific audiences. The most effective way to achieve these goals is through social media. Social media allows businesses to connect with potential customers and share information about themselves.
Shein’s marketing strategy was very effective because they targeted their audience well.
First, they focused on what their target market wanted.
It meant they knew whom they were trying to attract and how they could reach them.
Next, they developed a plan that would help them achieve their goals. Finally, they implemented this plan.
Targeting Gen Z consumers
Shein’s target audience is price-focused shoppers who love online shopping from around the globe.
They tend to shop on mobile devices and prefer buying products online rather than in stores.
Their typical purchases include fashion items such as clothing and accessories, household goods like cleaning supplies and kitchen utensils, beauty products, and toys and games.
The most common purchases on the site come from:• Gen Z consumers, mostly female• Parents of children aged 1–15•
Since Gen Z is Shein’s key target customer group, the e-commerce retailer wants to ensure that it is desirable, unique, and sociably acceptable among young people.
This demographic represents a significant portion of the potential global market but demands new strategies.
Shein’s presence on Tiktok
Shein is the #1 Brand on TikTok. It is the fastest-growing social media app in the world. With over 200 million active monthly users and over one billion views daily, TikTok has become the number one place where people go to express themselves creatively.
In addition to being fun and entertaining, TikTok offers brands like Shein a unique opportunity to reach consumers directly.
Shein’s marketing strategy on YouTube
In 2018, the brand launched a YouTube channel where influencer customers upload videos showcasing their shopping experiences. These videos are called “haul videos.”
They allow consumers to see what they bought, how much it cost, and even film themselves unboxing their purchases.
This way, the shopper feels like she is part of a video game and gets to play around with her wardrobe.
The brand is aware of the risks associated with this type of marketing strategy.
On the one hand, there is a danger of being flooded with low-quality content. But on the other hand, the brand believes the risk is worth taking because it creates a unique customer experience. Besides, the brand wants to give its customers the chance to become YouTube stars.
Shein’s influencer marketing strategy
The Chinese e-commerce giant Shein is no stranger to influencers. Its founder, David Li, has been working with bloggers since 2012. He wants to ensure his products are seen by as many consumers as possible, especially those living in China. So he turned to social media influencers to help spread the word about Shein. In January 2018, Shein launched its Influencer Marketing Program. Influencers promote Shein products on their blogs and social media platforms, and they can even collaborate with Shein to develop unique campaigns. To date, over 120 influencers have joined the program. And according to Li, it’s already paying off.
How influencers earn money from Shein:
Influencer marketing is leveraging influential people on social media platforms such as Instagram, Twitter, and Facebook, to generate brand awareness, increase sales, and build customer relationships. Influencers are usually celebrities, bloggers, vloggers, and YouTubers; Shein partners with popular influencers to promote their products. When someone clicks on one of the sponsored posts, it goes to the influencer’s profile, where it gets shared among their followers. If followers like the product, they share it again, thus creating viral traffic. This process continues till the customer makes a purchase. The influencers receive commissions based on the number of times a product is bought and the price per sale. For example, if a shopper buys five pairs of shoes worth $100 each, the influencer receives a $250 commission.
Shein’s secret to success: Understanding the psychology of a new generation
Shein’s successful marketing strategy illustrates how a retailer should understand the psychology of a new-age shopper. By creating a unique image, the company has been able to attract young people and win over older shoppers.