China’s strategy to dominate -also- the retail and fashion industry [Shein case]
Shein is one of the most representative Chinese retail companies in the world, its growth has been relatively rapid and the level of success achieved is worthy of study.
It has also become a favorite of Generation Z due mostly to its low prices and intense but effective handling of social platforms.
According to a report from HypeAuditor, Shein was the most talked about brand on YouTube and TikTok last year:
The growth of platforms such as TikTok worldwide, simultaneously boosts brands that have made intensive use of it for their promotion.
Today Shine ships to virtually every country in the world, but how did it get here?
The rise of a retail giant
In 2008 the SheInside platform was created (in 2015 it changed its name to Shein), at the hands of a character named Cris Xu, it may not be his real name, it may not even exist; it is inferred from him that he would be an American born in China.
It is difficult to trace with such a fragile base, even the trademark is not registered in the name of one person but of a group called ZoeTop Business Co. based in Hong Kong.
And to make the tangle bigger, ZoeTop is linked to Shein Group Ltd. which would be responsible for the brand’s mobile applications.
There is a second theory that links the company with the Chinese businessman Yang Jianxin with extensive experience in Asian e-commerce, although that is still a theory.
Whoever the creator is, the use of intensive positioning strategies is undeniable, highlighting among them:
So cheap price with which it is very difficult to compete.
Huge amounts of product.
Fast inventory refill.
Attractive return policy.
Impressive investment in social networks.
Shein’s weak points
Of course, you can’t get that high without making some sacrifices.
Shein’s page on Trustpilot has mixed opinions, among the most frequent complaints are high product delivery times, the sizes and / or colors that arrive are not always as requested, the images do not reflect the real quality of the garments and An investigation by Trustpilot itself found that many of the positive reviews of Shein on the platform had been written by the employees themselves.
He has also been singled out for selling «the same clothes from Zara but cheaper», in addition to making launch garments of big brands available to his buyers with lapses of just one week between one and the other.
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Ethical? Not at all Cash? Of course. And the consumer recognizes it through purchases.
To be fair, Shein is not the only company that does it; Zara itself has been involved in the past in cases of possible plagiarism of designs by independent artists.
The power of consumer communication
Shein has collaborated with artist of international stature such as Katy Perry or Nick Jonas, even so it is not a brand that bets on high prices or exclusivity, in fact its proposal from the beginning has been to reach the average consumer, in particular to Generation Z.
It is precisely the latter that generate interaction on social networks by sharing their outfits and encouraging their circle of family, friends or acquaintances to know or use the brand’s products.
Inditex was the conglomerate that in the 1990s introduced fashion as a profitable business, this by proposing style changes every few weeks and not every season as was customary; Shein has taken it further by releasing an average of 1,000 new styles daily.
One of the strongest points of the company is the real-time consumer analysis, in which the company is constantly analyzing data and using that knowledge to create new designs.
Sure, not all designs are successful, Shein manages to minimize the potential impact of failed products by placing small orders from factories, sometimes for only 100 pieces. If the design is successful, production is increased, if it is not, production is simply migrated to other models.
Has any design gone viral on a social network? Shein reacts quickly and increases production in line with market demand.
from the fact of not working with large factories, but with small and medium ones, which lift Shein orders on a daily basis.
And a strategy that seems like the cherry on the cake, Shein makes shipments directly to consumers, these packages usually have a low commercial value, this allows the brand not to have to pay import or export taxes in some countries.
This is unthinkable for large brands, which must pay yes or yes, since they do not sell directly to the consumer but to stores that act as intermediaries, of course, in large quantities.
This and more has made Shine one of the most powerful companies in the world in the retail industry. Anything to add?