The secretive Chinese upstart ‘making fast fashion look slow’

“It kind of becomes a habit,” said the 20-year-old Hong Kong University student. “Before sleeping, I’m just like, ‘Okay, check in.'”The platform Sachan is using belongs to a Chinese brand called Shein — pronounced “She In” — which has rapidly attracted a global army of teen fans on TikTok.The company is a mysterious online shopping upstart that has made headlines recently for surpassing Amazon (AMZN) in app downloads in the United States, and creating a cult following for its fast fashion apparel sold all over the world. Some experts even say it’s beating stalwarts like Zara and H&M at their own game, by making items more quickly and being more digitally savvy with customers.”They’re making fast fashion look slow,” said Erin Schmidt, a senior analyst at Coresight Research, a global advisory and research firm specializing in retail and technology. “They’ve changed the model.”Fast forward to the pandemic, which has helped Shein generate explosive growth and become one of the few Chinese consumer brands to win global acclaim. As of last October, it was the world’s largest online-only fashion company, as measured by sales of goods under the company’s own brand, according to Euromonitor International. The research firm declined to provide further information, saying that the finding was part of a proprietary project.Shein competes with Zara and H&M for customers who want the latest trends for less, and all three companies sell their own branded goods. But the two longtime heavyweights also run brick-and-mortar stores, cater to a wider customer base and sell at slightly higher prices. Shein’s more direct competition comes from the likes of British fast fashion retailers Boohoo and ASOS, which concentrate most of their firepower online, target young female shoppers and tend to offer more affordable items.In the first half of this year alone, Shein’s app racked up more than 81 million downloads around the world. In mid-May, it overtook Amazon as the most installed shopping app in the United States across the App Store and Google Play combined, according to analytics firms App Annie and Sensor Tower. span{color:#C5C5C5;}
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Shein keeps users coming back to its app by rewarding them for virtually everything, from logging in each day to watching live-streams to entering outfit design contests. Credit: SHEIN
Amazon has regained its crown, although “daily installs between the two apps since then have largely remained close,” said Craig Chapple, a mobile insights strategist of Europe, the Middle East and Africa for Sensor Tower. In recent months, Shein “has really exploded onto the scene,” said Schmidt. “Everybody wants [to know] everything that they possibly can about Shein.”They may be disappointed. For all its success, the company is notoriously reclusive, with little known about its inner workings despite its stature as one of China’s most valuable privately-held businesses. As of last August, Shein had a valuation of $15 billion, according to PitchBook. By this summer, that had doubled to as much as $30 billion, with annual revenue reaching $10 billion, One of its key differentiators, however, is a concept that analysts are calling “real-time retail.”They say that Shein has come up with an in-house algorithm that trawls the web — including its own massive customer database — to find out what fashion items are trending on search, and what people are responding to on competitors’ websites.That data is then used by the design team to develop new items, according to experts. Even in the whirlwind of fast fashion, Shein is prolific: It In some ways, Shein’s rise could be compared to that of TikTok, according to Brennan, who authored the book “Attention Factory: The Story of TikTok and China’s ByteDance.””I see so many similarities,” he said, reflecting on how the short video app was regarded before it became a global sensation.”It was viewed as something that was just for Gen Z. It was sort of viewed as frivolous entertainment … I think the competitors were looking at it similarly, and not taking it as seriously as they should have. And I’m sure that platforms like YouTube and Instagram much regret that now.”— Anagha Subhash Nair contributed to this report.