The online retailer Shein is expanding its product offering “to meet growing demands for product variety” by extending its platform to third-party domestic and international retailers.
Shein has come under fire for its labour and environmental policies, with some claiming that the brand exploits supply-chain employees and worsens the negative environmental effects of the fashion industry.
This action is a part of Shein’s bigger plan to broaden its manufacturing outside of China and take advantage of the region’s swift economic development. According to a report from Marcelo Claure, a stockholder in the company and Shein’s regional chairman. The business has been able to follow the most recent fashion trends by using the “fast fashion” method, which involves developing and distributing new styles swiftly.
Chris Xu set up the brand in 2008, and it is based in Nanjing, China. It began as a modest company but has since expanded quickly to rank among the biggest online fashion merchants in the world.
Women’s clothing, men’s clothing, and children’s clothing are all available. In addition, they offer shoes, cosmetics, and accessories. The business updates its inventory with fresh designs on a regular basis, adhering to fast-fashion principles.
The brand is renowned for having affordable prices. They provide goods at inexpensive pricing, making fashion available to a variety of customers. The business accomplishes this by preserving effective supply chains, utilising economical production techniques, and implementing an online-only sales model.
Shein has successfully tapped into social media networks to market its name and goods. It works with bloggers, influencers, and content producers to promote its products and frequently uses user-generated content in the process. Shein’s marketing plan significantly contributed to its quick rise to fame.
Expansion and growth
As one of its manufacturing hubs outside of China, the fast fashion retailer is looking into the establishment of a facility in Mexico. The plant will make Shein products and is a part of the retailer’s initiative to localise production. For consumers in Latin America, this could result in faster shipment and lower distribution costs.
Shein’s localization strategy enables them to shorten client delivery times, broaden their product selection, and aid regional economies. He said that the brand is also looking into opportunities for “nearshoring,” which involves producing goods closer to the point of sale.
Apart from Mexico, Shein is investing $148 million in Brazil, the massive fast-fashion retailer has already built 100 factories in the area. Brazil is a desirable site for businesses trying to lessen their dependency on Chinese manufacturers because of its huge and skilled labour population and close proximity to the US. Additionally, the action raises concerns about how the company’s growth would affect nearby neighbourhoods and the environment. Deforestation and other environmental problems have been a problem in Brazil, and some people are concerned that the factory’s expanded production may make them worse. The rapid growth of industrial operations could strain the area’s resources and infrastructure, possibly having a negative effect on the towns where the factories are situated.
Retailers on tenterhooks
According to a Bloomberg Second Measure assessment from earlier this year, Shein’s market share of the American fast fashion industry would increase from 12% in January 2020 to 50% in November 2022. Shein currently has a larger market share than H&M (16%), Zara (13%), Fashion Nova (11%), Forever 21 (6%), and Asos (4%) combined. Shein’s marketplace will face competition from Walmart, Macy’s, Target, and Amazon.com for more than just customers. The platform for digital vendors will compete with sellers that have established businesses on other marketplaces. For the first three months, Shein won’t charge sellers a selling fee. After then, it costs 10% less than Amazon.com.
Shein is committed to giving customers the best shopping experience and supporting the communities where they operate, according to a statement from Sky Xu, the CEO of Shein. According to Xu, by bringing in new vendors to the Shein Marketplace that share their goal of democratising access to fashion, they are improving customer value and promoting the expansion of regional companies