Shein is now a very valuable fashion company! It has recorded 7 years of 100%+ sales growth, and is now large-enough to be compared to Zara & H&M (with much faster growth). It might not survive (this will depend on their brand evolution), but it is an interesting story.
Shein is a phenomenal growth story. Its (ultra-fast) growth reiterates important lessons on innovation. It also stresses the evolution of new business models and processes.
What is Shein?
Shein is a fast and large (e-retailer?) of fashion & accessories. It sources from a huge network of low-cost suppliers and is very efficient. With excellent prediction systems, Shein starts with small orders, and tests many different product SKUs. It relies heavily on social media and influencers (micro), for marketing as well as for production, and is excellent at taking advantage of trends. Has frequent flash sales and promotions.
(pronounced She-in , not Shine)
Fast (and noisy) Success
Shein has been sued by Levi Strauss, Ralf Lauren, AirWair (Dr Martens)… probably not because Shein is insignificant. To be described as ‘beating Amazon’ is no simple feat.
Read more about Shein in on the of the sources listed below.
To me, Shein’s approach seems rough & dirty, open, diverse, and a great example of using survival of the fittest strategies to evolve winners!
Innovation Lessons from Shein:
Shein’s story is great. It offers many lessons on innovation strategy, and :
- Success and profitability for companies were primarily about production and products. This was the past. Now success is mostly about #brands & #systems (IT infrastructure)…
- Technology will keep on ‘hollowing-out’ industries (and cutting ‘middle men’). Less cash and assets are needed to succeed, but better systems. Think: can your business be replaced by a database and a front-end interface?
- Open platforms are here to stay: Businesses that can openly source from many suppliers will be able to attain higher levels of quality and speed, and this will drive more specialization and competence into the value chain.
- Let the market decide: Companies that produce different alternatives (a portfolio of options), then invest into what the market chooses will have a significant advantage.
- Speed is more important than ever. All forms of speed like trends, fads, viral videos, and even fulfillment, will be contributors to success… Businesses that can encode speed into their DNA will increase the likelihood of a positive black swan.
- Gamified and Social are trends that will keep driving retail and e-commerce. Shopping is evolving more into a (quasi) socially visible experience with its own thrills and emotions.
- Ecosystems and clusters are the major force. Isn’t Shein’s path easier than Zara’s, with the thousands of low-cost factories around it?
References:
- https://www.thefashionlaw.com/from-dr-martens-to-ralph-lauren-lawsuits-are-starting-to-build-up-against-15-billion-ultra-fast-fashion-brand-shein/
- https://www.vox.com/the-goods/22573682/shein-future-of-fast-fashion-explained
- https://restofworld.org/2021/how-shein-beat-amazon-and-reinvented-fast-fashion/
- https://www.cnn.com/2021/08/14/business/shein-china-fast-fashion-intl-hnk/index.html
- https://www.firmknow.com/shein-rise-chinas-most-mysterious-multibillion-dollar-company/
- https://daxueconsulting.com/shein-market-strategy/