Shein has taken the world by storm with jaw-droppingly lower prices and an apparently endless selection of fashionable clothing, and it now faces European lawmakers who want to stop the excesses of quick fashion.
Customers love the Chinese- founded firm’s massive catalogue of ultra- cheap items, from US$ 8 ( approximately RM37.80 ) sundresses to 48- cent ( RM2.30 ) bracelets, at a time when inflation has shrunk purchasing power around the world.
Shein has been accused of using businesses run by underpaid and overworked cloth manufacturers and of causing common harm to the environment, along with H&M and Zara.
The business is also accused of selling clothing that can be thrown away after a dozen uses by its rivals, as well as spreading hyperconsumerism.
But what sets Shein off, experts say, is a super- efficient supply chain and product development process.
” In principle, Bangladesh could possibly sell clothing for cheaper than Shein. But there’s no ecosystem it to promote it, to brand it, to sell it abroad, to deliver it”, Allison Malmsten, China market analyst at Beijing- based Daxue Consulting, said.
” China has all of these parts”.
According to experts, Shein relocated its corporate headquarters to Singapore between 2021 and 2022 to fend off growing international attention of Chinese businesses.
It also benefits from China’s exclusive combination of its extensive, low-cost textile manufacturing sector with advanced e-commerce technology and logistics networks.
Temu, an online retailer that regularly competes with Shein, acts more like a discounted marketplace for third-party home goods, tools, and gadgets, which is a result of that ecosystem.
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Really efficient
According to study by University of Delaware style expert Sheng Lu, Shein offered an astonishing 1.5 million unique clothing items for sale last year, far surpassing the pioneering Spanish fast-fashion brand Zara, which had 40, 000 styles.
While such a large variety usually comes with huge risk and production costs, Shein reported US$ 23bil ( RM109bil ) in revenue and US$ 800mil ( RM3.8bil ) in net profit in 2022, according to The Wall Street Journal.
Rui Ma, a leading expert on China business and author of the Tech Buzz China newsletter, said that Shein is the only company that can get away with this because of how efficient they are and how little waste is left in their warehouse.
” By testing and producing new materials in small initial batches of 100 to 200 products, we gather and analyze customer suggestions in real time, and refill only the items that our customers truly want”, Shein said in a statement, adding that this avoided” the pitfalls of wastage”.
More than 5, 000 third-party manufacturers, mainly in China, are responsible for supporting this on-demand strategy, which relies heavily on a strongly developed supply chain and local media reports that Shein is reportedly dominating whole districts of small workshops.
According to a 2021 Zhongtai Securities statement, the business evaluates manufacturers ‘ adaptability and ability to fulfill urgent directions, and it often eliminates the worst players.
It also tracks user searches and social media tendencies to create designs that are almost certainly going to sell, frequently appearing to be just copycat designs from various companies.
One of a number of Shein-related intellectual property disputes is a new lawsuit filed by Chinese retailer Uniqlo over an alleged knockoff bag design.
” You can imagine their style group more as information persons, and less as pattern people”, Malmsten said. ” They’re certainly sitting there with illustrations, they’re sitting there with computers and data”.
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‘Micro-influencers’
Shein, one of the biggest fast-fashion brands in the world, has recently come under fire for alleged labor abuse and its impact on the environment through its influence on waste and pollution.
Next week, the French parliament approved methods to lower the cost of fast fashion in France, particularly because of sustainability issues.
Shein claims its on-demand model prevents overproduction and “dramatically reduces waste” by conducting regular third-party audits to maintain good wages.
Even as it refutes these accusations, it has a large following of fans who praise it for making clothing available to those with limited costs, especially in plus-size styles.
Shein carefully selects small-time video blogs and social media users to reflect the brand in trade for free goods and money in order to create this diverse image.
Unlike luxury brands that use celebrity ambassadors, Shein has sought out “micro- influencers” in the form of “everyday people”, according to Malmsten.
The company uses the tactic to “bombard consumers, so everywhere that you look online you’ll see Shein products”, she said.
However, the strategy has occasionally backfired, with a strong backlash following a sponsored factory tour for a group of Western influencers last year for glossing over alleged labor violations.
Ma warned against giving Shein’s success too much credit on social media.
” It’s not like there were n’t plenty of companies trying to mimic Shein ( on social media )”, she said.
” The marketing aspect is the most ineffective and easiest to copy because it’s not their fundamental competitive advantage,” they say. – AFP