Shein: Fashion’s Rocket Ride to a $100B Valuation Topping Zara and H&M
Wealth2 Minutes Read

Shein: Fashion’s Rocket Ride to a $100B Valuation Topping Zara and H&M

April 9, 2024 Share

Shein is more than just a nice fast-fashion brand, it’s a business model that is worth learning about.

Shein, the Chinese fast-fashion retailer’s market value has surpassed that of H&M and Zara combined, valuing 100 Billion US Dollars. There are only about 1,000 “unicorns” (private companies valued at $1 billion or more) in the world, and very few of them are in the fashion or leisure sector. The idea of a privately held fashion company valued at more than $100 billion was unthinkable prior to the rise of Shein.

Image Courtesy of Eamonn M. McCormack

You Must Have Heard About Shein, But in Case You Haven’t

Since its founding in 2008, Shein has become well-known for its reasonably priced apparel and leisure items, with over 2,000 new styles added every day. It releases clothes in small batches using an on-demand strategy, increasing production solely for highly sought-after products. Shein transformed the creation of small batches of clothing by using computational demand forecasting methods to produce only 50 to 100 pieces of each style, catering to certain markets. It also addressed the issue of economy of scale by working with multiple small Chinese apparel producers. the brand offers the majority of its clothing at costs between $8 and $30, outpacing Zara’s weekly releases. It also releases an average of 1,000 new products every day.

It overtook Amazon as the most downloaded shopping app in the US the year before. It surpassed well-known brands like H&M, Zara, and Forever 21 to become the biggest fast fashion retailer in the US based on sales in June, according to Earnest Research.

How Shein Does It?

The brand further reduces costs by making use of customs laws. The United States increased the de minimis value threshold in 2016, allowing tax-free imports of items up to $800. This move was made to support small American businesses, but it ended up benefiting international e-commerce sites such as Shein. This change speeds up border clearance procedures and permits more admissions into the United States without duty, which helps their exports.

Accusations 

Shein has been accused of stealing designs. Last year, designer Mariama Diallo accused Shein of stealing ideas for her Sincerely Ria apparel line on Twitter. Artists have also complained that the corporation is using their designs without permission. Oil painter Vanessa Bowman recently informed the Guardian that one of her pieces was uninvitedly used on a Shein t-shirt.

Challenges

Shein received a “very poor” sustainability grade from Good On You, drawing criticism for its opaque supply chain and potential environmental impact. In addition, over 1,100 complaints have been filed with the Better Business Bureau by customers who are unhappy with Shein’s clothing’s poor quality.

Best Selling Items of Shein

Thinner Fleece Tights

This isn’t your average big, gaudy fleece tight. They resemble a cross between colored tights and heated pants. 

Image Courtesy of Shein

Premium Active Tank from Glowmode

For this item, bras are not necessary since the bra pads are integrated! There are six sizes and nine colors!

Image Courtesy of Shein

Hot Mom Jeans

Mom jeans are a must for any girl! They’re so comfortable, and you can dress them down with shoes or with a cropped blazer and heels.

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