SHEIN: Named Alongside Nike, Becomes the Darling of American Youth

【亿邦原创】SHEIN在全球范围内的影响力仍在不断攀升。

A landmark event of 2022 is that SHEIN, with an annual download volume of 2.29 billion, has become the most downloaded global shopping app, even surpassing Amazon to reach the top, showing unstoppable momentum.

Recently, according to Piper Sandler's latest research for the fall of 2023, SHEIN has achieved second place in the list of the most popular shopping websites among American youth and fourth place in the list of the most popular clothing brands among American youth, alongside Nike, in both rankings.

It is worth noting that SHEIN has been on the list multiple times. Since 2020, SHEIN has been consistently listed for multiple years, with its ranking and percentage of votes continuously climbing. By 2022, SHEIN, alongside H&M, became the most popular clothing brand among American youth, and its website ranking surpassed that of all major clothing brands in the United States.

SHEIN's ranking and penetration on Piper Sandler's list have been steadily increasing in recent years. The latest fall 2023 data shows that SHEIN's ranking and penetration in the most popular shopping websites and clothing brands among American youth are still advancing.

When decoding SHEIN's successful model, one always mentions its advantage of a "flexible supply chain"—this Internet-thinking approach has propelled SHEIN's growth momentum.

Other than that, what else has SHEIN done right and what factors have driven SHEIN to build such a large user network, especially in the crowded European and American markets that are home to many major brands?

01

Dual-engine model of "in-house brand + platform"

Building a large user base

Different from the development model of various e-commerce platforms, SHEIN started with its own clothing brand, winning the favor of young overseas consumers with fashion clothing at a high cost-performance ratio of $5 for a crop top, $10 for a pair of shorts, and $15 for a dress.

Through its innovative flexible on-demand supply chain model in the clothing industry, SHEIN has achieved a blend of fashion and high cost-effectiveness. The "stylish, exquisite, and high-cost-effective" clothing has driven young users overseas into a frenzy and laid a solid foundation for continuous user retention on SHEIN's independent site and app.

According to SimilarWeb data, SHEIN's independent website traffic ranks first in the global fashion and apparel category, surpassing major brands such as Nike, Zara, Macy's, Lululemon, and Adidas. The average time spent on the website visit is higher than any mainstream fashion brand in the United States.

With an already established and mature supply chain and the coveted huge traffic entrance of the e-commerce platform, it is clear that SHEIN can take bigger steps to further consolidate, maintain, and expand its user moat.

In 2023, in addition to its in-house brand, the company has further iterated the platform model, forming a dual-engine development model of self-operated brands + platforms. On the one hand, it continues to delve deeper into the fashion field through the recognition and popularity of its established clothing brand. At the same time, the platform model provides new choices for third-party merchants through "agency operation" and "self-operation," bringing more high-quality products and a more complete and diverse range of categories to overseas consumers.

02

Deep involvement in the ESG field

Creating a warmer image of SHEIN for users

SHEIN's continuous deep involvement in the ESG field (environmental, social, and governance) over the years is the second reason why it has won over young overseas consumers.

Globally, users are increasingly interested in the goals and purpose of brands. Brands that promote social progress, equality, and environmental protection concepts can resonate more with consumers. For example, according to the "2022 Global Marketing Trends Report" by Deloitte, consumers are paying more attention to brands' objectives and meaning, and brands that promote social progress, equality, as well as environmental protection concepts are more touching for consumers. The research company, Kearney, has also surveyed 30,000 consumers in 32 countries, with the results showing that 78% of respondents would prefer to buy environmentally sustainable products.

For example, the concept of repeated and multi-use products is one of the environmental protection concepts advocated by overseas consumers. On SHEIN's second-hand platform, SHEIN Exchange, millions of American users purchase or resell goods, thus extending the lifespan of goods as much as possible. SHEIN provides a platform for them to engage in green living.

This trend of sustainable consumption is gradually gaining traction on various social media platforms, and the seemingly niche green consumer group is gradually becoming more mature in scale. Though SHEIN has done more and talked less, it has always provided users with a better consumer experience through ESG-related practical actions, and has gradually formed a more stable relationship with young user groups.

03

Connecting online and offline

SHEIN steadies its foothold in the fashion industry

Although the race SHEIN has been running that pursues the freshness of young people is becoming increasingly crowded, SHEIN has solidified its influence in the fashion industry, making it difficult for newcomers to catch up. In addition to the advantage of online channels, SHEIN is also increasing its interaction with consumers through pop-up stores in major global markets, enhancing offline experiences. In August of this year, SPARC Group Holdings II LLC ("SPARC Group") announced a strategic partnership with SHEIN and became the shared holder of Sparc Group with minority shares of SHEIN.

It is worth noting that Sparc Group owns well-known fashion brands including fast-fashion women's wear brand Forever 21, mid-range men's outdoor brand Nautica, and high-end men's wear brand Brooks Brothers. The influence of Sparc Group, which will undoubtedly boost the visibility and influence of SHEIN, is further exemplified by Forever 21, which was founded by Korean immigrants Do Won Chang and Jin Sook Chang. During its peak period, the annual sales of Forever 21 reached $4 billion, and it had hundreds of stores worldwide.

At the same time, Sparc Group will bring massive offline resources to SHEIN. To be known, Sparc Group consists of brand management company Authentic Brands Group and American retail real estate company Simon Property Group, with Simon Property being the largest shopping mall in the United States, owning more than 4,000 retail stores and in-store shops worldwide.

For example, the products of the priority fast fashion women's brand Forever 21, will be purchased and produced by Sparc Group and then sold to SHEIN for online sales. SHEIN will also test the offline market by setting up in-store shops at Forever 21 stores, testing product displays, providing return and exchange services, and more.

Regarding the partnership, SPARC has also pointed out that "SHEIN's original on-demand production model and online consumer experience, combined with SPARC's rich experience in retail and brand management, will complement each other, accelerate product innovation, explore new business areas, and enhance the customer experience, thereby further expanding its market influence in the fashion industry."According to media reports in 2023, SHEIN disclosed in a letter to investors that it had achieved the highest half-year net profit in its history. It is evident that in various aspects such as platform strategy expansion, embracing ESG corporate social responsibility, and exerting greater influence in the fashion industry, SHEIN is gradually gaining a solid foothold on the global stage in a more diverse and enriched manner.