With Ecommerce World Review, RetailX’s exclusive festival of research, set to launch the Europe’s Marketplace report 2024, a profile looks at the controversial fashion marketplace – Shein.
The Chinese fast-fashion giant has taken the global fashion industry by storm in recent years, becoming a massive disruptor to the fashion sector. Founded in Nanjing, China, in 2008 as a wedding dress retailer, it has rapidly expanded its operations to become one of the world’s largest online retailers, with a focus on women’s clothing.
Global footprint and rapid growth
While Shein’s initial focus was on the Chinese market, it quickly recognised the potential for international expansion. By 2012, it had launched its English-language website and by 2015, it was shipping products to more than 200 countries and regions worldwide.
This rapid growth has been fuelled by a combination of factors that differentiated it from many traditional European fashion retailers and make it a prime example of how pure marketplaces can dominate a sector.
For starters, Shein’s business model relies on a fast-fashion approach that allows it to offer products at extremely competitive prices, making it popular among younger consumers. It does this extremely quickly, delivering new styles on an almost daily basis.
Alongside this, it offers a vast selection of clothing, accessories and home goods, catering to a wide range of styles and preferences. Driving this is Shein’s incredibly efficient supply chain and some relentless targeted marketing.
The efficient supply chain enables it to bring new trends to market quickly, often mirroring high-fashion designs at a fraction of the cost. As it does this, Shein’s social media marketing campaigns and influencer partnerships have helped to build a strong brand presence and reach a global audience.
Impact in Europe
Shein’s entry into the European market has had a significant impact on the traditional fashion industry. The company’s ability to offer trendy products at low prices has disrupted the business models of many established retailers, forcing them to adapt to the changing consumer landscape.
Shein’s presence has intensified competition among European fashion retailers, leading to price wars and a focus on differentiation. It has also instigated a shift in consumer behaviour, with shoppers increasingly turning to online retailers like Shein – and off the back of this Temu – for affordable fashion options, challenging the dominance of bricks-and-mortar stores.
However, this global success has also seen Shein face criticism over its environmental and labour practices about the sustainability and ethical implications of fast fashion.
Despite these controversies, the company’s influence on the global fashion landscape cannot be ignored. Shein has democratised fashion by making trendy styles accessible to a wider audience. It has also highlighted the growing importance of ecommerce and the need for traditional retailers to adapt to ever-changing consumer preferences. As Shein continues to expand its operations and evolve its business model, it is likely to have a lasting impact on the fashion industry. The company’s success has forced competitors to rethink their strategies and innovate in order for them to stay relevant in the fast-paced world of online retail.
This profile originally appeared in the ChannelX Europe’s Marketplace report 2024.
Outlining the overall performance of the sector across Europe, the report assesses how marketplace trading as a whole has changed since 2023, focussing on both the sectors using marketplaces and the regions where marketplace use has changed. There are a total of 27 profiles in the report.
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