E-commerce giant Shein is expanding its reach to cover more than just the fashion and apparel it’s known for—and in the process, it’s starting to look like just another familiar online marketplace platform.
Shane attracts brands such as home goods conglomerate Colgate-Palmolive, toy maker Hasbro and skin care brands to sell their products in his market. Reuters reports this. Tuesday. A company known for affordable and stylish clothing, albeit made from… concern on labor practices and their environmental impact—is taking steps to create a platform that is everything to everyone.
“Everyone associates Shein with fashion, but we do all the verticals,” Christina Fontana, senior director of Shein brands for Europe, the Middle East and Africa, said at a Paris conference on April 17, according to Reuters.
“Our consumers want brands [so] if that’s what they’re looking for, we’re going to give it to them,” she added.
Shane’s expansion overseas is a clear tactic to get a bigger piece of the e-commerce pie, said Steve Tadelis, a professor of economic analysis and policy at the University of California, Berkeley. Luck.
Shein has largest fast fashion market share in the US, and its annual profits doubled to $2 billion in 2023 compared to the previous year. The company is eyeing an IPO and massive success. Estimate: $90 billion. Although the size of its retail empire still pales in comparison to Amazon’s stranglehold 38% U.S. e-commerce market, Tadelis said Shane will want to go after the industry leader.
“It’s no surprise that with all the regulators around the world and talk of Amazon’s monopoly that needs to be reined in, Shane is now taking a bite of their apple and is likely to take a bigger bite. ” He said.
Shein’s big victories
Shein, Chinese fast fashion platform. based from billionaire Sky Xu in 2008, it has achieved meteoric success and 45 million monthly users thanks to its large-scale and efficient production and distribution strategy.
Using artificial intelligence and electronic monitoring, Shein can identify online trends, ask its suppliers to produce small batches of products, and then collect initial sales data to decide whether to mass produce the product. The system all but ensures that the company has its finger on the pulse of trends and can deliver products quickly, although it has found itself in hot water over allegations of copyright infringement and data harvesting and distribution lists of counterfeit products.
Even though regulators like the European Union’s European Commission have tried to put checks and balances on the company to thwart its questionable business practices, Shane may have found a way around it.
John Dayton, professor emeritus at Harvard Business School, spoke about this. Luck that Shane’s strategy of including more brands on its platform will only help the company avoid increased scrutiny: the site could soon be filled with thousands of listings for familiar and trusted products like Colgate toothpaste and Play-Doh, essentially telling regulators what to eat here nothing to see.
“They won’t come under scrutiny,” Dayton said.
Facing Amazon
Shane’s behind-the-scenes methodology makes moving beyond fashion a natural next step, says Tadelis. With an efficient infrastructure, Shein can expand beyond apparel more flexibly.
“I really think it’s a smart business decision to say, ‘We have an amazing logistics network, let’s start expanding it into other areas where we could get low-cost products,'” he added.
Rui Ma, technical analyst and chief operating officer of market research platform AlphaWatch.AI, said: Luck that Shein’s strong position in the apparel business provides another advantage in his race to beat Amazon. Fashion is a notoriously finicky sector. According to Ma, Amazon, despite its presence in the clothing world, has not been able to achieve the same success as Shane.
“Historically, it has been very difficult to match supply and demand,” she said. “It wasn’t a particularly easy category.”
But while Shane is taking pages out of Amazon’s book, Amazon is simultaneously doing the same to Shane. Amazon announced Last December, it would cut seller fees from 17% to 5% on clothes under $15, and starting in January, clothes priced between $15 and $20 would trigger a 10% fee. The company said Monday that its packages had been delivered. faster than ever: 60% of orders placed in 60 major US cities were delivered the same day or day after the order was placed. The company says this is part of its multi-year efforts to stay on top of the e-commerce market and meet customer needs. Shein customers may have to wait 14 days for their orders to arrive.
Tadelis thinks this is normal. As in most markets, company philosophies begin to converge when a formula that works is discovered.
“It’s not surprising that these things look more similar,” he said. “Because once there is a good, winning strategy… then you will see imitators.”
The consumer will surely have to face copying and similarity of promotions and benefits on e-commerce platforms. But Ma said don’t be fooled by Shane’s attempts to emulate his competitors. The site may start to resemble Amazon in many ways in its offerings, but behind the scenes it sticks largely to its unique logistics network.
“We consumers may feel the same way. It will be more like an everything store,” she said. Luck. “But I think the logic of how it builds this experience is very different from Amazon’s.”