Last month, the retailer raised its prices in response to President Donald Trump’s tariffs and the elimination of a rule that previously let low-cost packages from China enter the US duty-free. The investigation also found that Shein shows “false or deceptive” sustainability claims, as well as “incomplete and incorrect” information about a customer’s rights to return goods and get refunds. The EU says Shein hides its contact information, making it difficult for customers to get in touch with the company. Shein increased the prices of its products on April 25, citing "recent changes in global trade rules and tariffs." Its sales growth has dropped significantly. Shein risks potential fines after the European Union warned the e-commerce platform on Monday over a series of practices that infringe the bloc’s consumer laws, from fake discount deals to misleading product information.
In addition to its online channels, Shein utilizes social media platforms to engage with consumers and promote its products. The brand has a strong presence on popular platforms such as Instagram, Facebook, and TikTok, where it shares fashion inspiration, product highlights, and behind-the-scenes content. By leveraging social media, Shein can reach a wider audience and drive engagement with its brand. Shein operates primarily through its e-commerce platform and mobile application, serving as the primary channels for its target audience to browse, purchase, and engage with the brand. Shein has a strong presence online, with a user-friendly spinning top candlestick website and mobile app that offers a seamless shopping experience.
Shein offers customer service support through various channels, including email, live chat, and social media. The brand aims to provide timely and helpful assistance to customers with inquiries or issues regarding their orders. However, some customers have reported instances of slow response times or difficulty in reaching a resolution for their concerns. Improving the responsiveness and efficiency of customer service could enhance the overall customer experience.
- There has to be a carrot-and-stick approach to pushing Shein to genuinely adapt to Sustainable business measures.
- These quality control issues may result from the fast-paced nature of Shein’s production processes, which prioritize speed and efficiency.
- There was, of course, almost immediate backlash on social media and, according to CBS News, users accused Shein of anti-semitism and demanded people stop supporting their brand.
- This is the very reason we consider Shein taking one step forward and ten steps backward when it comes to reducing its environmental impact.
- Specific revenues for Temu are unknown, but it was estimated in August 2023 that it represented less than 1% of PDD’s total sales in the second quarter of that year.
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While the fashion industry — most specifically, the fast-fashion industry — isn't the sole cause of the world's environmental issues, it is a major factor. If its growth continues as it's projected to, the Ellen MacArther Foundation predicts that its environmental impacts will be drastic. As Vauhini Vara wrote in Wired, "This damage isn't unique to Shein, but Shein's success makes it especially notable." However, as the company explores a plan to list its shares on the London Stock Exchange, it remains dogged by controversy over its environmental impact and working practices – including allegations of forced labour in its supply chain. Shein, which manufactures most of its products in China, is facing challenges in the US as well.
It accused Shein of providing incorrect and unclear information about return procedures and of delaying refunds, thereby undermining consumer trust and legal rights. The European Commission has accused fast-fashion giant Shein of engaging in a series of deceptive practices that violate EU consumer protection laws. The European Union has issued a stark warning to Chinese fast-fashion giant Shein, threatening the company with hefty fines for allegedly deceiving consumers and violating EU consumer protection laws. Investors should seek financial advice regarding the appropriateness of investing in any security of the company discussed in this presentation.
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One big pivot was the expansion of its product range to include men’s clothing, accessories, and home decor items. This strategic move broadened Shein’s appeal and solidified its position as a one-stop destination for fashion and lifestyle essentials. Even though it's existed for a while, Shein has really increased its popularity since 2020. Apart from the speed and abundance with which the company updates its website, Shein is also unique in its reliance on social media influencers for marketing. As Wired reported, the brand sends free clothes to influencers, who then make content featuring the items they receive — some of which become the famous Shein hauls — and offer discount codes to their followers, from which they often receive a commission. Shein is a huge name on social media, but there is a lot of information and history regarding the brand that most influencers aren't mentioning.
Competitors
SHEIN has since hired a team of lobbyists to help reshape its image on Capitol Hill, but it remains trapped in an unenviable position between China and the West. “I dislike Shein because not only is it fast fashion and doesn't have any labor regulations that prevent labor trafficking, but it's also not environmentally conscious,” said Meg Sweeney, president of APU's Free the Captives club. You can apply multiple strategies to figure out what gets the job done – in this case, get you free shipping on Shein. These include free shipping vouchers for first time customers, minimum purchase value, Shein club membership and special discount offers during seasonal sales period. While Shein strives to provide customers with a seamless and enjoyable shopping experience, but when it comes to post-sales customer support, the options are very limited. Ensuring transparency and accountability throughout its supply chain remains a significant challenge for Shein, particularly when it comes to labour practices and environmental impact.
Last year, a group of US lawmakers also called for Shein to be investigated over claims that Uyghur forced labour in China is used to make some of the clothes it sells. It's also snapped up competitors like Missguided, while Xu Yangtian, who rarely gives interviews, is now broke millennial said to be one of China's richest men.
By collaborating with social media influencers and celebrities, Shein amplified its reach and resonated with younger demographics, fuelling its rapid growth and expansion into new markets. In 2021, the Public Eye released a report that accused the fashion brand of violating Chinese labour laws. In the report, readers can see that a lot of the 'production sites' for Shein were, in fact, residential areas that have been transformed into sweatshops, all unsafe and crowded. On a poster at one of the workshops (where over 200 work), it claims that they work as a main supplier for Shein's parent company, Zoetop, and that they produce 1.2 million articles of clothing a day. Shein X has partnered with people like artist Donna Adi, Nigerian fashion designer Ngozika Okeke, just2trade review and SHEIN x 100K challenge winner Sashagai (Sasha) Ruddock.
Its success can be attributed to its ability to anticipate and adapt to changing consumer trends, its commitment to offering affordable yet stylish products, and its relentless focus on innovation and customer satisfaction. With an astounding estimated revenue of over $15 billion in 2021, Shein has taken the fashion world by storm since it was founded by Chris Xu back in 2012 (via Reuters). Shein is one of many fast-fashion retailers nowadays, but the company is unique in the sheer number of new styles it uploads to its website each and every single day. According to a 2022 Wired report, this number is a shocking 6,000, whereas other fast-fashion brands like Gap, H&M, and Zara typically offer somewhere between 30 to 100 new styles within the same time period. Clearly, this model works for Shein, because, according to Earnest Research, the retailer now tops every fast-fashion brand in market shares.
Takeaways from China’s Consumer Brand…
To effectively reach and engage its target audience, Shein uses a wide variety of marketing strategies, including social media advertising, influencer partnerships, and targeted promotions. By eschewing traditional distribution methods, Shein can maintain complete control over its product offers, pricing, and client connections. This approach gives Shein more flexibility and agility to react to consumer preferences and market developments. At the core of Shein’s business model is its online-centric direct-to-consumer approach which has been instrumental in its rapid success.
But its packages often take at least a week to arrive in markets such as the UK and US, unlike competitors such as Boohoo, Asos or OhPolly which offer next-day delivery. It has accelerated the "test and repeat" model, made famous by the likes of H&M and Zara owner Inditex. Just 6% of Shein's inventory remains in stock for more than 90 days, the BBC understands. The Covid crisis provided the company with a sales boost, says Richard Lim, chief executive of independent consultancy Retail Economics. "I think it’s good, as long as they show that they are making an effort to improve their environmental and work practices." It may bring more attention to the company's operations and provide a boost for the UK economy, particularly as the London Stock Exchange has been struggling to attract fast-growing companies.
Along with this, Whinston has shared that Shein plans to reduce its greenhouse gas emissions by sending more products by ship than by air. He also said that the brand wishes to make its supply sites more energy efficient and incorporate recycled fibers into its products more often. Producing clothes, in itself, negatively impacts the environment in a number of ways.
- Additionally, Shein has been reportedly found to manufacture a sense of urgency by deploying misleading countdown timers and limited stock notices, designed to pressure consumers into making hasty purchases.
- The little-known founders of Sheinside got together in 2008, led by entrepreneur Xu Yangtian, who started out in digital marketing and selling wedding dresses online.
- With imports, the company has taken advantage of a decades-old loophole in the US that exempts packages valued up to $800 from taxes as long as they're addressed and shipped to individuals.
- Tops are another key category for Shein, featuring an array of styles including blouses, T-shirts, crop tops, and sweaters.
Overall, Shein’s business model and target market are intricately linked, with its online-centric approach and direct-to-consumer strategy enabling it to effectively cater to the needs and preferences of its fashion-savvy customer base. As Shein continues to expand its global footprint and evolve its offerings, it remains a dominant force in the fast fashion landscape, redefining the way consumers shop for clothing online. To meet growing customer demand for products “that go beyond fashion and apparel”, home goods has become a near-term priority for SHEIN with the 2023 launch of its marketplace. The company has quickly established a foothold in the space, selling a wide range of decor, furniture, lighting, tools, utensils, and other household items and even leaping appliances and smart home devices in 2023.
In July 2020, a scandal sparked when Instagram and Twitter users — notably Marissa Casey Grossman — shared posts that displayed what Shein called a "swastika pendant necklace" being sold on the website (via Refinery29). There was, of course, almost immediate backlash on social media and, according to CBS News, users accused Shein of anti-semitism and demanded people stop supporting their brand. Shein eventually removed the necklace from its website and apologized on social media, claiming on Instagram that the pendant represented a Buddhist symbol for "spirituality and good fortune." CBC reported that lead exposure can damage the heart, brain, kidneys, and reproductive system; and contamination can be especially harmful to infants and children, making the levels found in the children's jacket that much more dangerous.
