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Overthe past decade, thousands of Chinese clothing manufacturers have begun sellingdirectly to international consumers online, bypassing retailers thattraditionally sourced their products from the country. Equipped withEnglish-language social media profiles, Amazon seller accounts, and access tonimble garment supply chains, they have fuelled the acceleration of trends andflooded closets everywhere with a wave of impossibly cheap clothes.
Restof World, a non-profit, tech-focused journalism outlet based in New York, spentsix months investigating this new ecosystem, speaking with manufacturers,collecting social media and product data, making test buys, and interviewingshoppers and industry experts in China and the US. The results of thatreporting reveal how Chinese apparel makers have evolved to cater to thedesires of internet-native consumers – and transformed their consumption habitsin the process. Capitalizing on this shift are companies such as Shein: themost successful, well-known and well-funded online retailer of its kind.
Sheinis now one of the world’s largest fashion companies, but little is known aboutits origins. It was founded in 2012 under the name SheInside, and reportedlybegan by selling wedding dresses abroad from its first headquarters in theChinese city of Nanjing. (A spokesperson for Shein denied it ever sold weddingdresses, but declined to specify other details about its history.) The companysays its founder, Chris Xu, was born in China, though a since-deleted pressrelease described him as being from the US. Shein eventually expanded to offerapparel for women, men and children, as well as everything from home goods topet supplies, but its core business remains selling clothes targeted at womenin their teens and 20s – a generation who grew up exploring their personalstyle on platforms like Instagram and Pinterest.
Shein’sclothes aren’t intended for Chinese customers, but are destined for export. InMay, the company became the most popular shopping app in the US on Android andiOS, and, the same month, topped the iOS rankings in more than 50 othercountries. It’s the second-most popular fashion website in the world afterMacys.com.
By2020, Shein’s sales had risen to $10bn, a 250% jump from the year before,according to Bloomberg. In June, the company accounted for 28% of allfast-fashion sales in the US – almost as much as H&M and Zara combined. Thesame month, a report circulated that Shein was worth more than $47bn, making itone of the tech industry’s most valuable private startups. (Shein declined tosay whether the sales or valuation figures were accurate.)
Shein’s business model is aggressive. Comparisons to fast-fashion giants such asH&M miss the point: it’s more like Amazon, operating a sprawling onlinemarketplace that brings together about 6,000 Chinese clothing factories. Itunites them with proprietary internal management software that collectsnear-instant feedback about which items are hits or misses, which allows Sheinto order new inventory virtually on demand. Designs are commissioned throughthe software – some original, others picked from the factories’ existing products.A polished advertising operation is layered over the top, run from Shein’s headoffices in Guangzhou.
Throughits manufacturing partners on the ground in China, Shein churns out and teststhousands of different items simultaneously. Between July and December of 2021,it added anywhere between 2,000 and 10,000 individual styles to its app eachday, according to data collected in the course of Rest of World’sinvestigations. The company confirmed that it starts by ordering a small batchof each garment, often a few dozen pieces, and then waits to see how buyersrespond. If the cropped sweater vest is a hit, Shein orders more. It calls thesystem a “large-scale automated test and re-order (LATR) model”.
Ratherthan mimicking Amazon directly, Shein grew by bringing traits of China’sgamified e-commerce market to the rest of the world. Online shopping in thecountry has evolved into a form of entertainment, featuring live streamers,flash sales and enticing pop-ups that compel consumers to scroll through thenewest products. Taobao, a domestic Chinese e-commerce platform owned byAlibaba, helped pioneer interactive features such as custom productrecommendations, and even built a miniature social network into its app. Sheinhas used similar components on its platform, including a points system thatrewards shoppers for making purchases, leaving reviews and playing minigames.
Foryears, European brands such as Zara and H&M have embodied fast fashion,shortening the route from catwalk to shop window from months to weeks. ButShein isn’t chasing catwalk trends – rather, it often knocks off items seen onTikTok and Instagram, where hype cycles move significantly faster. Whereas Zaratypically asks manufacturers to turn around minimum orders of 2,000 items in 30days, Shein asks for as few as 100 products in as little as 10 days.
