The ‘TikTok of E-Commerce’: Shein Surpasses H&M and Zara Sales in US

Ally Feiam By Ally Feiam | 19 Jul 2021

Online retailer, Shein has surpassed Zara and H&M as the leading ‘ultra’ fast-fashion retailer in the US. How did the retailer do it?

In a new report from Earnest Research, the online giant began 2021 with a 13 percent market share of the fast-fashion online category in the US. Since January, the retailer now comprises 28 percent of overall fast fashion sales. It has quickly toppled the leaders, H&M, Zara, Forever21 and Fashion Nova, which makes up 20 percent, 11 percent, ten percent and eight percent, respectively.

This rapid rise to the top may not be surprising to Gen Z, who have helped drive these figures higher than its rivals, thanks in part to the trends emerging. from apps like TikTok. In the last 12 months, Shein’s sales shot up by almost 160 percent. In contrast. the fast-fashion industry increased by 15 percent between January and mid-June in 2021.

Shein (originally known as She Inside) is a Chinese online fast-fashion retailer. Founded in 2008 by Chris Xu, it currently serves 220 countries, including Australia, the US, the Middle East and all of Europe. Known as the TikTok for e-commerce, it’s loved by Gen Z for its hyper-trendy clothes and affordable prices. According to estimates, the retailer has projected revenue of almost $10 billion. According to Business of Fashion, it is reportedly experiencing continued growth of 100 percent YoY for eight years in a row.

Shein is a pureplay online retailer that prioritises its mobile and app, primarily at Gen Z shoppers. Its mobile-first strategy has led the online retailer to become the most installed shopping app in the US, smashing Amazon off the top spot. Shein is currently the second-highest ranked Shopping app on the App Store in Australia, and is in the top charts for 54 countries globally.

 

via BloombergQuint

Shein’s mobile-first strategy is well-paced for Gen Z | via BloombergQuint

The app uses the popularity of apps like TikTok and Instagram to connect with potential and return shoppers, with its ‘ultra-fast’ pieces released daily – rivals like Fashion Nova and Missguided reportedly release about 1,000 new items a week.

There’s no doubt that there are serious concerns about ultra-fast fashion brands like these, in the environmental factors alone. However, a Beijing-based analyst, Matthew Brennan, told Vox that it’s likely that Shein places initial orders of about 100 items when new designs are released. In contrast, rivals like Boohoo and Zara, which would place an initial order of about 300-500.

“Compared to its fast-fashion competitors, Shein is able to take more bets, but at a lower risk. It’s able to place very small initial orders with these factories, about 100 or even smaller,” he said. This way, if an item goes viral online (likely via TikTok), the retailer can quickly ramp up the volume of orders in stock to accommodate the load. In early June, rumours began swirling that Shein was filing for an IPO, but the retailer has denied these claims.

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