Passing Amazon to top the list in the U.S. … The identity of the mysterious e-commerce apparel company “Seein

SHEIN, a company that even those in the apparel industry were unaware of its existence

In the past 10 years, no rapidly growing global apparel company has emerged, and the competition for expansion has been the same, but in 2020, when the COVID-19 crisis began, a rapidly growing brand suddenly emerged and began to attract attention. That brand is SHEIN.

In the U.S., SHEIN surpassed Amazon as the most downloaded e-commerce app in May last year, and in Japan, it has been widely reported in the economic and apparel industry media since around 2021. As far as I know, this was in response to reports in the Chinese media of a huge 5 trillion yen scale fundraising. Until then, people in the domestic apparel industry and media had not even heard of it, including myself.

What is “SHEIN”…

Since this is not an industry or economic media, there may be many readers who have never heard of SHEIN, so I will give a very general summary of the SHEIN brand.

SHEIN is a brand that was reportedly established in China in 2008, and sells clothing only over the Internet, without any physical stores. Founded in 2008, SHEIN is said to have initially been involved in different businesses than it is today, such as the wedding business. After a series of business changes, the company shifted to a “direct apparel sales business” via SNS and launched SHEIN in 2015, which is said to have become the current business.

The reason I write all of this in a hearsay tone is that there is nothing publicly available about SHEIN. The company’s founder has never been interviewed or even photographed, making SHEIN a mysterious brand.

Surpassing UNIQLO” in just seven years since rebranding

In the fall of 2022, global sales are said to have finally reached 2.8 trillion yen, and since Fast Retailing, which operates UNIQLO, posted consolidated sales of 2.0301 trillion yen in the fiscal year ended August 2010, the media in Japan ran articles this fall with the headline “Surpassing UNIQLO. However, this 2.8 trillion yen was not enough to make the Japanese media react.

However, this sales figure of 2.8 trillion yen has not been officially announced, so it has to be a form of hearsay, but if it is true that it was reached in only seven years since the rebranding in 2015, we must say that the growth rate is astounding. That is why it has attracted so much attention from the domestic economic and industry media.

Stealthy and rapid growth mainly on social networking sites for the youth generation, such as TikTok

SHEIN is characterized by its overwhelmingly low prices. SHEIN is characterized by its unparalleled low prices, as well as the speed with which it plans and launches trendy products. Low prices are at various levels, but I would say that SHEIN’s prices are on par with g.u.’s or even a little lower. To put it another way, discounted items are extremely low-priced. I think the easiest metaphor for the general public to understand is that the prices are on par with g.u., but the speed at which trendy products are introduced is on par with ZARA.

There is a report that it takes only three days from design creation to product launch (whether this is also true or not is unknown), but it is inconceivable that this process can be completed in three days, because in normal clothing production, after designing, patterns (paper patterns) are made, samples are produced based on the patterns, and the samples are revised before mass production begins. It is unthinkable to complete the process in three days. However, it would not be impossible if the company were to steal some of the products of other companies’ brands. Although SHEIN is being discussed for its overwhelming growth in size, it is also increasingly being sued for copyright violations.

Unlike previous fashion brands, SHEIN was able to rapidly expand its brand scale without attracting much attention until 2020 because it concentrated most of its sales promotions and announcements only on social networking sites favored by the younger generation, such as TikTok and Instagram. For example, SHEIN’s announcements and advertisements rarely appear on Facebook, which is a favorite of the old men and women generation. Also, unlike previous domestic clothing brands, SHEIN did not appear in fashion magazines, and TV commercials rarely aired. The source of SHEIN’s rapid growth has probably been its sales in the U.S. rather than in Japan.

I have been intermittently teaching part-time at a fashion college for eight years, and I have seen an increase in the number of students buying at SHEIN since last year. However, the students seem to be more aware that they are buying no-brand, low-price clothing at SHEIN, rather than buying SHEIN branded clothing. In other words, it is similar to the image of buying low-priced no-brand clothing from ZOZO or Rakuten, which are online shopping malls.

Pop-up store opened in Japan

SHEIN will open a pop-up store (limited time only store) for about three months at the former site of UNIQLO’s Shinsaibashi flagship store in Osaka from October 22 this year. A notice has already been posted at the site of the former UNIQLO Shinsaibashi flagship store. The UNIQLO Shinsaibashi flagship store was closed last August and has been abandoned for a long time, but this is the first time it will be utilized. The building has five floors, from the first basement to the fourth above ground, but SHEIN will only use the first floor above ground.

SHEIN has already opened a limited-time store in the U.S. prior to Osaka, and is beginning to explore physical store initiatives as well, moving away from online-only sales. The launch of a physical store by a major online retailer can be expected to have a synergistic effect, as evidenced by Amazon’s opening of a permanent physical store in the United States. ZARA also believes that physical stores have the greatest advertising value.

Is the goal a general retail site like Amazon?

However, it is difficult to imagine that SHEIN and UNIQLO will lose a large number of UNIQLO customers in Japan, since they have different product plans, business models, and goals. It is difficult to imagine that UNIQLO will lose a large number of customers in Japan.

As mentioned earlier, SHEIN introduces trendy products at high speed, while UNIQLO handles relatively basic designs and takes approximately one to six months from the start of design to the launch in stores. The competition with SHEIN will probably not be UNIQLO, but rather ZARA, which offers trendy products at a faster pace.

Fast Retailing, which operates UNIQLO, is the world’s third largest retailer in terms of sales, while Inditex, which operates ZARA, is the world’s number one retailer in terms of sales. Furthermore, while ZARA and UNIQLO have only expanded their product lines to include clothing, shoes, and bags, SHEIN has begun to branch out into cosmetics, leading some experts to suggest that SHEIN may eventually aim to become a general retail site similar to Amazon.

It will be interesting to see what SHEIN will do in the future and whether the current reports are true or not.