Shein’s meteoric rise has spawned a legion of imitators eager to squeeze more sales out of the pockets of Generation Z consumers, In recent months, Chinese e-commerce group Pin-Duo and ByteDance, the parent company of popular short video app TikTok, have launched Shein-like platforms Temu and If Yooou, respectively.
Since its launch, Shein has quickly become the brand of choice for young female consumers in Europe and the US, who are attracted to the platform’s vast array of low-priced clothing and accessories. At its last funding round in April, Shein was valued at just over $100 billion, making it the third most valuable private company in the world at the time, behind Elon Musk’s SpaceX and ByteDance.
Pinduoduo launched Temu online consumer platform in September, with Pinduoduo’s supply chain management expertise and ready to enter Shein’s target market. Pin-duo has been aggressively expanding its market share by focusing on consumers in less affluent cities neglected by Alibaba and JD.com with cheap bulk purchases. So far, many Internet celebrities have shared Temu on social platforms, which has already attracted some attention.
Bytedance, meanwhile, launched a trial of its fast fashion platform If Yooou in the first quarter of 2022, initially targeting consumers in Europe. Like Shein, If Yooou adjusts production orders with manufacturers based on real-time feedback from shoppers on its website. Despite TikTok’s massive audience, ByteDance has a spotty track record in its own fast-fashion sales business. Bytedance’s other fast fashion platform, Dmonstudio, was also a shopping platform targeted at Western consumers and was shut down in February 2022 after failing to attract enough attention and traction.
Ally He, head of the overseas marketing team at a Guangzhou-based women’s clothing factory, says Shein was “lucky”. “Its success is built on digital marketing, paying influencers and pushing ads on social media,” he said. “Temu’s marketing costs for buying ads and partnering with influencers are now three to five times what they were when Shein started.”
Shein expects sales of $24 billion (24.077 billion euros) this year, according to data collected by the Wall Street Journal, and could become the world’s second-largest fashion category operator after INDITEX Group. Based on revenue of $16 billion in 2021, the figure equates to an annual growth rate of 50 percent, according to Credit Suisse estimates. Last year, Shein’s sales grew by 60%, and in 2020, the start of the pandemic, sales jumped by 250%. Shien’s 2022 sales could jeopardise H&M’s position, which currently ranks second in fashion distribution. In fiscal year 2021 (ending on 30 November the same year), the Swedish Group’s turnover was SEK 1989.67 billion (equivalent at that time to EUR 19.350.7 billion).