Shein beat Amazon, it's the most installed shopping app in the USA


Shein's rise is unstoppable and reaches a very important milestone: she took the crown from Amazon as the most downloaded shopping app on iOS and Android in the US (source App Annie and SensorTower).

Its growth is constant because the startup, despite having reported having passed a valuation of 15 billion dollars, maintains a very low profile and does not seek to make itself known by the media.

What is Shein?

Shein is considered the "TikTok of e-commerce" selling clothing made in China, as do many retailers in the same industry. The difference is that Shein controls its own production chain, from design and prototyping to supply and production.

Each step is highly digitized and integrated with the next one, this allows the company to create hundreds of new products, based on a daily basis tailored to different regions and users' tastes.

The strategy is similar than TikTok, which combines content created by them with those produced by customers using algorithms to understand their habits in real time.

On May 11, Shein became the most downloaded shopping app on Android in the US and six days later it reached the same milestone on iOS too (source App Annie). An important milestone for an almost unknown reality until few years ago.

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Its origins

There are few information on how Shein, previously called "She Inside", was born. On its official website it describes itself as an "international fast fashion B2C e-commerce platform" founded in 2008. There is no mention of its founder and CEO Chris Xu.

In a 2018 article posted on their WeChat profile, they wrote that their headquarters are located in Nanjing, a city in eastern China known for its history and home to appliance giant Suning. It has also opened offices in other major Chinese cities, the United States, Belgium and the United Arab Emirates.

Shein's annual sales in 2019 reached 20 billion yuan (about $ 2.8 billion), based on what South China Morning Post reported.

Last year, Chinese tech news site LatePost said Shein revealed in an internal meeting that sales exceeded 40 billion yuan (about $ 5.6 billion). It also closed a funding round that valued it at over $ 15 billion.

Shein has its own sales channel and users data, unlike other brands that chosen Amazon for sales, which do not have access to customers data.

Today, Shein is the largest 100% online fashion company in the world, based on the volume of sales of own-brand products (source Euromonitor).

Disputes and investors

Shein's low profile is justified by the period of geopolitical tensions and increased regulatory oversight over China-linked tech companies.

Last June, the Indian government blocked Shein and 59 other mobile app, including TikTok and WeChat, they are considered "dangerous to India's sovereignty, integrity and defense, state security and public order."

The company also seems to want to hide and protect its secrets. Indeed, the e-commerce export race is highly competitive in China and it is common to see, for example, sellers on Amazon and eBay sabotaging each other.

Since May 17, Shein is the first iOS shopping app in 54 countries and 13 on the Play Store. The performance of the app makes one doubt about how much it spent on marketing to beat a commerce giant like Amazon. The other doubt is about how many of its app downloads are active users and therefore paying customers.

Shein hasn't announced who her investors are, but Chinese media reports have listed JAFCO Asia, Greenwoods Asset Management, IDG Capital, Sequoia Capital China, Tiger Global, and Shunwei Capital of the Xiaomi founder among its supporters.

Sequoia Capital China confirmed to be an investor, Shein didn't comment on this statement.

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Fanbase and customers target

The company has attracted a young audience with the constant publication of new trendy and cheap clothes it shows online and through its app, in addition to its aggressive social media marketing.

It publish a lot of advertises on platforms like Facebook, maintains a grid of influencers who promote the brand on TikTok and Instagram, regularly posts customers photos to get them to share clothes purchased online. During the past year celebrities like Katy Perry and Lil Nas X have performed at Shein events.

Despite tensions existing between the US and Chinese governments, American buyers didn't avoid Shein, as it's the second favourite website for American teenagers, Amazon is the first (source Piper Sandler).

Based on Piper Sandler's analysis, through a survey of 7,000 American teens, 7% of them chose higher income as their preferred shopping website. 56% chose Amazon, however, Shein is preferred more than brands like Nike and Urban Outfitters, and its market quote continues to grow.

For the first time, Shein is into the top-10 favourite clothing brands listed by teenagers.

Shein also produces clothes for men and children, but women are his main target. Its Instagram feed is almost exclusively related to female content. Although customers sometimes complain of late deliveries and poor quality products, buyers quantity is growing.

How Shein grows, despite the crisis in the sector

The company's lack of offline stores has been a huge plus in the past 2 years, as the pandemic forced shops to close.

While many fashion companies with major physical assets have suffered, sales at online retailers have increased. Shein is among those who take benefits from the e-commerce boom caused by the pandemic.

Shein's exponential growth is in contrast with the situation of the entire fashion industry, which is in a deep crisis. Many brands are still in difficult from the losses caused by the pandemic and it is hard to predict a quick recovery of the sales.

It must be considered that Shein certainly has enough funds to make it so popular in a short time. Success is not achieved only by selling low-cost products. An aggressive and expensive marketing strategy, the community factor and the involvement of the public are fundamental.

E-commerce, fast catalog rotation and small storage have made the difference in the last 2 years, and probably marked an epochal watershed in the world of commerce.

Author: Alessandro Ave

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