• by Aaron Paquette , Columnist, July 17, 2023

First came Walmart, to decimate mom-and-pop retail. Then came Amazon, to decimate brick-and-mortar chains. Now, a new challenger from China named Shein (pronounced SHE-in) threatens to upend retail by harnessing the power of social media to sell fast fashion at unbeatable prices.

Founded 11 years ago in China and now based in Singapore, Shein has become the #1 fast-fashion brand in the U.S., with an estimated $8 billion in revenue last year ($23 billion worldwide), and a 40% market share. Sensor Tower estimates Shein to have 152 million monthly active users worldwide, not far behind Amazon’s 275 million. Shein recently raised $2 billion at a $66 billion valuation, down from $100 billion previously, ahead of a potential late 2023 IPO.

Shein became a favorite of young adults worldwide by selling $5 skirts, $6 sandals and $9 jeans. Now, to jump-start U.S. growth that’s slowed from 223% in 2021 to 59% in 2022 to 13% in 2023 (Jan-May), Shein is expanding its marketplace of third-party sellers, aiming to sell everything from $1,200 commercial ice makers to 50-cent safety pins.

Shein draws an incredible number of social media followers. On Instagram, Shein offers separate accounts for its main brand (29.4 million followers), plus-size Shein Curve (3.8 million), Men (3.4 million), U.S. brand (1.7 million) and Kids (1.5 million). On TikTok, Shein_Official boasts 7.6 million followers, with #Shein and #SheinHaul two of the most popular hashtags.

Shein claims it can sell clothing so cheaply by monitoring social media trends, using predictive analytics, producing small runs, seeing what sells, and then making more of the hits, without getting stuck with the misses. However, critics allege that Shein provides little transparency around its supply chain or labor practices, leading many to believe that it manufactures in Xinjiang with Uyghur forced labor. Designers complain that Shein copies their work and undercuts them. And Shein takes 10-14 days to ship a “Shein Haul” directly from China to a U.S. customer’s doorstep, taking advantage of “de minimus” trade rules allowing imported packages under $800 to bypass government duties, taxes and fees.

Shein recently upped its PR game by expanding its supply chain beyond China; opening U.S. distribution centers; starting a recycling program; collaborating with diverse designers for its Shein X program; and spending $30 million to ensure better working conditions. However, it stumbled by inviting influencers on a two-week, all-expenses-paid trip to China, where they posted pro-Shein videos touting the working conditions in company factories. The blowback was fierce, and some influencers pulled down their videos, removed negative comments, and made apology videos.

What can brands learn from the recent success—and stumbles—of Shein?

*TikTok drives consumer trends. Shein is on the forefront of using TikTok to monitor and generate fashion trends, and to create the phenomenon of ordering and posting a “Shein Haul.” How can your brand shape social media to inspire consumers to buy and boost your product?

*Plant many seeds to harvest more apples. Shein makes numerous low-risk investments, manufacturing small batches of many clothes, then doubling down on the ones that sell, and discarding the ones that don’t. How can your brand use agile production methods to plant 100 seeds to eventually yield two robust apple trees?

*Don’t expect too much from influencers. It’s admirable to ask influencers to collaborate, and to inspire them to buy in bulk and post their haul to TikTok. But don’t expect them to attest to matters beyond their pay grade, such as human rights, working conditions and geopolitics.

By following the best parts of the Shein playbook, your brand can also make a “haul” on social media.