Legacy Brands Must Evolve: Zara and H&M must reimagine their business, reduce their reliance on brick-and-mortar stores, and speed up their production timelines in order to compete.
Actionable Takeaways for Readers:
To Consumers: Reflect on the environmental price tag of ultra-fast fashion. Consider finding a balance between affordability and sustainability.
To Retailers: Embrace digital technologies, use data to influence design, and test hybrid business models that balance physical presence with digital nimbleness.
For Entrepreneurs: Shein’s success is a playbook for disruption—niche focus, fast iteration, and digital-native strategies can outcompete even the largest incumbents.
Shein’s rise is not just a business story—it’s a predictor of where retail is headed. The world of fashion will never be the same again.
Read also: Breaking Down Amazon’s ACM23X: Innovation, Intelligence,
How Shein Dethrones Zara and H&M: The Rise of a New Fashion Powerhouse
For years, H&M and Zara controlled the fast fashion scene. These two giants revolutionized the way people shopped by offering current fashion at affordable prices, quickly churning runway trends into stores. Suddenly, in a stunning plot turn, a small Chinese company named Shein (pronounced “She-in”) has outrun them both, becoming the world’s most downloaded fashion app and the world’s most visited fashion website.
But how did Shein, the humble online shop that started from the ground up, surpass industry giants who had spent decades pouring their efforts into establishing their global presence?
This article delves into how Shein employed technology, marketing savvy, and supply chain knowledge to trump Zara and H&M.
The Origins of Shein
Shein was started by Chris Xu in 2008 in Nanjing, China. It started as a tiny online wedding dress boutique. The firm did not have a design department and copied most of its apparel from wholesale suppliers in Guangzhou.
The Power of Ultra-Fast Fashion
Zara and H&M popularized fast fashion by shortening the time from catwalk to shop—to several weeks from several months.
This is how Shein does it:
Massive SKU Volumes: Shein adds 1,000 to 10,000 new SKUs every day. Compare with Zara’s bi-seasonal collections or H&M’s monthly releases.
Small First Runs: Shein makes very small first runs (around 100–200 units per item). If an item is popular, it’s scaled up in production quickly.
On-Demand Production: The business partners with an agile supply chain that is able to respond quickly to changes in demand.
Data-Driven Design
One of the biggest factors Shein has been able to outmaneuver physical stores is its heavy use of data.
Shein’s high reliance on artificial intelligence and big data follows consumer behavior. This is how they use it:
Social Media Monitoring: Algorithms study platforms like TikTok, Instagram, and Pinterest to determine fashion styles, colors, and designs that are trending.
Customer Feedback: Shein makes use of live customer reviews and past purchasing behavior to enhance its designs, prices, and stock levels.
Clickstream Data: All customer interactions on the Shein app or website are tracked. What customers shop for, how long they browse certain products, and even how they scroll through pages all feed back into the design process.
Influencer and Social Media Dominance
Both Zara and H&M have decent brand awareness and marketing budgets, but have succeeded by building an influencer marketing empire.
Micro-Influencers: Rather than spending top dollar for high-profile endorsements, Shein works with thousands of micro-influencers and YouTubers, TikTokers, and Instagrammers.
User-Generated Content: Shein encourages customers to post their “Shein hauls,” as influencers and everyday consumers open up and style their purchases. Such videos become viral and generate immense brand awareness.
Affiliate Programs: The influencers are typically registere in Shein’s affiliate program, and they get a commission on the sales that they make. It motivates them to promote the brand more forcefully and frequently.
Aggressive Global Expansion—Without Stores
Shein’s model has never relied on opening up physical stores. Instead, it focused on going to global markets with e-commerce.
Here’s how Shein went global:
Localized Apps and Sites: Shein offers localized apps across different languages and currencies, tailoring user experiences by area.
Brand Positioning: H&M has bet everything on sustainability, which appeals to some customers but infuriates those who are primarily drive by price and trend.
Problems Persist: Labor, ethical, and environmental concerns shadow Shein’s operations. Its long-term survival depends on addressing those issues while maintaining its speed and value.
For Entrepreneurs: Shein’s success is a playbook for disruption—niche focus, fast iteration, and digital-native strategies can outcompete even the largest incumbents.
Shein’s rise is not just a business story—it’s a predictor of where retail is headed. The world of fashion will never be the same again.
