OOTD

Fast-fashion staple Shein plans a US expansion to deliver faster to Gen Zers (and be more like Zara)

Friday, September 16, 2022 by Robinhood Snacks |
Fashein haul (Cezaro De Luca/Getty Images)

Fashein haul (Cezaro De Luca/Getty Images)

5 fits and a pair of combat boots… Chinese shopping app Shein is expanding its US footprint as sales boom in its #1 market. The online-only retailer has thousands of trendy fits at ultralow prices (think: $10 wool pants). Shein was last valued at $100B, and in Q2 it surpassed Amazon as America’s most downloaded shopping app.

  • #Unboxed: Shein plans to open three new US distribution centers and hire 3K workers to get $5 tops to America’s teens.
  • #OOTD: Shein’s only US distributor opened in Indiana in April and is already forecast to generate $175M/year.

Not-so-fast fashion… Social media has supercharged demand for new fits to fill the feed. But for all of Shein’s popularity, its shipment times have lagged fast-fashion standards. While rivals like Zara, H&M, and Amazon can deliver in two biz days, Shein packages can take up to two weeks (they all come from Asia). While ETAs haven’t dulled Shein’s shine, delays could be getting in the way of its next big venture:

  • High prices = low patience: Last year Shein launched a higher-end clothing line called MOTF (think: $100 silk dresses), but demand is soft because shoppers are less willing to splurge and wait 10 days for that bachelorette fit.
  • Zara-fication: While Shein moves large volumes, its revenue falls short of rivals’ because its items are so low-priced. Last year Zara earned $19.5B in sales while Shein reportedly brought in $16B.
THE TAKEAWAY

The price must be right, but so does the time… To command higher prices, Shein can’t just be a fast-fashion brand — it has to be a fast-delivering fashion brand. By setting up shop where its top customers are, it can cut down delivery times by three to four days.