Evolution of the Fashion Industry

Introduction to Fast Fashion

• 1990s: Rise of fast fashion led by brands like Zara, H&M, and Topshop.
  • Process: Rapid mass production of catwalk designs in three weeks.
  • Result: Fashion became cheaper and more accessible.

Ultra Fast Fashion

• Turn of the Century: Online-only brands like Asos and Boohoo.
  • Production time reduced to a week.
  • Termed as "ultra fast fashion."

Real-Time Retail

• Current Era: Emergence of real-time retail.
  • Production time as little as three days.
  • Leader: Chinese company Shein.

Shein's Market Strategy

• Launches thousands of new apparel products daily.
• Low prices ranging from $2 to $30.
• Reported valuation in April 2022: $100 billion.

Mystery Behind Shein

• Founder: Chris Xu, a former digital marketer with SEO expertise.
• Origin Story:
  • Founded in 2012, actual operations began as early as 2008.
  • Initial venture: Dianwei, an e-commerce business.
  • 2011: Shein's domain registered, and investment began.

Technological Influence

• Smartphone Revolution: Pivotal for e-commerce growth.
  • Growth in smartphone shipments in China from 13 million (2009) to nearly 200 million (2012).
  • Resulted in China's dominance in the smartphone market.

Shein’s Global Focus

• Focuses on international markets rather than China.
• Inspired by Chinese fashion and e-commerce marketing tactics.

Data-Driven Strategy

• Mobile-first country with lax privacy laws facilitated data collection.
• Developed algorithms for trend identification.
• 2015 Rebranding: From Sheinside to Shein.

Supply Chain and Manufacturing

• Location: Panyu district in Guangzhou, a clothing manufacturing hub.
• Competitive Advantage: "Small order, quick response" model.
  • Orders in small batches, adapting quickly based on sales performance.
  • Cutting out middlemen and import tariffs.

Impact of the Pandemic

• Surge in sales during the pandemic.
• Sales: $9.8 billion (2020) and $15.7 billion (2021).
• Became the most downloaded shopping app in the U.S. in 2021.

Controversies and Challenges

• Design Theft: Allegations from smaller designers.
  • Lawsuits from brands like Doc Martens and Levi Strauss.
• Labor Practices: Concerns about transparency and working conditions.
• Challenges in investment due to lack of transparency.