Shein is aiming to take on e-commerce powerhouse Amazon. The Singapore-based fast-fashion phenomenon is branching out from its own branded apparel to become a marketplace where third parties can merchandise their wares — everything from designer clothing to small appliances and maternity products. The 11-year-old company recently launched its expanded marketplace in Brazil, Mexico and the U.S., and has Europe in its sights. The U.S. is a huge market for the company, accounting for an estimated $8 billion in 2022 sales, or about a quarter of its business, largely due to teenage appetite for its $5 skirts and $10 jeans.

Shein’s new profile also pits it against another global e-commerce giant, Temu, the international storefront for China’s PDD Holdings, which recently relocated its headquarters from Shanghai to Dublin.

Unlike Temu, which doesn’t sell in China, Shein does, focusing on marketing to young people through social platforms including Weibo and Douyin, much like PDD’s homegrown offering, Pinduoduo, a social e-commerce platform.

“To join Shein’s platform, sellers must already have annual sales of $2 million on Amazon, according to some of its recruitment advertisements,” writes The Wall Street Journal, adding that “to recruit third-party sellers, the company has doled out incentives on Chinese social media, from zero commission for the first three months to zero advertising charge.

“The company aims to incentivize 100,000 sellers to achieve annual sales of $100,000 and 10,000 sellers to reach $1 million in annual sales within three years,” according to Benzinga.

Although Shein’s growth has slowed in the U.S., falling to 13 percent year-over-year in the January through May period of 2023, compared to 59 percent growth for the same period in 2022, and a whopping 223 percent surge in 2021, according to WSJ, Shein has more TikTok followers than any other clothing brand, and the third-most followers on Instagram.

“What Shein has going for it is its large and loyal following, including an impressive social-media presence that lets it quickly detect trends — and spark new ones,” writes WSJ, speculating that if it can grow along with its young supporters as mature it can be a formidable competitor to Amazon.

Shein’s approach differs from Amazon’s in that the Asian firm “uses algorithms to predict customer demand and preferences based on their browsing activities” as well as “subcontracts with thousands of small factories, places orders in small quantities to test market appetite” and replenishes as needed, WSJ reports, noting that keeps inventory waste considerably below the 30 percent industry average.

Shein’s move comes as China’s ByteDance ramps up global e-commerce ambitions for TikTok.

Related:
Shein Launches “AcceleraShein” to Empower Marketplace Sellers, Press Release, 6/22/23
Shein Wants to Be the Next Amazon Marketplace. It’s Already Dealing with Counterfeits, Business Insider, 7/6/23
Shein Is Trying to Broaden Its Appeal by Luring Luxury Brands like Stuart Weitzman and Paul Smith, Business Insider, 7/8/23