How China's most mysterious billion-dollar company won over US teens and became TikTok's most-hyped fashion brand

Mary HanburyAug 29, 2021, 15:25 IST

Shein has become a huge hit with young fashion lovers.Instagram/Shein

Shein is now the largest online-only fashion company in the world, according to Euromonitor.
The brand undercuts rivals on price and often adds thousands of new styles to its website daily.
It uses aggressive social media marketing to win over young shoppers.

Chinese fast-fashion retailer Shein overtook Amazon this year to become the most downloaded shopping app in the US.

Shein's app. Katja Knupper/Die Fotowerft/DeFodi Images via Getty Images

According to Coresight Research, it pulled in an estimated $10 billion in revenue in 2020.

Shein blue ruffled flower print skirt. Edward Berthelot/Getty Images

It's nearly impossible not to encounter the brand on social media - either via its ads or customers making TikTok "haul" videos, which discuss giant orders of recently purchased items.

The company was set up in 2008. Instagram/Shein

It's nearly impossible not to encounter the brand on social media - either via its ads or customers making TikTok "haul" videos, which discuss giant orders of recently purchased items.

So why has it been so successful?

Iskra Lawrence walks the runway during Walk Your Wonderful presented by Shein Together on September 19, 2020. Getty Images for SHEIN

The company operates an on-demand business model.

Guests attend a Shein event in 2019. David M. Benett

It uses algorithms and data science to identify new trends. According to Coresight, it adds an average of 2,800 new styles to its website each week.

When Insider visited the site on Wednesday, more than 4,700 new products were listed that day. Shein.com

This speedy approach is possible because of its unique supply-chain setup.

Guests attend Shein summer pop-up preview evening on May 23, 2019 in London, England. Dave Benett/Getty Images for SHEIN

According to Bloomberg, manufacturers must be located no more than a five-hour drive from its sourcing hub in Guangzhou.

A Zara distribution center in Northern Spain. Business Insider/Mary Hanbury

Its price point is also a big part of the appeal. It's just "ridiculously low," Schmidt said.

$6 for a dress. Shein.com

This has helped to create a subculture of internet shoppers, who are often teens, who post Shein "haul" videos on TikTok and Instagram.

"Shein hauls." Insider

It also partners with celebrities and well-known influencers to promote the brand on social media.

In 2020, Katy Perry was among a group of celebrity singers that performed for the brand's virtual fashion show. Getty Images for SHEIN

Its business model is built around overconsumption. The more customers spend, the more exclusive promotions they are awarded.

Its algorithm-driven design process has also led to some major mishaps in the past.

A screenshot of the necklace for sale on online clothing retailer Shein's website. Shein.co.uk

And it's frequently called out by designers and brands for creating copycat products, something many fast-fashion brands have been accused of - and which is completely legal.

Still, that hasn't stopped it from becoming the hottest teen brand on the market.

Shein came in second in investment bank Piper Sandler's ranking of teens' favorite websites. Instagram

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How China's most mysterious billion-dollar company won over US teens and became TikTok's most-hyped fashion brand

Chinese fast-fashion retailer Shein overtook Amazon this year to become the most downloaded shopping app in the US.

According to Coresight Research, it pulled in an estimated $10 billion in revenue in 2020.

It's nearly impossible not to encounter the brand on social media - either via its ads or customers making TikTok "haul" videos, which discuss giant orders of recently purchased items.

So why has it been so successful?

The company operates an on-demand business model.

It uses algorithms and data science to identify new trends. According to Coresight, it adds an average of 2,800 new styles to its website each week.

This speedy approach is possible because of its unique supply-chain setup.

According to Bloomberg, manufacturers must be located no more than a five-hour drive from its sourcing hub in Guangzhou.

Its price point is also a big part of the appeal. It's just "ridiculously low," Schmidt said.

This has helped to create a subculture of internet shoppers, who are often teens, who post Shein "haul" videos on TikTok and Instagram.

It also partners with celebrities and well-known influencers to promote the brand on social media.

Its business model is built around overconsumption. The more customers spend, the more exclusive promotions they are awarded.

Its algorithm-driven design process has also led to some major mishaps in the past.

And it's frequently called out by designers and brands for creating copycat products, something many fast-fashion brands have been accused of - and which is completely legal.

Still, that hasn't stopped it from becoming the hottest teen brand on the market.