Arezzo today has a mantra: the Shein project, says CEO – 03/15/2024 – Market

The president of retailer Arezzo&Co, Alexandre Birman, said this Friday (15) that the company is undertaking an optimization and presence project in digital media based on the model of Chinese fashion companies.

“Today it’s a mantra of our company: I don’t know if they gave it a name, but we have a project which is the Shein project. There’s no way around it. We have to create this model”, he stated during the group’s retail seminar of business leaders Lide.

Birman said that these companies pose a competitiveness problem in the country due to the lower taxes that fall on them and due to issues such as the origin of raw materials and cheap labor.

But, without getting into controversy, Arezzo’s CEO stated that it is necessary to recognize that there are two important differences in the business model of Asian retailers that need to be taken as an example.

One of them is the strategy of operating without stock, which is very important for the segment, he said, as fashion is volatile and has been changing at an increasing speed.

The executive said that retailers like Shein produce in very small quantities. Based on the speed of rotation, they can react in a maximum of three weeks, producing up to 10 thousand units. If the product runs out, the company then stops producing it and takes it out of line.

“It’s a winning model, yes. We have to recognize that,” said Birman, citing the business model of these companies that breaks down intermediaries.

The second difference cited by Birman is the strong presence of these Chinese companies in digital media. According to him, Arezzo has an internal determination to learn how to use TikTok to amplify the brand on the internet, something they have not yet achieved.

“TiKTok isn’t easy, it’s still not very trivial how to communicate and generate sales. To be honest, we haven’t learned yet,” said the executive, stressing that this is the digital tool that most converts into sales, in which Shein is a reference.

“That’s an example. So, let’s remove the tax part, the compliance part, which, ok, is wrong. Because that’s impossible and we can’t live together (…) But it’s still a unique, unprecedented model and for me it’s a winner”, he reaffirmed.