Shein’s story: from wedding dress website to hit app – 04/20/2023 – Market

Shein, an online fast fashion platform, pledged this Wednesday (20) to invest directly in factories in Brazil to produce the same products it sells on its website in the country.

The commitment assumed with the government is to make contributions that allow the creation of 100 thousand jobs in the country. Shein directors promised the Ministry of Finance to nationalize, within a four-year period, 85% of the goods they sell to Brazilians.

“The products will be made in Brazil. It is very important for us that they see the country not only as a consumer market, but as a production economy”, stated the Minister of Finance, Fernando Haddad. According to the minister, Shein also committed to adhere to the Federal Revenue’s compliance plan. On the other hand, he said, the retailer demanded that the rule apply to everyone.

The Chinese brand is now the biggest fast fashion brand in the world. Its popularity soared during the pandemic by offering an online clothing catalog at low prices, at a time of high clothing inflation in Brazil.

Chinese but based in Singapore, Shein was founded in 2008 under a different name, ZZKKO, by entrepreneur Chris Xu. In 2011, under the name SheInside, it became known as a website selling wedding dresses, although it sold other types of women’s clothing.

As of 2012, it began to increase its presence in European countries and on social networks. The name Shein (pronounced xi-in) only appeared in 2015.

Between 2020 and 2021, during the pandemic, the company’s value doubled. It went from $15 billion to $30 billion on annual revenue of $10 billion, according to Bloomberg. As of April 2022, it was valued at $100 billion, more than H&M and Zara combined, according to The Wall Street Journal. Today it is considered the largest fast fashion brand in the world — it is present in around 150 countries and has 10,000 employees, including its own and third parties.

Part of the success is due to the fact that, over the past ten years, the company has developed its own supply chain, based on on-demand production that reduces inventory waste.

In an interview with Sheet in November, Felipe Feistler, general director of Shein in Brazil, said that this is the company’s differential. On the occasion, the brand opened a temporary physical store at the Vila Olímpia mall, in São Paulo. The products were priced between R$ 14.99 and R$ 166.95.

“We do tests with 100 to 200 pieces in the application. Once the demand is confirmed, we scale production. Everything is very fast, in real time”, he said.

The retailer estimates that this business model avoids a 20% loss in the production chain. “That way we can offer prices that are more affordable than the market average”, says the general director. “Instead of producing 10,000 products only to find out later if there will be sales or not, we produce from 100 to 200 and confirm the demand.”

In Brazil, it is currently meeting in a temporary office on Avenida Paulista, in the central region of São Paulo. Feistler told Sheet which is looking for its own headquarters for the company, which also has a distribution center in Guarulhos, in Greater São Paulo.

Documentary points to work analogous to slavery

Shein was the focus of a British documentary, released in October, “Untold: inside the Shein Machine”, which denounced working hours of up to 18 hours a day for low wages. Feistler defends the retailer’s modus operandi.

“We work with many suppliers from China, mainly. They have to follow ILO rules [Organização Internacional do Trabalho]. We do audits. If any supplier does not pass the audits, it is investigated and we stop working with it.”

The executive also claims that the company is dedicated to delivering sustainable parts. “We have a collection, the Evolut Shein, with products that use between 50% and 60% recycled polyester. But it is still not the majority of our mix.”

One of Shein’s great differentials, according to him, is the diversity of sizes –from XS to plus size– which would show “democratic” fashion. “Our activity on social media is also very strong, we work with ‘sheingals’, consumers who become poster girls and influencers who publicize the brand, in exchange for products and discounts.”