Shein focuses on Europe
Chinese fashion retailer Shein is looking to expand in Europe. At the same time, the company’s value has fallen around 30 percent. Shein has been under scrutiny about its labor conditions and environmental impact.
Shein was founded in 2008 by entrepreneur and search engine optimization marketing specialist Chris Xu in Nanjing, China. The company is known for its affordably priced apparel. In its early stages, SHEIN was considered more of a drop shipping business than a retailer. Online retail shop Shein was originally named ZZKKO. The website SheInside.com was registered in March 2011 and advertised itself as “a worldwide leading wedding dress company”, although it sold general womenswear too. The company acquired its items from Guangzhou’s wholesale clothing market, which is a central hub to many of China’s garment manufacturers and markets.
Currently the company is not involved in clothing design and manufacturing, and instead obtains its products from the wholesale clothing market in Guangzhou. SHEIN is the world’s largest fashion retailer, as of 2022. The company was valued at $100 billion after a funding round in April 2022. In 2020 Shein grew by a staggering 250 percent.
According to CNN, TikTok plays a large role in driving customers to the company website due to a TikTok trend of bulk buying clothes from Shein and presenting Shein clothes to their audience like a standard haul video. On May 17, 2021, the number of Shein’s app downloads surpassed those of Amazon.
The Chinese retailer ships across 220 countries worldwide, with most customers in India and the United States. Now, Shein focuses on Europe. Shein made their products available in Spain, France, Russia, Italy, and Germany in the early 2010s; as well as selling cosmetics, shoes, purses, and jewelry, in addition to women’s clothing. Shein recently opened European pop-up stores in Madrid and Barcelona for click-and-collect. The company also has set up temporary shops in London and Paris before. In 2012, the company began using social media marketing by collaborating with fashion bloggers for giveaways and advertising items on Facebook, Instagram, and Pinterest.
Moreover, the company appointed Jacobo García Miña as European director of business development, Moda.es reported. Garcia is based in Dublin and formerly worked for H&M and Zara as well as Burberry and Salesforce. The director is meant to build relationships with European companies and improve Shein’s image in Europe.
Shein’s concerns with its image are not unjustified. The third most valuable startup in the world is facing a 30 percent valuation drop after its fast-paced growth in the past few years. In the run-up to an IPO, investors are now looking to sell their shares. More companies in the tech and ecommerce industry have seen lower valuations due to global economic uncertainty.
In addition, Shein has been involved in numerous controversies concerning copyright, labor conditions and environmental impact. Shein has also been criticized for a lack of transparency in these areas.
In August 2021, Shein claimed on its website that its factories were certified by the International Organization for Standardization (ISO) and SA8000. This was disputed and was considered to be a breach of the United Kingdom’s 2015 Modern Slavery Act. According to Reuters, Shein was also in violation of a similar anti-slavery law in Australia. In an investigation by Swiss advocacy group Public Eye it was found staff across six sites in Guangzhou were found to be working 75-hour weeks, in breach of Chinese labor laws.
Most recently, TikTok videos on Shein went viral showing brand labels with the word ‘help’ on them. According to Shein, the videos contain ‘misleading and false information’, saying the retailer takes supply chain issues very seriously.