With sales exceeding 100 billion yuan in half a year, SHEIN wants to be even faster

Sales in half a year exceeded 100 billion yuan, and SHEIN wants to be even faster

SHEIN can maintain its “low price” and also be “fast”.

As a benchmark brand for cross-border fast fashion, SHEIN has done a thriving overseas business. While launching independent websites to expand new categories, it has also continuously strengthened its supply chain. Every move has made SHEIN's business landscape more complete and clear, and now SHEIN is accelerating again.

Half-year sales exceeded 100 billion yuan, SHEIN has new moves

SHEIN has gained a large number of fans in overseas markets with its low-priced products, and the fast and powerful domestic supply has also given the brand more confidence. At present, SHEIN has users in more than 150 countries and regions, and its products continue to be popular in Europe, America, the Middle East and other countries.

In the first half of this year, SHEIN's sales reached 100 billion yuan, reaching more than half of the annual target of 30 billion US dollars. Its super high performance made many industry insiders sigh: "It's amazing!" However, the needs of overseas consumers are constantly changing. Low product prices are a major advantage, but in addition to price, fast delivery has also become a key demand of buyers.

Previously, foreign media reported that some consumers were dissatisfied with SHEIN's product delivery time, believing that the waiting time was a bit long. In this case, how to further speed up delivery became a problem to be solved. In response, SHEIN took a series of measures in the future.

In April this year , SHEIN opened its first US distribution center in Indiana, which has improved SHEIN's supply and delivery efficiency. However, for SHEIN, this "fast" is obviously not enough.

Foreign media reported that SHEIN will add two more distribution centers in California and the Northeast in 2023, with the goal of further improving distribution efficiency. After the new facilities are completed, SHEIN's distribution centers in the United States will increase from one to three, and its distribution competitiveness will be strengthened, and it will be "faster" and consumers' favorability is expected to further increase.

The news also said that SHEIN will expand the number of employees in the Indiana factory to about 1,400 based on the 1,000 employees. It is worth noting that in the current situation where many local retailers in the United States are laying off employees and clearing inventory, SHEIN's series of actions are different. Factory expansion, staff expansion... SHEIN's chess game is getting bigger and bigger.

In fact, in terms of supply, SHEIN has formed a relatively mature and powerful supply system in China. In Guangzhou, SHEIN has hundreds of core suppliers, which enables its daily average new product volume to reach 7,000 SKUs at most, and it can launch multiple new products every few weeks. Its domestic central warehouse, overseas transit and operation warehouse storage capabilities are also very strong.

If the overseas distribution centers cooperate in the future, SHEIN will form a clearer chain in production, supply and distribution. As we all know, SHEIN's "low price" and "fast delivery" are its two major advantages. Low price is the stepping stone for SHEIN to open up the overseas market. Clothes for $3 and shoes for less than $10 have stimulated the shopping desire of overseas consumers. This low-price sales can't help but make many people associate SHEIN with Pinduoduo.

At first, some people called SHEIN "the Pinduoduo of the clothing industry", but as its popularity continued to grow, this statement was gradually diluted. However, recently the real Pinduoduo launched a cross-border platform to enter the US market, which made many people exclaim: "It's even more popular."

A new player joins the “low-price” market. Has SHEIN met its rival?

This month, the US market welcomed another competitor that focuses on "low prices". Temu , a cross-border platform launched by Pinduoduo, has ranked among the top 40 shopping apps on Apple. As both are domestically launched overseas and focus on low prices, more people will naturally compare it with SHEIN.

From many perspectives, the two platforms are actually quite similar. In terms of price, both platforms are very low, and buyers can buy many of their favorite products on the two platforms for just a few dollars or tens of dollars. In addition, on the Temu platform, the lowest price for some products is even only 1 cent, and shipping is free. The discount has surprised some sellers.

This also makes some sellers who have not yet joined the platform wonder how they can make a profit. Some sellers even said, "Are you sure they are not treating us as suppliers? Why does it feel the same as the initial development of Wish?" Some industry insiders also said, "Whether it is Temu or SHEIN, both focus on low prices, but there are still some problems in product quality control. Only by solving these problems can they develop in the long run."

In terms of sales categories, Temu has gradually opened up to full-category sales from the previous testing phase. SHEIN is mainly clothing, but also includes shoes and bags, jewelry, home furnishings, beauty products, etc. However, in general, both cover a variety of categories, but both focus on women's clothing. "Temu is actually similar to SHEIN in style and sales categories," said some of the first sellers to settle in.

Even though Temu and SHEIN are very similar in terms of price and product categories, SHEIN, which was the first to successfully go global, has already taken root in the US market and gained recognition among young overseas consumers, while Temu is temporarily lagging behind in its start.

However, judging from the current download volume of Temu platform and the order situation of sellers, the initial momentum is strong. Although there are complaints from the sellers, most of them still choose to find out. Whether it will continue the domestic success in the future, even surpass SHEIN, or come to an abrupt end is still unknown.

Inflation in the US market continues, and low-priced products are becoming popular

Recently, the biggest factor affecting American consumers is inflation. On the 13th of this month , the U.S. Bureau of Labor Statistics released data showing that its consumer price index rose 8.3% year-on-year in August , which has fallen from the previous increase. However, it is still higher than market expectations.

The continued inflation has had a significant impact on the lives of local residents, and consumer habits have also changed to a certain extent, mainly in terms of spending expectations and product choices.

According to Deloitte's recent annual holiday retail forecast, although this year's holiday sales in the United States may be lower than last year, they will still maintain growth, but the sales growth rate will slow down. In addition, according to a foreign survey, due to inflation, 78% of consumers plan to reduce their spending by at least 10% this holiday. Their current biggest concern is that the price of goods is too high, followed by transportation costs and out-of-stock goods or insufficient inventory. Nearly half of consumers choose to shop online.

Sensitivity to product prices has made low-priced products a hot commodity. Since the second quarter of this year, the popularity and search volume of discounted products from major retailers in the United States and products on second-hand platforms have continued to increase. Data shows that searches for related products on the second-hand platform ThredUp increased by more than 40% during the back-to-school season. Products on sale at Walmart, Target and other stores have also been sought after by shoppers.

Under this consumer boom, Temu and SHEIN, which win with low prices, will likely have greater room for growth in sales. However, as the seller said: "Low prices are welcome, but product quality must keep up."