Who can become SHEIN

When it comes to going overseas, fast fashion clothing brands undoubtedly have a higher voice. When brands such as Xike and SHEIN, which mainly sell women's clothing, are doing well overseas, more and more investors have also seen the potential of this track. Especially in 2021, the overseas fast fashion track has shown a phenomenon of frequent financing of brands and large amounts of financing. There is no doubt that capital wants to bring out the second SHEIN, but who has more potential?

With millions of fans accumulated in one year, Halara is rising strongly!

Halara was founded in July 2020. It is a sportswear brand founded by Zhang Xiaopei, the former CTO of Chehaoduo. It is affiliated to Beijing Quanliang Quansu Technology Co., Ltd. It is a fast fashion export cross-border e-commerce brand similar to SHEIN. Its positioning is to be the "Chinese version of ZARA".

Within one year of its establishment, Halara has received two rounds of financing, including a US$30 million angel round led by Today Capital and a US$100 million round led by Sequoia China, IDG and other capitals.

Like SHEIN and Zaful, Halara has also chosen the sports and leisure category, mainly selling short-sleeved shirts, sweatpants, tennis skirts and other sports and leisure products. Its product designs are mainly European and American styles, and the prices range from $20 to $40. From the official website of Halara, the overall page style is very similar to SHEIN, such as product discounts and page layout.

Halara's main market is the United States, which accounts for 73.37% of its sales. Currently, the monthly visits to its website remain above 1 million. According to data from APP Annie, the download volume of its iOS version of the app is basically stable in the top 100 of the US shopping list.

Figure 1

Different from general fast fashion brands, Halara not only aims to improve its sensitivity to fashion trends, but also to enhance the performance of its products.

It is understood that Halara has developed two product lines around fabrics, namely Petitoff Fabric and Cloudful Fabric, and has placed its marketing focus on them. Among them, Petitoff Fabric solves the problem that pet owners' clothes are easily sticky with hair and need to be depilated; while Cloudful Fabric mainly solves the problem that users sweat during exercise and their clothes are not breathable.

In Halara's team, in addition to the brilliant resume of its founder Zhang Xiaopei, most of its core team members are from first-tier companies such as Amazon, Google, Microsoft, Facebook, etc., and have strong practical experience.

In addition, Halara also has a number of uniquely developed predictive inventory analysis ( PIA) software that can help it achieve zero inventory for the brand. While traditional brands generally waste inventory, Halara can achieve zero inventory through PIA and pass on the benefits to consumers. In this way, consumers can not only get low-priced products, but also greatly increase user stickiness to the brand.

Perhaps it is precisely because of its excellent team and strong technical capabilities that Halara has an advantage over other brands.

In fact, in addition to Halara, there are many Chinese fast fashion companies that have gone overseas and are favored by capital, and they are also shining in their respective segments.

Who can become SHEIN

According to statistics from Statista, the global women's clothing market accounts for about 40% of all clothing categories, and it is expected that the scale of the women's clothing market will reach 789 billion US dollars by 2023. With the high saturation of the domestic women's clothing market, sellers are naturally unwilling to miss out on the cross-border pie. The best examples are the well-known industry giants Tencent leading the investment in Xike and Alibaba launching AllyLikes and other women's clothing platforms.

Although women's clothing has been exported in large numbers in recent years, it is undeniable that there is still much room for development in the subcategories.

Bloomchic: Plus-Size Womenswear

As a D2C brand focusing on the overseas plus-size women's clothing market , Bloomchic was established at the end of 2020 and is affiliated to Guangzhou Shenyi Information Technology Co., Ltd. Its founder is the son of Zhou Chengjian of Metersbonwe. It mainly sells plus-size clothing such as tops, pants, and dresses to the North American market.

In less than a year since its establishment, Bloomchic has completed multiple rounds of financing. Its investors include major investment companies such as Mingshi Capital and 5Y Capital, and the investment amount has reached tens of millions of dollars.

Figure 2

There is no doubt that plus-size women's clothing is experiencing a boom. Yang Tianzhen, an agent with many celebrity resources in the entertainment industry, once admitted: "As an obese person, I am troubled by the lack of plus-size women's clothing brands in China."

An industry insider said: "The size of the plus-size women's clothing market in the United States is actually not much different from that of the full-size women's clothing market, but the market competition is much smaller. " Earlier, the fast fashion women's clothing giant SHEIN also bet on the plus-size women's clothing market and launched the brand Sheinde.

Cider: Plus-size women's clothing, swimwear

Cider, a women's clothing brand targeting Generation Z women, is also favored by investors. It mainly sells women's clothing, swimwear and plus-size women's clothing, with overall product prices below US$50. It is affiliated to Beijing Lizhi and Mango Technology Co., Ltd., and its founder Wang Chen is the co-founder of Yi'ersan.

Since its establishment in May 2020, Cider has completed four rounds of financing. Its investors include domestic top venture capital firms IDG Capital and Heyu Capital, as well as top international venture capital firms DST Global and Silicon Valley legendary venture capital firm A16Z. Currently, Cider's valuation is approaching $1 billion.

Of course, Cider also has its own way of saving inventory costs , which is to launch new products in small batches every week and remove unsold styles after a few days . Unlike SHEIN , which places discount codes and purchase entrances on the homepage, Cider does not have any discount information on the homepage. Many industry insiders call Cider the 2.0 version of SHEIN, saying: "Although it cannot compare with SHEIN in terms of price, its design and texture seem to be better."

Urbanic : fast fashion women's clothing

As a fast fashion brand established in 2019, Urbanic is affiliated to Hangzhou Meifeier Technology Co., Ltd. Unlike many fast fashion brands that focus on the North American market, Urbanic 's women's clothing is mainly sold to India, Brazil and other regions. With its high cost-effectiveness, wide variety, and fast new product launch, it has rapidly risen in the Indian market.

Currently, Urbanic has obtained a US$10 million A+ round of financing led by Fosun Ruizheng . Earlier, Urbanic also received multiple rounds of financing from Sequoia Capital and CDH Investments.

Taking advantage of the overseas dividend and mature business model, Urbanic expanded rapidly after its launch. Six months after its launch, it achieved monthly sales of millions of dollars; two years later, it became one of the top brands of Chinese fast fashion going overseas. In the future, Urbanic will develop new products such as beauty and skin care products, mother and baby products, etc. based on the original categories.

In fact, whether it is Bloomchic, Cider, or Urbanic, these fast fashion websites that have been the most popular among young people in the United States in the past two years are all backed by Chinese companies. Relying on China's strong supply chain advantages, these e-commerce newcomers have applied their practical experience in China to overseas e-commerce, gained a large number of users, set off a wave on social platforms, and quickly joined the ranks of unicorns.

But it is undeniable that the newcomers rushing to the cross-border track has also intensified the competition among similar companies. If these newcomers want to become the next SHEIN, they have a long way to go.