SHEIN’s exploration evolves into the online marketplace

Chinese online fast fashion retailer SHEIN is exploring the possibility of becoming an online marketplace platform, in a move that would enable third-party merchants to sell directly to customers, and will put the company in direct competition with e-commerce giants such as Amazon.

It’s reported that the first stop SHEIN will be dipping their toes in is Brazil, with Brazil and Mexico being the company’s main markets in Latin America.

SHEIN was founded in Nanjing, China, and started off selling wedding dresses abroad, before rapidly growing into one of the world’s top online retailers. The company is known for its affordably priced apparel as well as a wide range of accessories and household items, thanks to the country’s stable clothing supply chain and strong manufacturing capabilities.

Over the past three years, SHEIN has experienced explosive growth in its overall sales. In 2020, whilst taking advantage of the surging online shopping demand catalysed by COVID, its GMV hit $10 billion for the first time, a 250% jump from the year before. By 2021, the turnover totalled $20 billion and is expected to reach $30 billion by the end of 2022.

From March 2020 to March 2022, SHEIN’s sales skyrocketed by 568%, representing 40% of the global fast-fashion market share. By allowing third-party merchants to sell goods directly to customers and its expanding product range, multiple income streams will be unlocked, further boosting the company’s revenue and development.

Despite SHEIN’s currently unstoppable momentum, when compared with Amazon the company is still not an equal match due to its imperfect logistics sector.

For example, US customers need to wait 7 to 15 days to receive their orders from China, which is a few weeks longer than Amazon, Zara and H&M whose companies have enough warehouses and platforms in the US.

On top of that, Amazon has invested heavily in building up its global fulfilment networks which opens up standardised shipping services and guaranteed delivery times to third-party sellers.

In order to shorten the duration of delivery, SHEIN is establishing more distribution centres at speed, with one already being used in Indiana, USA, effectively cutting shipping times by 4 days. The second distribution centre is forecasted to open in Southern California in the spring of 2023, with the third one already undergoing planning.

The move marks a new chapter for SHEIN’s development and more opportunities and challenges await the Chinese fast-fashion retailer.


Join our newsletter