Is the Chinese online apparel seller a wild success due to an innovative business model — or because of a concerted effort to skirt import duties and workers’ rights? That Shein is a modern-day e-tailing success story is not in dispute. With a focus on stylish “fast fashion,” the company was founded by Chinese entrepreneur Chris Xu in 2008, initially drop-shipping directly to overseas consumers from third-party wholesalers in China. In 2012, it came into its own as a retailer with a global, fully integrated supply chain, supported by an army of third-party suppliers that grew to their current level of more than 5,000.
Revenues hit a reported in 2022. Shein’s innovative approach to e-commerce is based on minimizing inventory and responding, as much as possible, to consumer demand in real time. In the process, it has been able to cut the period from manufacturing to fulfillment from three weeks to five days, according to Anand Kumar, associate director of retail research with .
A streamlined supply chain allows Shein to undercut the pricing of other fast-fashion retailers, he adds. Sales were further bolstered by an aggressive marketing campaign over social media, targeting a young, largely Generation-Z consumer base. “Our business model, focused on creating an on-demand production approach that measures and responds to customers’ needs and preferences, is what drives our growth,” a Shein spokesperson told Shein says it can better match customer demand and suppl.