So how did the Chinese company recently surpass Zara to become the top fast fashion brand in the US?
Competitive prices. According to analysts at Morgan Stanley, the average unit price of Shein’s products is only $7.90 and only Primark and Forever 21 can match some of its prices. This is particularly relevant because Shein’s target customers are females under the age of 25 who have low incomes and who typically do not wear the same clothes more than once or twice.
Extensive product range. Shein now offers over 600,000 products and each day it offers 6,000 new products, a feat which none of Shein’s competitors can even come close to.
Tax breaks. Although it is based in China Shein has always ignored its domestic market and sold all its products overseas. Under the Chinese tax system these transactions do not incur any export taxes which gives the company a major advantage over its competitors. Moreover, because of Shein’s rock bottom pricing only a small percentage of these overseas shipments incur import taxes as most fall below import duty thresholds which in the UK is £135 for example.
Worldwide shipping. Shein has set up an impressive shipping network which now enables it to send goods to 220 countries. Also, Shein profits from discounted shipping rates as the Universal Postal Union classes China as a developing country.
During my research I came across an online article by the Guardian on this topic which makes interesting reading and can be found at: https://www.theguardian.com/fashion/2021/dec/21/how-shein-beat-amazon-at-its-own-game-and-reinvented-fast-fashion