BM2212

Name: Section: Date: 05/10/23

ACTIVITY
SHEIN
Shein, a global online clothing and accessories retailer, was founded in 2008 with a Business-to-
Customer concept. This online-only fashion brand reinvented the e-commerce business model set by
Zara and H&M. Shein features mostly women’s clothing for all occasions and in all sizes. There are also
categories for men and children and a new section with home life products.

Shein is relatively low profile in its marketing strategies. There is no mega advertisement on TV, no
superstar brand ambassador, or even one physical store. And yet, Shein’s ubiquitous online presence on
TikTok, Instagram, and YouTube created a mega instant fashion enterprise that sells over 600,000
products to more than 220 countries. This year, Shein overtook Amazon to become the most
downloaded shopping app in the US.

Being the most-hyped online-only fashion brand, Shein encourages users to engage in the apps through
gamification, rewarding customers with points for frequent visits and writing reviews to earn points. A
piece of popular clothing can easily accumulate over 6,000 reviews with user try-on images. Another
hook from Shein is its use of pop-up and flash sales which customers will constantly check in to collect
attractive deals. Shein now offers over 30 languages on the site drawing over 50% of its site traffic from
foreign markets.

Shein’s true advantage is “real-time fashion,” a business model that takes the fast-fashion model to its
extreme by identifying fashion trends quickly and minimizing manufacturing cycles. Shein uses an in-
house design team and comprehensive analysis of fashion trend data to design, prototype, and ship
products substantially faster than its fast fashion competitors, releasing 500-2000 new pieces daily.

Shein churns out and tests thousands of different items through its manufacturing partners on the
ground in China. Between July and December of 2021, it added anywhere between 2,000 and 10,000
SKUs — stock- keeping units or individual styles — to its app daily. Shein confirmed it starts by ordering
a small batch of each garment, often a few dozen pieces, and then waits to see how buyers respond. If
the cropped sweater vest is a hit, Shein orders more. It calls the system a “large-scale automated test
and re-order (LATR) model.”

The Marketing Strategy of Shein has brought a new dimension to the retail business world. When it
comes to app store optimization, Shein takes an offensive approach. According to our Search
Intelligence data, 587 of the 632 keywords Shein advertises for are ones the app is not currently ranking
in the top 20. The exponential growth, product varieties, and unapologetic celebration of body positivity
have changed the market dynamics. Undoubtedly, Shein is still quite an unknown company outside the
US market. However, the organization focuses on the middle east and Africa for long-term growth. The
gamified experience on Shein’s portals and countdown timers for the season sale discounts are an
absolute delight for shoppers. They always felt they were getting things at a lesser price, and the
transactions happened fast. With a better customer retention rate and social connection, Shein has
been here to rule the market for a long time.

09 Activity 1 *Property of STI

Answer the following questions:

1. What type of offensive tactic is being used by Shein?

Shein's offensive approach to app store optimization entails advertising for keywords for
which the app is not already ranked in the top 20. This strategy is aimed at increasing the app's
visibility and downloads. Shein's marketing strategy focuses on engaging users through
gamification, rewarding customers with points for frequent visits and reviews. The app's use of
pop-up and flash sales also attracts customers looking for attractive deals. Shein's real-time
fashion business model identifies fashion trends quickly and minimizes manufacturing cycles,
allowing for the release of 500-2000 new pieces daily. Shein designs, prototypes, and ships
products far faster than its fast fashion competitors because of an in-house design staff and
thorough research of fashion trend data. Shein tests thousands of different items through its
manufacturing partners in China, adding anywhere between 2,000 and 10,000 SKUs to its app
daily. The "large-scale automated test and re-order (LATR) model" from Shein begins by placing
a small batch of each item on order before waiting to see how customers respond before
placing further orders.

Therefore, Shein's marketing strategy has changed the market dynamics with its
exponential growth, product varieties, and celebration of body positivity. Shein's focus on the
middle east and Africa for long-term growth is part of its expansion plan. Shein's gamified
experience and countdown timers for seasonal sales discounts create an enjoyable shopping
experience for customers. Shein's better customer retention rate and social connection help it
to dominate the market for a long time. Despite being relatively unknown outside the US
market, Shein's marketing strategy has brought a new dimension to the retail business world.

2. What is the most appropriate offensive/defensive tactic Shein should employ to retain its
market share?

Shein has successfully disrupted the fashion retail industry with its real-time fashion
business model, offering a wide range of clothing and accessories to customers worldwide
through its online platform. To retain its market share and stay ahead of competitors, Shein
should employ a combination of offensive and defensive tactics. Offensive tactics that Shein
could consider include investing in more targeted advertising on social media platforms like
TikTok, Instagram, and YouTube to reach new audiences and increase brand awareness. Shein
could also expand its product offerings beyond clothing and accessories by leveraging its fast
fashion supply chain to offer home decor or beauty products. Another potential offensive
strategy is to focus on expanding its presence in emerging markets like the Middle East and
Africa, where there is growing demand for affordable fast fashion.

In terms of defensive tactics, Shein should prioritize maintaining a high level of customer
satisfaction by continuing to offer a gamified user experience, frequent sales and discounts, and
a wide range of products to choose from. Shein should also invest in improving its shipping and
logistics operations to ensure fast and reliable delivery to customers worldwide. To mitigate
potential risks from supply chain disruptions or negative publicity around environmental or
labor practices, Shein should consider diversifying its manufacturing partners and implementing

09 Activity 1 *Property of STI

sustainability initiatives across its operations. Shein's success has been built on its ability to
innovate and adapt quickly to changing market trends and customer preferences. By continuing
to prioritize customer satisfaction, expand its product offerings, and invest in sustainable and
ethical practices, Shein can retain its position as a market leader in fast fashion.

09 Activity 1 *Property of STI