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Shein Business Model Breakdown: How Shein makes money?

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Shein is an international B2C fast fashion brand that mainly focuses on women’s wear but it also offers men’s apparel, children’s clothes, accessories, etc., and get them delivered worldwide. Shein was founded in October 2008 by Chris Xu and since then it has upheld the philosophy that “everyone can enjoy the beauty of fashion.”

Shein prides itself on offering on-trend styles giving to both young women and teens that would not break the bank. Shein’s headquarters is in Guangzhou, Guangdong, China. Shein has around 10,000 employees.

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Index:

How does Shein work?

  1. First, you need to download the app, and in which you need to register your email address and password.
  2. After registration on the app, you will get a certain amount of coupons that you can use while shopping on the Shein app.
  3. And if you visit the Shein app regularly, you will get a number of coupons and offers.
  4. If you need to buy any clothes or accessories or anything else from the Shein app, you simply need to add that item to your cart.
  5. You also need to give your address so that your order gets delivered to you safely.
  6. You can either pay through a card or there is also cash on delivery option available on the app which means you can pay the amount at your doorstep.
  7. Shein charges a certain amount of money for Cash on Delivery orders + shipping charges. 

Business Model:

Key Partners:

Shein one of the ultimate one-stop-shop for the modern in addition to economical fashionista has partnered with the leading global alternative payments provider and shopping service “Klarna”. Shein and Klarna partnered with each other to give shoppers the fashions they want and the flexibility they need.

Key Activities:

Shein is one of the most renowned fashion brands which has its roots in almost all countries. Shein has a broad channel mix encompassing desktop, mobile, social networks of fashion influencers which he uses for the growth of the company.

Shein’s one more strategy is to make themselves reach every household with the help of Instagram, TikTok, Youtube stars. These are some of the key activities adopted by Shein.

Key Resources:

Shein is a company that originated in China, while it has a base in China, this doesn’t mean there is some physical store or chain of shops responsible for managing orders. Shein began as an online retailer that has occasional pop-up locations internationally.

Value propositions:

Shein provides value to its customers by, its recognition and reputation as the company is a leading brand established in China and now is consistently growing internationally. The company also offers its customers trendy and fashionable products of low cost and sometimes offers them discounts. The company also offers products for both male and female that also adds value to its brand.

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Customer Relationship:

Shein provides its customers with all the services possible 24×7. Shein products are usually cheap, trendy, and fashionable which attracts many customers. The company also offers customers home deliveries, and sometimes free shipping on some products or on a definite amount.

Shein also provides policies of the company, FAQs, contact information so that customers will always be in touch with the company. Shein also operates social media accounts to interact with its customers such as Instagram and Facebook as most of its target audience is active on these 2 platforms.

Customer Segments:

With a strong social media presence, Shein’s target market is mostly young people who can be both females as well males. Shein always tries to pull up his socks in the world of fashion by providing its customers with trendy clothes.

Categories

Channels:

Shein offers its customers help through online shopping, as Shein does not have any physical store, therefore customers can only shop from an online store through their website or an app.

Cost Structure:

Shein produces the operation and maintenance of distribution in the supply chain.  It also produces the operation and maintenance of the distribution of digital IT infrastructure and supply chain.

Revenue Streams:

Shein’s major revenue source is its sales from its online e-commerce platforms. Shein’s global rank was 50th  and the net sales were also US $2,764.8 million in the year 2020. Though the company suffered a bit lost in the year 2020 due to pandemic and getting banned in India.

Valuation, expenses, and revenue:

Shein is preparing for its IPO as its valuation nears $47 billion. The revenue for the year 2020 was $2,764.8 million and was ranked 50th globally. Shein also have many social media accounts which gathers almost 9.95% of traffic and which tries to help them in their business, let us see which app helps the business the most with the help of a graph:

Investor’s Details and funding:

Shein has a total of 8 investors, some of the names are Tiger Global Management, Sequoia Capital China, Grandway Capital, Greenwoods Asset Management, IDG Capital, etc.

SWOT Analysis:

Strengths

  • The company is rapidly growing and doing business worldwide.
  • Quality and competitive prices.
  • Positive sales even after-sales issues arose.

Weakness

  • The delivery is slow comparably.
  • Lack of warehouses in various parts of the country.

Opportunities

  • Growth of e-commerce fashion industries among people.
  • Emerging worldwide in middle-class people with great disposable income.
  • Increase in potential customers consistently.

Threats

  • Volatile customer preferences
  • Great competition in the field of fashion.

Do Share Your Thoughts:

Do tell us all your thoughts in the comments section below, we look forward to reading all the comments in the section below.

Also, don’t forget to try our Android app 📱 which contains startup case studies and business book insights 📚 , verified business strategies, and no bullshit!!

Related Articles:

What is Shein?

Shein is an international B2C fast fashion brand that mainly focuses on women’s wear but it also offers men’s apparel, children’s clothes, accessories, etc., and get them delivered worldwide

Who founded Shein?

Shein was founded in October 2008 by Chris Xu. Shein’s headquarters is in Guangzhou, Guangdong, China.

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