How Trump’s trade war helped China shopping app Shein dominate the Gen Z online fashion market
- A trade-war era change to China’s tax code dramatically reduced costs for the company and all its suppliers, allowing them to undercut their global competition
- With shoppers stuck at home because of the coronavirus, Shein’s sales rose to a staggering US$10 billion last year – all of it without selling at home
On May 17, Shein – pronounced “she-in” – ended Amazon’s 152-day streak as the most downloaded shopping app in the United States, a remarkable feat for any seven-year-old clothing brand, let alone one most Americans over 30 still haven’t heard of.
The kids, though, are all over it. As with so many online phenomena, Gen Z and young millennial shoppers have propelled Shein’s rise, in thrall to the company’s never-ending, always-changing catalogue of clothes at prices that stretch even the most meagre allowance.
One recent Thursday, the app debuted 6,239 new items, including a floral backless halter top (US$5), purple dinosaur-print PJs (US$10), and a prom-perfect fitted butterfly-sleeve dress with pearl trim (US$22). Earlier this year, a UK blogger crowed that she’d paid just £100 (US$141) for more than 30 Shein bikinis, a clearly impractical number of swimsuits until you remember that social media audiences demand novelty above all.
Anything you want at prices so low you can afford two (or 30). That’s a rush approximating freedom for most people, especially fiscally constrained teens. Their enthusiasm has made Shein the first big fashion success from China, though its origins are nowhere to be found on the app. After doubling in 2019, its annual sales took off during the pandemic, more than tripling last year to make Shein the biggest web-only fashion brand in the world, according to the most recent data from Euromonitor.
Global investors like IDG and Sequoia have already piled in. A person familiar with its funding says Shein is valued at as much as US$30 billion, and last year, it hired Goldman Sachs, Bank of America and JPMorgan Chase & Co. as advisers on a potential initial public offering, according to others acquainted with its plans. The company itself is vague, saying reports about it are “often incorrect” and putting its valuation at “several billions of dollars’’ last year. In the short term, there are no IPO plans, a spokeswoman told Bloomberg on May 28.
