Full hosting competition intensifies, SHEIN is further globalizing
According to the latest data, SHEIN has become the largest fast fashion consumer brand in the United States with an absolute market share of 40%. SHEIN’s annual revenue in 2023 will exceed US$30 billion. This is also the result of SHEIN’s more than ten years of supply chain construction. And 2023 is also a year for SHEIN’s massive expansion. A long time ago, SHEIN pointed out in public that their plan is to move from a single category to multiple categories, from self-operation to platform, and from cross-border to localization. This year, SHEIN is taking some measures to further globalize. These measures also show SHEIN’s ambition to transform from a brand to a platform and build a global brand. From a global perspective, 2023 will be a year in which competition among major e-commerce platforms accelerates. Temu and TikTok Shop accelerate the development of overseas markets, and also set off a wave of supply chains going global. SHEIN also had to get involved in this war and directly face the challenges of competitors.
Many sellers can feel that in 2023, the overall growth of cross-border e-commerce has slowed down. More and more businesses want to pursue brand premiums, and brand going overseas has become one of the most discussed topics, and SHEIN is a model for Chinese brands going overseas. In 2022, SHEIN surpassed Nike and Adidas to become the most searched clothing brand on Google. In 2023, SHEIN, together with Apple, Gucci and other brands, was shortlisted for the top 100 most valuable global brands in Brandz. Overseas, SHEIN plans to develop platforms and acquire well-known brands. Domestically, SHEIN strives to absorb third-party sellers, promote full custody overseas, and is still strengthening the construction of its own supply chain. After the launch of SHEIN full custody in May, it attracted a large number of sellers. Attracting third-party sellers and expanding platform SKUs are part of SHEIN’s move towards a global platform, but the external competitive environment has also affected SHEIN’s original pace. In 2023, Temu, TikTok Shop and AliExpress are all under full custody, and the major platforms are actively sending people to various industries to attract investment and grab goods and traffic. Fierce competition will cause subtle changes in the ecological environment. Although the platform models are independent, they influence each other due to the involvement of the supply chain and market. SHEIN has to adapt to the pressure brought by competition.
In the past few years, SHEIN has existed as a hidden giant. Entering the second half of 2023, SHEIN will also begin to join the globalization volume. In 2023, after facing fierce competition from a series of competitors, SHEIN decided to increase the proportion of categories other than clothing and compete with Temu in all categories and all age groups. The battlefield came to full management. Many sellers will compare which of the several fully managed platforms on the market is better. Supply chain advantages are the first and necessary condition for full custody. Several sellers said that the most important thing for SHEIN full custody is to get low prices. Overall, SHEIN’s price reduction is not as strong as Temu’s. Relatively speaking, SHEIN’s price reduction is not as severe as Temu’s, the platform rules are more friendly than Temu, and the overall profit margin is higher than Temu.
Temu’s impact on SHEIN is obvious. Temu is aggressively seizing the market. According to sources, SHEIN’s annual revenue in 2023 will exceed US$30 billion, and Temu has set a GMV target of US$30 billion in 2024 and will reach the size of SHEIN in just two years. Overseas, the two platforms have directly formed a confrontational relationship, and have repeatedly filed lawsuits against each other in court. The dispute between SHEIN and Temu can be understood as a battle between brands and major Internet companies. The former has a seller’s mindset, while the latter has an Internet mindset. Behind Temu is a listed company with a market value of 100 billion, with huge financial resources, relying on huge losses to seize the market, while SHEIN is an independent website seller, and its advantage is its ability to make profits and make blood. Overall, SHEIN’s business model will be relatively healthy and will consider profits.
At present, SHEIN still focuses on its own brands, supplemented by third-party sellers. In an environment of intensified global competition, SHEIN’s approach is to protect its own business and strengthen its moat. In 2024, major e-commerce platforms will still face fierce competition, and it is still uncertain what new business models each platform will have. In the fierce competition, sellers should pay more attention to the policies and profits of each platform and make various adjustments in a timely manner.
