What makes Shein so cheap? Shipping from China?

No, shipping from China is not the main factor which makes Shein so cheap.

Shein, a globally recognized name in the world of fast fashion, is rapidly gaining popularity for its trendy yet affordable clothing. Catering primarily to a younger demographic, Shein is more and more popular among young people and has become an important online store.

The company has grown a lot recently, with their sales increasing a lot. In 2022, Shein generated $22.7 billion in revenue, which was a 44% increase from the $15.7 billion it made in 2021. By leveraging the power of social media and digital marketing, Shein has successfully expanded its reach to millions of consumers worldwide. The company has been projecting revenues of $60 billion by 2025, reflecting its ambitious growth plans and successful business strategies​. (Revenue data is from ‘Shein Revenue and Usage Statistics (2023)‘)

When visiting Shein’s website, what mostly impress us is Shein’s low prices – its pricing strategy. The brand offers fashion-forward clothing at prices that are significantly lower than many of its competitors. This affordability is not accidental but a result of a series of strategic business decisions.

Why is Shein so cheap?

To understand it, you need to know Shein’s business model. Shein is a company from China with its headquarter in Nanjing, China. They are centered around fast fashion and e-commerce, and focused on quickly producing affordable clothing that follows current fashion trends. With an efficient supply chain primarily based in China, Shein can keep the production cost of each clothes at low. This is the core of Shein’s business model – fashion and low price.

Besides, Shein’s sales strategy is mainly online, reducing expenses related to physical stores. Shein extensively uses digital marketing, particularly on social media platforms, to attract a young customer base. The strong online presence helps it grow rapidly in the global market.

Following are six reasons in detail why Shein is so cheap.

Good Supply Chain for Mass Production

Shein has a huge supply chain system with many manufacturers mainly based in China and some Asia countries. Shein employs mass production techniques, which significantly reduce the cost per item. By producing in large quantities, they can negotiate lower prices for materials and manufacturing, passing these savings on to the consumer. Moreover, bulk purchasing of materials further reduces costs, enabling Shein to maintain a competitive edge in pricing.

Direct-to-Consumer Model

Consumer behavior has changed since the COVID-19 crisis – with a shift towards online shopping. As to news, traditional clothing retail giant like ZARA and H&M shut down hundreds of stores in 2022 and 2023 due to low sales, and this trend of closures is still in progress. While, operating primarily online, Shein eliminates the need for physical stores. This direct-to-consumer approach cuts down additional costs like retail markups and store maintenance, making their products more affordable.

Data-driven Platform

Besides huge supply chain network of thousands of manufactures, efficiency is another key of Shein’s supply chain. By analyzing consumer behavior and preferences through their online platform to forecast demand, they minimize waste and excess inventory. They track which items are viewed, added to wish lists, and purchased. This data helps them identify emerging trends and popular styles. By understanding customer preferences, Shein can quickly adjust its inventory and production to align with these trends. This approach allows them to efficiently manage their supply chain, ensuring they produce items that are more likely to be in demand, thus reducing overproduction and waste.

Low Labor Costs

Much of Shein’s manufacturing is based in China, where labor costs are relatively lower than in many other countries. Shein builds long-term relationships with over 5000 third-party contract manufacturers, which ensures compliance with stringent standards and contributing to their growth and efficiency. This aspect significantly contributes to the reduction in production expenses, allowing Shein to price their items more competitively.

Fast Fashion Strategy

How many new items can Shein add daily? The answer is approximately 2000. This high turnover rate is a key aspect of their fast fashion strategy, allowing them to continuously offer a wide range of trendy, up-to-date fashion choices to their customers. Shein’s business model is based on fast fashion strategy. This strategy involves leveraging a digitalized supply chain and data analytics to forecast trends and customer preferences. Shein’s model allows for rapid production and a continuously updated product catalog. And, they focus on small-batch production, reducing waste and aligning closely with current market demands. This strategy enables Shein to offer a wide variety of trendy and affordable clothing.

Digital Marketing and Operations

Shein effectively uses digital marketing strategies, such as social media promotions on Instagram and TikTok, to attract its young customer base. This modern approach to marketing is more cost-effective compared to traditional advertising methods in reducing overall operational costs. Additionally, Shein frequently hosts promotions and interactive events online, encouraging customer participation and engagement.

The Wall Street Journal’s video furtherly explains ‘How is Shein Prices So Low‘.

Where does Shein ship from?

Shein’s products are shipped from a network of warehouses located in various parts of the world. The company’s primary fulfillment center is in China, where it is headquartered. This central warehouse in China plays a significant role in their global distribution, as many of their products are manufactured in and shipped directly from there.

Reasons of Shein Shipping From China

Cost-Effective Manufacturing

China’s lower labor and production costs play a crucial role in keeping Shein’s manufacturing expenses down. This translates into lower prices for consumers without compromising on profit margins.

Speed and Flexibility in Production

China’s manufacturing industry is known for its speed and ability to quickly respond to changing fashion trends. This agility allows Shein to rapidly produce and introduce new styles to the market.

Logistical Advantage

China has advanced shipping and logistics which helps Shein send products worldwide easily. This advantage makes Shein easier to reach a global audience.

In addition to their main warehouse in China, Shein has established several fulfillment centers in other regions, including in Europe and the United States. These additional warehouses help facilitate faster shipping and reduce delivery times for customers in those regions.

Shein’s Fulfillment Centers in the United States

In the United States, Shein has been expanding its presence through fulfillment centers. These centers are crucial for reducing delivery times and improving customer satisfaction:

• Whitestown, Indiana: This existing fulfillment center has significantly enhanced Shein’s distribution capabilities in the Midwest

• Cherry Valley, California: A newly established center in Southern California, aimed at speeding up deliveries across the U.S.

When an order is placed on Shein’s website, the company determines the best shipping method and location based on the inventory’s availability and the customer’s geographical location. This strategy allows them to optimize shipping times and costs, ensuring a more efficient delivery process for their customers worldwide.

How Fast Can Shein Deliver?

Typically, Shein’s delivery times can vary depending on several factors such as the destination, the shipping method chosen, and the availability of the items. Shein’s website usually provides estimated delivery times at checkout, which can give a more accurate expectation based on the specific order and location.

For example, when choosing Los Angeles in California:

Standard Shipping: Shipping time of it 85.02% is ≤ 10 days.

Express Shipping: Shipping time of it 65.98% is ≤ 7 days

You can refer to the percentage to select the most profitable shipment to you.

However, these timeframes can fluctuate due to factors like customs clearance processes, logistics efficiency, and regional variations in delivery services. Some force majeure factors – extreme weather, earthquake, and port strike – may also affect the shipping time. For the most accurate and up-to-date information, it’s recommended to track orders on Shein’s official website or app, or contact their customer service in case of your package lost.

What to do if your Shein package doesn’t arrive?

An important note (No.4) in Shein’s shipping information page tells you the deadline you need to contact Shein’s customer service if you haven’t got the package.

If you found that: 1) your package has not been delivered within the specified time; 2) the tracking information shows that the package has been delivered but you have not received it; or 3) your package includes missing/incorrect items, please contact customer service within 45 days of the payment date so that the aforementioned issues can be addressed. For other orders, products, and logistics-related issues, make sure to contact customer service within 90 days of the payment date.

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FAQ

Is Shein’s clothes good quality?

As a fast fashion retailer, Shein offers a wide range of products at affordable prices, which sometimes means the quality can be inconsistent. Some customers report satisfaction with their purchases, noting good value for the price, while others have experienced issues with fit, durability, or material quality.

When looking for clothes on Shein, remember to read reviews and look at customers’ photos. This helps you better understand the quality of the product you choose.

Should I buy clothes from Shein?

Whether to buy from Shein depends on your personal preferences, needs, and values. If you’re looking for trendy, affordable clothing and are willing to navigate the variability in quality, Shein might be suitable for you. Here are two suggestions before you order:

Refer to Customer Reviews: Reading reviews and looking at customer photos can provide a better understanding of the quality and fit of the clothing.

Read Return Policy: Familiarize yourself with Shein’s return policy in case the items don’t meet your expectations.