Shein, the China-born but Singapore-based online fast fashion e-retailer, has become highly popular among Gen Z shoppers in the UK because of low prices and attractive clothing. With the commitment to make beauty and fashion accessible to the masses, the company operates in 150 countries and has had a significant presence in the UK since 2012. Shein UK has a clear edge over its European rivals, as evidenced by capturing a substantial portion of consumer spending that keeps increasing yearly. Shein keeps producing trendy clothing designs and other lifestyle products at meager prices. It helped the company gain a strong foothold across the British Isles. Many consider Shein the most feared global retailer as the company’s aggressive marketing strategies and solid supply chain helped spread its footprint worldwide.
Shein UK is Growing at a Rapid Pace
Shein has been a headache for homegrown UK fashion businesses since the new entrant gained rapid popularity and became a craze, especially among the younger population. The meager prices of the products and the quick turn-around of trendy designs packed a deadly punch and drove the indigenous fashion brands on the back foot. Having gained the confidence of customers who have become loyal too, the company plans to expand its UK business by acquiring a reputed British fashion brand, Missguided, a name for women’s wear.
In a relatively short period, Shein has grown significantly in the UK as its 16-month sales touched £1.12 billion as of December 31, 2022. The company declared a pre-tax profit of £12.2 million, and during the same period, the cash and cash equivalents amounted to £18 million. Shien’s UK market share is likely to reach 2.2% in 2023 from 1.7% in 2022. And for the first time, the company will be among the top 10 fashion retailers in the United Kingdom, according to the result of research by GlobalData.
Shein Poses a Great Threat to the UK’s Homegrown Fashion Business
How Shein has been growing and capturing the UK market has become a massive threat to other UK-based fashion businesses. UK’s multichannel retailers and pure-plays need help devising strategies to counter the threat from the Chinese company whose market aggression seems unstoppable. The entry of Shein in the UK during the mid-2010s caused a major disruption. And since then, the local fashion businesses have never regained their earlier hold in the market. Now that the company is on the way to acquiring Missguided, other companies are under a severe threat of eroding their customer base and losing market share.
Shein’s Business Model Is the Trump Card
Reviewing the causes of Shein’s fantastic growth in the UK, it becomes clear that the company’s made-to-order business model that minimizes inventory helped it outpace the competition. Shein draws data from web searches and social media behavior of the target customer groups and uses algorithms to establish the fashion trends in a specific country. The company’s worldwide design team uses the results to create the trendiest designs that automatically proliferate across the extensive network of suppliers. The company manufactures limited numbers of each style (about 100-200 pieces) to test the waters and then quickly re-order the popular ones. The manufacturer-to-consumer process ensures that the turnaround time is only 2-3 weeks from concept to final product.
Deeper Penetration in the UK and Europe
Besides planning for a deeper penetration in the UK market, where Shein wants to acquire a more commanding position in business, the company is also keen to expand its customer base across Europe. In May, the company opened the EMEA headquarters in Dublin to oversee the business across Europe, the Middle East, and Africa to gain higher visibility. Moreover, extending the pop-up stores in Antwerp, Barcelona, and Turin in March, followed by the one in Oxford Street, London, between September 15 and 17, proves the company’s eagerness to capture the European market.
Although Shein’s aggressive marketing strategies threaten other fashion businesses in the UK, there is optimism in the UK industry that the company’s UK expansion plans will open up new opportunities for UK manufacturers. Rumors have been floating in the air that Shein UK was toying with the idea of moving some of its production base to Leicester to improve the speed to market. Although the company ruled out the possibility, suppliers believe the issue would become dominant again after the Missguided acquisition.
