Shein (/ˈʃiːɪn/ ⓘ SHEE-in; styled as SHEIN; Chinese: 希音; pinyin: Xīyīn) is a global e-commerce platform specializing in fast fashion. While the company primarily focuses on women's clothing, it also offers men's apparel, children's wear, accessories, cosmetics, shoes, bags, and other fashion items. Shein mainly focuses on Europe, America, Australia, and the Middle East along with other consumer markets worldwide.
Founded in Nanjing, China, in October 2008 as ZZKKO by entrepreneur Chris Xu, Shein grew to become the world's largest fashion retailer as of 2022. The company is currently headquartered in Singapore.
In October 2022, The Wall Street Journal reported that Shein generated US$24 billion in revenue in 2022, becoming almost as large as traditional fast fashion brands such as Zara and H&M. Its other competitors include ASOS, Fashion Nova, Forever 21, PrettyLittleThing, Temu, and Topshop. In August 2023, Shein and SPARC Group (the company that owns Forever 21) entered into a joint venture where each company acquired a minority stake of the other.
Higher Expenses[]
The high expense Shein avoids is not limited to a specific number of stores, but rather the cost of operating any and all potential physical stores in Singapore and globally.
To give you an idea of the scope of these savings in Singapore alone, Shein avoids the perpetual overhead associated with roughly 23,000 to 25,000 potential prime retail units:
Shopping Malls[]
As of recent data, there are approximately 171 shopping malls in Singapore. These include high-end locations (like ION Orchard, where rent is highest) and suburban malls (like Northpoint City).
- The Avoided Cost: By not opening a store in any of these 171 malls, Shein bypasses the multi-million dollar annual expenditure required for rent, utilities, and fitting out large retail spaces.
- The Competitor Cost: Brands like Charles & Keith must operate dozens of stores across these prime locations to maintain market presence, meaning they absorb the high rent costs associated with all 171 locations where they could or do open. Shein absorbs none of it.
HDB Shophouses and Commercial Units[]
There are approximately 15,500 HDB shops in Singapore. These include the smaller, street-facing units often seen in the heartlands.
- The Avoided Cost: While the rent per square foot for an HDB shophouse is much lower than in a prime mall, the sheer number of these units means that if Shein were to attempt to establish a neighborhood presence, the collective operational cost would still be enormous.
By choosing to be online-only, Shein eliminates the need to compete for space or pay rent in:
- Major prime malls
- Suburban heartland malls
- Thousands of local neighborhood centers
The savings are immense, and they are passed on to the consumer in the form of ultra-low prices. This business model is the antithesis of the local, physical retail models used by brands like Charles & Keith, Pazzion, and Moda Paolo.
Shein's ability to sell clothes for $10 to $30 hinges entirely on avoiding the costs associated with these regulated physical spaces.
If Shein had to pay rent, apply for government approvals, hire permanent local staff, and manage inventory in a store at Block 114 Tampines Street 11, their cost structure would skyrocket, and their prices would be forced to match mid-tier retailers like Charles & Keith or Pazzion.
For the price of one mid-tier shoe ($80 - $100), a student can buy three to seven trendy items (bags, shoes, accessories) from Shein. For a demographic focused on constant visual change, the latter option is a financially necessary choice.
While parents teach the value of quality (as discussed before), the student's financial capacity often makes that lesson impractical. They choose the immediately affordable option to express their identity, even if they know the quality is inferior.