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Shein-vs.-Zara -Digital-transformation-in-the-fast-fashion-industry

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SHUQING LUO GUOLI CHEN

SHEIN VS. ZARA: DIGITAL TRANSFORMATION

In the fast-fashion industry.

In May 2021, SHEIN (pronounced Shee-in) overtook Amazon as the most downloaded shopping app on the US iOS and Android app stores. This was a remarkable achievement, especially in the highly competitive apparel industry. SHEIN’s clothing had Instagram-style [see Exhibit 1], and its growth posed a challenge to Zara and H&M, the leading players in the fast-fashion space.

Despite SHEIN’s success, most Americans over the age of 30 had not heard of the brand. 1 Most Chinese were also unaware of it—despite it being a Chinese company. Unlike other well-known Chinese brands (Alibaba, Huawei, or Tencent) that grew big in the domestic market before venturing overseas, SHEIN had no market presence in China. All its sales were generated overseas.

The lack of name recognition was partially because SHEIN only existed in the virtual world, unlike Zara, JC Penny, or Nordstrom that operated many brick-and-mortar stores. SHEIN’s low-profile media strategy was also a contributing factor. Its leadership team had not given any interviews to Chinese or foreign media.

But with a series of recent articles in the Wall Street Journal and the Financial Times on this Chinese apparel maker in mid-2021, SHEIN became much better known among the traditional media and the business community. Questions including “How can a Chinese player quickly emerge from this competitive space?” and “What is the role of digitization in its business model?” were raised. Simultaneously, potential issues about SHEIN were also exposed to the public. These issues related to product quality, potential environmental impact, and sustainability. In addition, SHEIN’s success attracted imitators that used a similar business model. What should SHEIN’s next step be to maintain its competitive advantages and continue its future growth?

1 Simon Fuller, “How Trump’s trade war built SheIn, China’s first global fashion giant,” Bloomberg, 14 June 2021, bloomberg/news/articles/2021-06-14/online-fashion-giant-shein-emerged-from-china-thanks-to-donald- trump-s-trade-war, accessed 20 November 2021.

Dr. Shuqing Luo of The University of Hong Kong and Professor Guoli Chen of INSEAD prepared this case for class discussion. This case is not intended to show effective or ineffective handling of decision or business processes. The authors might have disguised certain information to protect confidentiality. Cases are written in the past tense, this is not meant to imply that all practices, organizations, people, places or fact mentioned in the case no longer occur, exist or apply.

© 2021 by The Asia Case Research Centre, The University of Hong Kong. No part of this publication may be digitized, photocopied or otherwise reproduced, posted or transmitted in any form or by any means without the permission of The University of Hong Kong. Ref. 21/718C

Last edited: 9 December 2021

21/718C SHEIN vs Zara: Digital Transformation in the Fast-Fashion Industry

Origin of SHEIN

Chris Yangtian Xu from Nanjing, Jiangsu Province, created SHEIN (initially called SheInside) in 2008 as a cross-border e-commerce company that sold wedding dresses. Specifically, SHEIN sold the dresses to US consumers due to the product’s high profit margin: the price of a comparable wedding dress in the US was USD1,000, while SHEIN could sell them for USD and earn a reasonable margin, due to the supply chain and cost advantages in China. Initially the company quickly became profitable.

At that time, SHEIN sourced its products from China’s wholesale clothing market in Guangzhou (southern part of China, close to Hong Kong)—a region where many Chinese garment factories were located. Originally it sold directly to overseas shoppers without involving itself in any design, branding, or manufacturing.

But the founder, Xu, quickly realized that such a business model did not have any entry barriers, making it unsustainable. So, he decided to build his brand by establishing SHEIN’s own independent website rather than selling its products on a third-party platform, such as Amazon. Having its own platform enabled SHEIN to attract, collect, manage, and analyze consumer data. This strategic shift reflected Xu’s background: Xu had started his career not in the fashion industry, but in the branding and search-engine-optimization sector of a digital marketing company.

After deciding on his strategic direction, Xu invested RMB2mn (about USD295,000) 2 to have professional web-design companies develop a website for SHEIN, SheInside. In addition to its core market in the US, SHEIN quickly entered Europe. In 2010, SHEIN came to Spain, the home country of ZARA—the creator of the fast-fashion industry. In 2012, it launched its website in France. In 2013, it launched Russian and German websites. In 2014, it entered Italy.

That same year, Xu shortened the domain name from SHEINSIDE to SHEIN. This rebrand made SHEIN more memorable and searchable for shoppers.

SHEIN continued to expand. In 2015, it entered the Middle East, where foreign companies did not typically understand the female apparel market well. But one year after entry, SHEIN’s sales in the Middle East reached RMB200mn. 3 In 2021, it ranked among the top-three shopping apps in Saudi Arabia and the UAE, the two main markets in the Middle East. 4

SHEIN also expanded to Southeast Asia, with a regional hub based in Singapore. This region, together with the US, Europe, and the Middle East, became SHEIN’s main markets. In 2021 it served more than 200 countries and regions worldwide with a cross-border e-commerce business model.

SHEIN started with the humble beginnings of a “dropshipping” model and developed into a truly global company by 2021, hiring experts in marketing and business development, logistics, supply chain, warehousing, global operations, branding, designers, and more importantly, data scientists, algorithms, software, and cloud engineers.

By 2021, SHEIN had positioned itself as “an international B2C fast fashion e-commerce platform” that focused on women’s wear, but also offered men’s apparel, children’s clothes,

2 Approximately USD 295,000, based on an average exchange rate in 2010 (1 USD = 6 RMB). 3 Approximately USD 30 million, based on an average exchange rate in 2016 (1 USD = 6 RMB). 4 Similarweb, similarweb/apps/top/google/store-rank/ae/shopping/top-free/, accessed 20 November 2021.

sales systems, interactions with customers, and analysis of data on shopping habits. Zara substantially reduced the fashion production cycle—including design, manufacturing, and shipping—to three weeks. The quick turnaround time and flexible supply chain model enabled Zara to launch around 12,000 new designs annually compared to a couple hundred of products by traditional fashion players. Ultimately, fast fashion was more agile and responsive. Zara designed its system to ensure that new products would refresh its stores at high frequency, supporting the fast-fashion image and attracting customers to regularly visit the stores. In addition, frequent la unches of new products in small batches kept inventories at a minimum and reduced judgment errors on fashion trends and, thus, end-of-season markdowns. This efficiency and flexibility reduced the total cost of Zara’s products and allowed it to offer more accessible prices to its consumers.

Despite Zara’s successes, SHEIN was able to launch more than 150,000 new items in 2020— about 10 times more than Zara, according to Daxue Consulting’s report. 8 SHEIN completed the design and production cycle in around one week, with its speed of launching new designs continuing to accelerate. In March 2021, its women’s clothing category had an average of 2, new products per day. Compared to previous fast-fashion companies, such as Zara and H&M, SHEIN became the “ultra-fast,” 2 version of fast fashion. Additionally, through its online presence, SHEIN reached millions of young shoppers directly via social media without a physical retail space. SHEIN relied on search traffic and customer data to foreshadow trends.

Products from fast-fashion brands like Zara were not expensive—a basic dress from ZARA cost USD30 to USD40. However, a similar dress on SHEIN could cost less than USD10. In addition, SHEIN provided a more diverse range of styles with more colors and patterns to choose from. Consumers could easily buy an entire outfit, with accessories and shoes included, for less than USD30 on SHEIN. Its website included special categories that helped customers find the cheapest deals, such as tops under USD5; dresses under USD9, and clearance items under USD5 [see Exhibit 1]. Its low prices inspired social media users to post and share about the brand. Twitter users posted that spending USD280 on SHEIN could create 365 outfits, enough for a whole year [see Exhibit 2]; TikTok users shared videos of their affordable clothing hauls after receiving their package from SHEIN [see Exhibit 3].

SHEIN frequently offered discounts at the end of a season when purchasing through a key opinion leader’s (KOL) link or special promotion or even from downloading the app. These discounts, on top of the original low price, attracted new buyers and helped build a large customer base. This created a self-perpetuating cycle where, given the high demand, SHEIN produced in bulk and further lowered costs and prices.

Because the price of each piece was so low, customers became less sensitive to their total spending per order. Based on data in June 2021, SHEIN’s daily total shipment was about 1 million packages, with each order totaling USD70, on average.

SHEIN’s main customers were females aged 15 to 35. SHEIN’s most important customer group was Gen Z. A 2020 survey of 9,800 American teenagers (~15 years old) found that SHEIN had surpassed Amazon as the respondents’ most popular online clothing store. 9 Gen Z

8 Daxue Consulting, “SheIn’s market strategy: How the Chinese fashion brand is conquering the West,” 26 July 2021, daxueconsulting/shein-market-strategy/, accessed 20 November 2021. 9 Wu Duidui, “SHEIN 䎉䁜㿤儝墩焪䢙栠倐脗䁖”, 蘷䰮䃯 App, 21 February 2021,

baijiahao.baidu/s?id=1692267100622778650&wfr=spider&for=pc, accessed 20 November 2021.

consumers were the most frequent users of social media platforms, where they sought fashion trends and unique styles to get the attention from their peers; however, they were also a generation with tight budget constraints. These young and price-sensitive customers did not require long-lasting professional clothes. SHEIN’s products—affordable, fashionable, and diverse—were a perfect fit.

SHEIN had a wide range of products on its website or apps that made online shopping more enjoyable. 10 With daily new releases and changing products, customers could be surprised by new fashion finds and were therefore encouraged to frequently revisit its website for the latest clothing drops.

A Google Trend keyword search on SHEIN in the US revealed that its top-five consumer bases resided in the states of Mississippi, West Virginia, Kentucky, South Dakota, and Alabama [see Exhibit 4]. By contrast, the top five states in the search index for its biggest competitor, Zara, were Washington, DC; New York; New Jersey; California; and Washington.

Marketing and Branding

SHEIN collaborated with well-known musicians including Katy Perry, Nick Jonas, Lil Nas X, and Tinashe on concerts and events. It also sponsored key influencers such as Addison Rae and created capsule collections with D-list reality TV stars like The Bachelor’s Hannah Godwin and The Only Way Is Essex’s Amber Turner.

In addition, SHEIN continuously increased its brand awareness and cemented its reputation with the public. Gen Z shoppers promoted the brand through unsponsored clothing hauls and outfit posts on social media. This attracted other Gen Z consumers who were trying to discover fashion brands on social media. Thus, SHEIN actively leveraged TikTok, Instagram, and YouTube channels in its marketing campaigns.

Customers and influencers were interchangeable in SHEIN’s marketing and promotion schemes. Customers could also join SHEIN’s affiliate programs. After joining, they could get a 10% to 20% commission on each referred sale, an extra monthly cash bonus by sharing promotions, and new monthly profitable activities. The straightforward process consisted of four steps: (1) promotion of SHEIN on social media; (2) potential customers clicked on the posts; (3) the client placed an order; (4) the influencer received commissions.

For instance, on TikTok, SHEIN attracted fashion bloggers supporting its brand and posting with the hashtag SHEIN. In addition to earning commissions on sales directed to its website, these influencers got free products every month for their posts. In July 2021, a crowd favorite was SHEIN’s cross-wrap crop top—a USD13 garment that resembled a halter top, but with a strategically placed cutout that revealed extra cleavage.

SHEIN also created an environment where shoppers felt smart after finding the perfect outfit in style for a low price. 11 The wide range of items sold and the fact that not everything was always in stock created an experience of “treasure hunting.” Gen Zers were happy to record videos on how they found these treasures. They unpacked their clothes and tried them on. They posted videos of this process on social media such as YouTube and TikTok, which attracted more customers and fans to SHEIN.

In addition, SHEIN positioned itself as a community for fashion enthusiasts by encouraging its customers to share their purchases on social media. As of July 2020, over 900,000 posts on

10 Daxue Consulting, “SheIn’s market strategy: How the Chinese fashion brand is conquering the West.” 11 Daxue Consulting, “SheIn’s market strategy: How the Chinese fashion brand is conquering the West.”

SHEIN asked its suppliers to commit to making 100 or fewer items per batch every week (from prototype to production) so that it could quickly test the products in the market. Only when the product proved to maintain market demand was there an increase in production. In comparison, Zara’s minimum batch size was about 300 to 500 pieces, and it took two to three weeks from prototype to production. 16

The initial small-size production and the improved demand prediction allowed SHEIN to avoid major product launching mistakes and inventory glut—the most common problem in the apparel industry.

Initially, few factories were willing to take the risk of making small batches of products. Unlike many other apparel companies, SHEIN did not work with large factories that would have bigger bargaining power due to a lower production cost per piece. Instead, SHEIN paired with small to midsize workshops that picked up orders daily. This system was synonymous with Uber: factory owners would receive new orders from their phones and then production would take place.

SHEIN spent years cultivating relationships with the Chinese garment factories and manufacturers. To get its suppliers’ support, SHEIN subsidized production of small batches to guarantee profit for the factories. SHEIN also developed a reputation for timely payment to its factories, which was rare in the apparel industry in China.

Despite SHEIN’s exponential growth in the previous few years, there were several concerns and criticisms of the company and its business model.

First, consumers were often concerned with product quality. Some customers expressed their frustration on forums. For example, on Trust Pilot, 43% of people rated the brand as “bad.” In addition, YouTube review videos showed SHEIN products that were the wrong size or the wrong fit.

SHEIN was also criticized for products that were culturally inappropriate and insensitive. For instance, its website sold necklaces with a Buddhist swastika pendant or a Muslim prayer mat as a decorative rug. The backlash that ensued led the company to issue numerous apologies.

One of the biggest questions consumers raised was how SHEIN could possibly make money, given the affordable price of products and free services (shipping and return). Some suggested that this could be due to: (1) The clothing industry’s historically high gross margins led to potential room for SHEIN to improve the process, save costs, and offer consumers its surplus. (2) No costs for operating physical stores. Clothing packages were also light [see the Exhibit 5 ], therefore making the shipping cost manageable. (3) Shipping directly to consumers saved the cost of a middleman.

Another controversial aspect of SHEIN was the transparency of company disclosures. As a private company, SHEIN and its top management team maintained a low profile until premier media outlets, such as the Wall Street Journal and the Financial Times, published a series of articles on the company. Unlike Zara and H&M, which disclosed detailed background on the sourcing of their clothing and the working conditions of employees on their websites and in annual reports, SHEIN gave no details about the manufacturing process of its products.

16 㾜壈䌨䳬, yibencezi/notes/123043, accessed 20 November 2021.

Although SHEIN provided a clear social responsibility statement against child labor on its website, many consumers were still skeptical about its business practices due to the company’s lack of transparency about its activities.

Furthermore, many people addressed concerns about the environmental impact caused by the fast-fashion industry—one of the most resource-intensive industries. 17 Critics claimed that SHEIN’s business model drove overconsumption and environmental destruction. The global fashion industry generated about 4% to 10% of total greenhouse gas emissions—more than all international flights and maritime shipping combined. According to the World Bank, the fashion industry used 93 billion cubic meters of water every year—an amount that 5 million people could consume instead. 18 As SHEIN grew, it would receive additional pressure and criticism from its various stakeholders.

Like other Chinese brands, such as Huawei and TikTok, SHEIN faced political risks in the international market. India, for example, had banned the SHEIN app along with a ban on 59 Chinese mobile apps in June 2020. Though the company managed to relaunch in India with Amazon as its platform seller, it did not have a separate e-commerce platform as of July 2021. 19 Even without the policies of Donald Trump, geopolitical uncertainties between China and the US—SHEIN’s main consumer market—were expected to remain. 20

Finally, the exponential growth of SHEIN in 2020 and 2021 could largely be attributed to the global pandemic, as customers could not shop in physical stores due to lockdown policies. 21 Until the pandemic settled and people began to resume a pre-pandemic lifestyle, with physical shopping, it was unclear if SHEIN could continue to grow.

Looking Forward

Despite these challenges, SHEIN’s top executives needed to grasp future opportunities.

First, in the retail industry, online and off-line integration had increased. The online retail giant Amazon started operating various physical stores, from booksellers to cashier-less convenience stores. Alibaba experimented with its Hema Fresh stores, which integrated technology with traditional grocery shopping. Retail giants such as Walmart and Zara entered the e-commerce industry in the US.

SHEIN was clearly considering its lack of a permanent physical presence in its bid on iconic British clothing retailer Topshop. Although it lost to ASOS Plc’s GBP295mn (approximately USD390mn) offer, the act showed a possible shift away from an online-only model. Should SHEIN explore the potential of a physical presence and become a player in both online and off- line?

17 Simon Fuller, “How Trump’s trade war built SheIn, China’s first global fashion giant,” Bloomberg, 14 June 2021, bloomberg/news/articles/2021-06-14/online-fashion-giant-shein-emerged-from-china-thanks-to-donald- trump-s-trade-war, accessed 20 November 2021. 18 Mark Greeven and Yunfei Feng, “Commentary: Chinese fashion giant SheIn has taken over the world. It has just met its match.” 19 FP Staff, “Explained: As SheIn returns to India following 202 ban, a look behind the company’s meteoric rise,” Firstpost, 15 July 2021, firstpost/living/explained-as-shein-returns-to-india-following-2020-ban-a-look-behind-the- companys-meteoric-rise-9808111, accessed 20 November 2021. 20 Frederick Kempe, “We’re at the perilous beginning of an uncertain era in US-China relations,” Atlantic Council, 17 October 2021, atlanticcouncil/content-series/inflection-points/american-partners-fret-over-growing-us-china- uncertainty/, accessed 20 November 2021. 21 Mark Faithfull, “Is SheIn a mysterious 15 billion fast-fashion retailer ready for stores” Forbes, 10 February 2021, forbes/sites/markfaithfull/2021/02/10/shein-is-chinas-mysterious-15-billion-fast-fashion-retailer-ready-for- stores/?sh=65169c7d6df5, accessed 20 November 2021.

EXHIBIT 1 SCREENSHOT CAPTURE FROM SHEIN APP

Note: USD = SGD1 on 1 December 2021.

Source: Screen capture by the case writers.

EXHIBIT 2: SHEIN MENTIONED BY TWITTER USERS

Source: Guapmama (@tweetshaeee), “280 on Shein is about 365 outfits. She smart,” Twitter, 7 July 2021, 2:27 a., twitter/tweetshaeee/status/1412478506940784641.

EXHIBIT 4: COMPARISON OF SHEIN AND ZARA FROM GOOGLE TRENDS

Keyword search trends over time (SHEIN – blue; Zara – Red)

Keyword search based on different states (SHEIN – blue; Zara – Red)

Source: Compiled by the case writers from Google Trends data.

EXHIBIT 5: SHEIN – CLOTHING PACKAGES

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Course : Strategy and Competition (COMM 401)

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Free SHEIN vs. Zara: Digital transformation in the fast-fashion industry Case Study Solution | Assignment Help

Harvard Case - SHEIN vs. Zara: Digital transformation in the fast-fashion industry

"SHEIN vs. Zara: Digital transformation in the fast-fashion industry" Harvard business case study is written by Shuqing Luo, Guoli Chen. It deals with the challenges in the field of Strategy. The case study is 14 page(s) long and it was first published on : Dec 12, 2021

At Fern Fort University, we recommend that SHEIN leverage its existing strengths in digital transformation and supply chain management to further solidify its position as a leading player in the fast-fashion industry. This can be achieved by implementing a multi-pronged strategy focused on innovation , global expansion , and sustainable practices .

2. Background

This case study examines the competitive landscape of the fast-fashion industry, focusing on the contrasting approaches of SHEIN and Zara. SHEIN, a Chinese e-commerce giant, has rapidly gained market share through its disruptive business model built on low prices , fast turnaround times , and data-driven product development . Zara, a Spanish retailer known for its vertical integration and in-house design , has long been a leader in the industry, adapting to the digital age through online channels and customer-centric strategies .

The case highlights the challenges and opportunities presented by the evolving industry dynamics, including increasing competition , shifting consumer preferences , and growing concerns about environmental sustainability .

3. Analysis of the Case Study

SWOT Analysis:

Strengths: Strong online presence, agile supply chain, data-driven approach, low prices, diverse product offerings.
Weaknesses: Limited brand recognition in some markets, potential for quality concerns, reliance on third-party manufacturers, negative environmental impact.
Opportunities: Expansion into new markets, development of own-brand manufacturing, investment in sustainable practices, strengthening brand image.
Threats: Increasing competition from established players and emerging startups, consumer backlash against fast fashion, regulatory scrutiny of labor and environmental practices.
Strengths: Strong brand recognition, vertically integrated supply chain, focus on quality and design, established global presence.
Weaknesses: Slower product development cycle compared to SHEIN, reliance on physical stores, potential for higher prices.
Opportunities: Further development of online channels, expansion into new markets, diversification of product lines, investment in technology and analytics.
Threats: Growing popularity of online retailers like SHEIN, changing consumer preferences towards fast fashion, economic downturns impacting discretionary spending.

Porter's Five Forces:

Threat of New Entrants: High, due to low barriers to entry and the rise of e-commerce platforms.
Bargaining Power of Suppliers: Moderate, as SHEIN and Zara rely on a network of suppliers, but they also have the potential to develop their own manufacturing capabilities.
Bargaining Power of Buyers: High, as consumers have a wide range of options and are increasingly price-sensitive.
Threat of Substitute Products: High, as consumers can choose from a variety of clothing options, including secondhand and sustainable brands.
Competitive Rivalry: Intense, with numerous players vying for market share and constantly innovating to stay ahead.

Value Chain Analysis:

Both SHEIN and Zara have optimized their value chains to achieve their respective competitive advantages. SHEIN focuses on efficient logistics , data-driven product development , and low-cost manufacturing . Zara, on the other hand, emphasizes vertical integration , in-house design , and fast turnaround times .

Business Model Innovation:

SHEIN's success can be attributed to its disruptive business model , which leverages technology and analytics to create a highly efficient and responsive supply chain . This model, based on fast fashion principles , allows SHEIN to offer trendy products at competitive prices, catering to the needs of a digitally savvy consumer base.

4. Recommendations

SHEIN should pursue a multi-pronged strategy to maintain its competitive advantage and achieve sustainable growth:

Accelerate Digital Transformation:

Enhance online platform: Improve user experience, personalize recommendations, and integrate social media features.
Expand data analytics capabilities: Leverage AI and machine learning for product forecasting, inventory management, and customer segmentation.
Develop mobile-first strategies: Optimize website and app for mobile devices, offering seamless shopping experiences.

Global Expansion:

Target new markets: Identify emerging markets with high growth potential and adapt products and marketing strategies accordingly.
Explore strategic alliances: Partner with local retailers or influencers to expand brand reach and market penetration.
Develop local sourcing strategies: Consider establishing manufacturing facilities in key markets to reduce shipping costs and improve responsiveness.

Embrace Sustainability:

Invest in sustainable materials: Explore eco-friendly alternatives to traditional fabrics and reduce reliance on harmful chemicals.
Implement ethical sourcing practices: Ensure fair labor conditions and environmental standards throughout the supply chain.
Promote transparency: Communicate sustainability initiatives to consumers and build trust through responsible practices.

Strengthen Brand Management:

Develop a clear brand identity: Define core values and messaging that resonates with target audiences.
Invest in marketing and advertising: Utilize social media, influencer marketing, and targeted advertising campaigns to reach new customers.
Build brand ambassadors: Engage with key influencers and create authentic partnerships to promote positive brand associations.

5. Basis of Recommendations

These recommendations are based on a thorough analysis of SHEIN's strengths, weaknesses, opportunities, and threats, considering the competitive landscape and evolving consumer preferences. The recommendations are aligned with SHEIN's core competencies in digital transformation , supply chain management , and innovation . They also address the need to expand into new markets , improve sustainability practices , and strengthen brand image .

The recommendations are supported by the following:

Quantitative measures: Increased market share, improved customer satisfaction, reduced environmental impact, and enhanced brand value.
Assumptions: Continued growth of the online fashion market, increasing consumer demand for sustainable products, and evolving technological advancements.

6. Conclusion

SHEIN's success has been driven by its disruptive business model and digital transformation strategy . However, the company faces significant challenges in a rapidly changing industry. By focusing on innovation , global expansion , and sustainability , SHEIN can solidify its position as a leading player in the fast-fashion industry and achieve long-term success.

7. Discussion

Alternative strategies include:

Mergers and acquisitions: Acquiring established brands or retailers to gain access to new markets and customer bases.
Vertical integration: Developing in-house manufacturing capabilities to control quality and reduce reliance on third-party suppliers.

Risks and Key Assumptions:

Increased competition: New entrants and existing players may intensify competition, requiring SHEIN to adapt and innovate continuously.
Consumer backlash: Negative publicity regarding labor practices or environmental impact could damage brand reputation and sales.
Regulatory scrutiny: Governments may introduce stricter regulations on fast fashion, impacting SHEIN's operations and profitability.

8. Next Steps

Develop a comprehensive digital transformation strategy: Define key initiatives, timelines, and resource allocation.
Identify and prioritize target markets for global expansion: Conduct market research and develop tailored strategies for each market.
Establish a sustainability roadmap: Define goals, metrics, and action plans for reducing environmental impact and promoting ethical sourcing.
Implement a robust brand management program: Develop brand guidelines, marketing campaigns, and influencer partnerships.

By taking these steps, SHEIN can effectively navigate the complexities of the fast-fashion industry and achieve its strategic goals.

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Case Description

In May 2021, SHEIN overtook Amazon as the most downloaded shopping app on the US iOS and Android app stores. During the pandemic in 2020, SHEIN achieved substantial sales growth and is now catching up with the fast-fashion giant Zara. This case first briefly discusses the apparel and fast-fashion industry and the creation of the fast-fashion model by Zara. Then it covers SHEIN's historical development and its "fast-fashion 2.0" business model-using big data and algorithms to identify customers and their preferences. The case also discusses various perspectives of SHEIN's business operations: products and pricing, marketing and branding, and supply chain management. The case further discusses several challenges that SHEIN faces: product quality, transparency of company disclosure, environmental impact, and geopolitical risk. In the last section, the case presents several options that SHEIN may be able to pursue in the future. The case is suitable for MBA, EMBA, and undergraduate students who are interested in competitive strategy, technology or digital strategy, innovation, blue ocean strategy, China strategy, global strategy (cross-border e-commerce), and the fashion industry. The case can be used in core strategy courses at different levels, as it covers various topics.

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Referrences & Bibliography for Harvard Stategy Case Study Analysis & Solution

1. Andrews, K. R. (1980). The concept of corporate strategy. Harvard Business Review, 61(3), 139-148. 2. Ansoff, H. I. (1957). Strategies for diversification. Harvard Business Review, 35(5), 113-124. 3. Brandenburger, A. M., & Nalebuff, B. J. (1995). The right game: Use game theory to shape strategy. Harvard Business Review, 73(4), 57-71. 4. Christensen, C. M., & Raynor, M. E. (2003). Why hard-nosed executives should care about management theory. Harvard Business Review, 81(9), 66-74. 5. Christensen, C. M., & Raynor, M. E. (2003). The innovator's solution: Creating and sustaining successful growth. Harvard Business Review Press. 6. D'Aveni, R. A. (1994). Hypercompetition: Managing the dynamics of strategic maneuvering. Harvard Business Review Press. 7. Ghemawat, P. (1991). Commitment: The dynamic of strategy. Harvard Business Review, 69(2), 78-91. 8. Ghemawat, P. (2002). Competition and business strategy in historical perspective. Business History Review, 76(1), 37-74. 9. Hamel, G., & Prahalad, C. K. (1990). The core competence of the corporation. Harvard Business Review, 68(3), 79-91. 10. Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard--measures that drive performance. Harvard Business Review, 70(1), 71-79. 11. Kim, W. C., & Mauborgne, R. (2004). Blue ocean strategy. Harvard Business Review, 82(10), 76-84. 12. Kotter, J. P. (1995). Leading change: Why transformation efforts fail. Harvard Business Review, 73(2), 59-67. 13. Mintzberg, H., Ahlstrand, B., & Lampel, J. (2008). Strategy safari: A guided tour through the wilds of strategic management. Harvard Business Press. 14. Porter, M. E. (1979). How competitive forces shape strategy. Harvard Business Review, 57(2), 137-145. 15. Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. Simon and Schuster. 16. Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. Free Press. 17. Prahalad, C. K., & Hamel, G. (1990). The core competence of the corporation. Harvard Business Review, 68(3), 79-91. 18. Rumelt, R. P. (1979). Evaluation of strategy: Theory and models. Strategic Management Journal, 1(1), 107-126. 19. Rumelt, R. P. (1984). Towards a strategic theory of the firm. Competitive Strategic Management, 556-570. 20. Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533.

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