Shein's revenue in 2020 is $65 billion, equivalent to 1.5 Uniqlo stores;

Shein is a cross-border fast fashion e-commerce company that buys clothes in 220 countries around the world, but its headquarters is in Nanjing, China;

Shein has about 120 million registered users, ranking first in 56 countries in the Apple App Store;

Shein was founded 13 years ago, last valued at $47 billion, and has been growing at more than 100% every year. Shein is low-key because you won't see the company in almost any coverage until 2020. Everyone from the Wall Street Journal to Chinese Business weeklies missed the e-commerce giant. Although many new consumer brands have created a big topic on the Internet in recent years, it is this seemingly low-key brand that really leads the new consumer wave. Shein leads the new wave of consumption, and young girls overseas are addicted to Shein like Douyin. Shein opened its first store in Miami, and 125 people came into the store every hour in the first three days... On the surface, Shein is the online version of Zara, taking the fast fashion route. All fast fashion brands have two characteristics: one is cheap, one is fast on the new speed. Shein's popularity was first attributed to its outrageous price tag. $7 hoodies, $12 dresses, $17 jeans; Shein outperformed LAN in the new speed. In general, uniqlo takes six months to update, Zara takes 14 days, and Shein takes seven days. If you log in to Shein, the words "new 1000+ daily" are prominently displayed. Moreover, Shein's interface is more like Xiaohongshu than Taobao, with a large number of new styles + information flow interface, which can keep girls scrolling. What exactly is Shein? Cheaper than Amazon, faster than Zara, more choice than Vipshop and as indulged as Tiktok, that's Shein. The question is, how does it all work? All clothing business, the biggest pain point is: how to grasp the trend? When consumers buy a piece of clothing, they have already passed the stage of quality selection. What we value is the aesthetic temperament expressed by design, tailoring and materials. If the trend is wrong, the clothes produced will not be bought, and the unmarketable clothes will be overstocked and sold at a discount. Moreover, there is a long lead time between fashion prediction and product hitting the shelves. If the production cycle is too long, the tide will pass. The reason why fast fashion brands beat traditional clothing brands is that Uniqlo, Zara and HM have solved this problem. Fast fashion brands grasp the trend of the way is a word - copy. Pick all the hot styles of the big brands this season, and then refer to the design of the big brands for "optimization". Then, according to different design styles, they will first produce some clothing orders in small batches, put them in the store to see the sales performance, and then place additional orders to the factory for the clothes that sell well. This mode is called "quick return of small orders" in the industry. The reason why Shein's new speed catches up with Zara and other traditional fast fashion companies is that Shein has connected front-end sales and back-end factories in a digital way. First, Shein will grab the data of the whole network to predict the trend of clothing. Shein usually uses Google's Trend Finder tool to track all clothing products online and analyze the fabric, style, color, pattern and other information of clothing. At the same time, it will also grab the user's search terms on clothing. Changes in search terms plus changes in the clothing itself constitute Shein's algorithm map. In 2018, Shein reportedly used this logic to successfully predict lace in summer and cotton in India. Shein then guesses the fashion trends of the next season based on these data, and then makes a large number of orders for the goods, which are put on the shelves for sales testing. Zara can test about six items at a time, while Shein can test 30 items at a time. And burst rate in 50%, unsalable rate of 10%. Shein's APP is more like Xiaohongshu than Taobao, with a large number of new styles + information flow style products, allowing users to indulge in the ocean of buying and buying. So Shein has a lot of data on consumer behavior. Shein can then use one party's data on its own site to continuously calibrate previous third-party data. First, Shein integrates e-commerce data with factory data, allowing factories to directly add orders for popular products and adjust the output of different products. Second, let the design team modify the products that are not selling well and remix the fashion elements until they become hits. To accomplish all these, Shein needs not excellent designers, supply chain talents or e-commerce operators, but a huge team of big data and algorithms. It is said that Shein has recruited a technical team of about several hundred people in Shenzhen to be responsible for Shein's big data analysis and algorithm recommendation. As a result, Shein is more like "Douyin of clothing," a real new consumer company that uses big data and algorithms to transform traditional industries. I guess that the upcoming "Douyin E-commerce" will also refer to or even simulate Shein's business model and challenge the traditional e-commerce with Alibaba, JINGdong and Vipshop as the core. If I had to find a representative of "new" consumption, I think Shein is it. Because Shein is "new", it has found a new way to drive growth, rather than just using a new tool or optimizing a business segment. Shein may not represent a new consumer industry, but it is a clothing brand and an e-commerce platform. But there's a basic lesson to be learned from Shein: Only by innovating your business model can you become a new species. You have a chance to topple a seemingly impossible industry giant. Douyin eclipsed IQiyi Youku not because short videos are newer and better than long ones, but because Douyin short videos are essentially a technology company and IQiyi Youku is essentially a content company. Apple beat Nokia not because apple's phone is better looking and has a better experience, but because Apple is a mobile smart terminal and Nokia is still a mobile phone. In the same way, if a new consumer brand is to truly lead the consumer wave, it must find new growth-driven models, not better packaging, younger demographics, newer channels and edgier marketing. The "new" of new consumer goods should be "innovative" rather than "old and new". In my view, there are three things that distinguish truly new and traditional consumer goods:

Unidirectional vs. bidirectional channels

Dot vs. mesh

Buying traffic vs. generative traffic One-way channel VS two-way channel This new consumption wave is more like a big explosion of new consumer categories, with many small and rare consumer categories popping up. Like these: A. Hair and makeup B. Fashion makeup for girls C. Coconut light Aromatherapy skin care E. Oriental fragrance F. Sleep environment brand Countless new consumer products emerge, most of which tend to keep consumers fresh for a while and fade after a year or two. The new consumer goods are like the idol trainees of that year, and the idols of that year are regarded as "annual cast idols" by their fans. The fate of most new consumer goods is the same as idol, become our annual sales products. This is a big challenge for us to start a business, that is, it is difficult for us to grasp consumer demand. "Hard to grasp" does not mean that we cannot discern consumer needs, but that consumers' "demand cycles" are becoming shorter and their "demand types" more fragmentary. In my opinion, it is hard for the next Wong Lo Kat and six walnuts to emerge at present, and it is hard for enterprises that rely on large single product strategy to succeed today. In those days, when Wong Lo Kat launched herbal tea, there were only imitators and no competitors trying to innovate the category of herbal tea. But now? An entrepreneur may have just developed a lime tea, and soon there will be a variety of flavor innovations: sweet lime, fragrant lime, green lime, hand whipped lime... In other words, the lead time brought by "category innovation" is getting shorter and shorter. The presence of imitators is not necessarily a bad thing, it shows that the category is promising, and the more players come in, the sooner the market ripens. What's really scary is that more "category innovation" keeps popping up, making your new category suddenly old and less unusual. As requirements iteration speeds up and product life cycles shorten, traditional business models begin to weaken. In the past, consumer goods entrepreneurship is to produce their own products, and then put the products in the store, and then through advertising and marketing for consumption tips, and finally when consumers use the after-sales service. The traditional business chain goes like this: The biggest problem with this business chain is that it is a one-way road. If any link fails, the rest cannot be sustained. In the current consumer environment, a new product may just be introduced to jiangsu and Zhejiang markets, but even before it starts to spread nationwide, there will be more innovative products. We start to question ourselves, should we continue with the product we have, or should we introduce the newer product? Again, we pull back to Shein's business model. Shein's business chain has not changed, but what is different is that the traditional business chain is a "one-way channel", while Shein's business chain is a "two-way channel". In Shein's business chain, the sales end can provide data feedback to the production end, so that the production end can better control the ever-changing needs of users. What is the biggest difference between a one-way channel and a two-way channel? The "one-way channel" business model can only pursue a "static" business model. The "two-way channel" because of continuous data feedback, so its product, selection, sales mode, service mode, can be based on the client data of continuous iteration, is a "dynamic" business model. You may think that Shein can do this because it is essentially an e-commerce platform rather than a consumer product, and it belongs to the clothing industry and has many SKUs. But let's recall whether the entrepreneurial logic of Yuanqi Forest is somewhat similar to Shein's logic. Each media once advocated that Yuanqi Forest is "making products just like making apps" : it will first launch A series of products in different categories or different flavors of the same category, and then take them to the regional market for A/B test. Whichever product and flavor can stand out, it will push forward in the future. The big difference between this approach and traditional business, where decisions are made entirely by people, is that we rely directly on data feedback and market effects to make decisions. But Yuanqi Forest does not have its own stores, nor does it have its own e-commerce platform, and its grasp of big data and algorithms is much worse. The essence of "two-way channel" is to digitize offline services. Let the user's consumer behavior into data, fast feedback to the production and marketing end, forming a decision-making loop. Dot brand VS mesh brand The vast majority of new consumer products don't have brands at all, they just look good. The design of product packaging is good-looking, and the brand words are written with a sense of network. This is not called a brand, but a "skin". A lot of traditional consumable is vulgar mediocre, a lot of new consumable is beautiful mediocre, both do not have how many difference. Is there a difference in the way new consumer goods are branded versus traditional consumer goods? Traditional consumer goods follow the pattern of finding an identity for a brand and then occupying it by penetrating the consumer's mind through saturation advertising. I call this kind of brand "point brand", because the real valuable asset of a brand is almost a slogan, which the brand tries to pin into the heart of consumer goods in communication. Traditional brands believe in "domineering", I don't care whether you like me or not, as long as I can occupy your attention, you can only hold me in your life. But this approach is becoming less effective today, as "centralised media" is dying and all media is evolving towards "a thousand faces". Brands, especially new brands, should not attempt to dominate the minds of consumers, without the environment and budget. The new generation of brand, can no longer believe in "domineering", to believe in "king's way". "Hegemony" and "kingship" may both be able to establish a state, but the difference is that "hegemony" can not care about the people, while "kingship" depends on the people to win the world. Therefore, the current brand building is not to occupy the user's mind, but to create the possibility of "being linked". Let users sincerely support your brand, in order to achieve great achievements. From "occupy" to "be linked", the brand of play to change.