How SHEIN could become the Youtube of Fashion.
When Zalando held its big strategy update event last month, the two co-CEOs talked extensively about their B2B service ZEOS - the “Zalando Ecommerce Operating System”, which provides a streamlined e-commerce service to other companies. It helps with everything that needs to be done with products that have already been produced: storing them, putting them in boxes and shipping those to customers, handling returns, providing data insights, and so on.
This all makes perfect sense, but does it represent the full spectrum of B2B e-commerce services that companies like Zalando or Amazon can provide?
Maybe newcomer SHEIN can show that there is more: it will soon make its entire supply chain available as a service!
SHEIN Pop-Up Store in Hamburg, March 2024.
From The Wall Street Journal, March 20, 2024:
Shein to Market Its Unique Supply-Chain Technology to Global Brands.
(…)
„Shein would make its supply-chain infrastructure and technology available to outside brands and designers, allowing them to leverage Shein’s system for testing out new fashion items in small batches and track how popular they are with consumers.“
SHEIN's main competitive advantage is its holistic ERP system: a fully integrated IT infrastructure connecting the consumer front-end (aka the SHEIN mobile app) to the last element of the supply chain. Such a system, called C2M (Consumer to Manufacturer), comes with a huge cost advantage, because it avoids the oversupply problem that traditionally plagues the entire fashion industry. But it also allows SHEIN to produce a wide variety of products in very small quantities, giving them tremendous flexibility in terms of the range of merchandise they offer.
And now SHEIN will make this complete C2M supply chain available as a service. Sounds intriguing, doesn't it?
But why not take it a step further and use it to turn SHEIN into the Youtube of fashion: give creators from all over the world the opportunity to monetize their creativity like Youtube does—only instead of uploading videos, they upload fashion designs and let SHEIN do the rest.
SHEIN already has a kind of incubator program called Shein X that gives some emerging designers access to its technology. How about scaling this up and making it a core part of its business?
SHEIN's biggest challenge: They must constantly introduce new designs to keep the system running. Up to 10,000 a day! Very similar to YouTube's challenge of finding new video content every day.
Crowdsourcing this in the same way that YouTube has crowdsourced its content creation could be a great solution to make it work in the long run— without copying/stealing designs.
And because of the highly efficient C2M system, these creations would not have to be ridiculously cheap. In fact, they could probably be produced under acceptable working conditions and sold at a reasonable price, with a fair cut for the creator.
Like Youtube is today (used to be?), SHEIN could become an interesting way for creative people to earn a living. It might even help SHEIN with some of its current regulatory issues...
What do you think of this idea? Should SHEIN give it a try?
Do you want to know more about relevant retail trends in China (like Discovery-driven E-Commerce, Social Retail or C2M) and what Western companies do to counter and use them?
Then check out this special section on my website: Re-Thinking E-Commerce
