In such an environment of brands going overseas, how did SheIn target the sinking market and swept the overseas market with fast fashion? How does the growing SheIn build its own moat? What is DTC mode? How to do DTC brand overseas value-added services? Big data selection, low price attack In 2009, Xu Yangtian discovered the business opportunities of cross-border e-commerce and began to do cross-border e-commerce.
It mainly deals in wedding dresses, but because the audience of wedding dresses is relatively small and the category is special, it is difficult to expand sales. In 2012, Xu Yangtian began to pay attention to overseas women's clothing and founded SheIn. And aiming at the sinking market in Europe and the United States, focusing on fashion and low-cost items. Young people love beauty, and most young people cannot refuse high-quality and inexpensive products.
In the clothing selection of SheIn website, SheIn summarizes the current popular elements, styles and prices according to the hot-selling products sold on different retail clothing websites. After determining the style, design and make with combined elements. According to different countries, SheIn also has different design principles.
As a major customer of Google, SheIn combines big data and Internet celebrity economy to discover popular elements and fabrics in different countries and create styles. Traditional clothing manufacturing follows the opening cycle of clothing, and it usually takes about 3 months for a piece of clothing to go from design to sale. After mass production is put on the market, there are often mistakes in trend forecasting, resulting in some products being unsalable, and brands facing inventory pressure. SheIn, like Zara, uses small batch customization. That is to say, there is only a small amount of one style at a time. Through the back-end data feedback, the popular styles are calculated, and then production continues, avoiding inventory pressure. On the other hand, it successfully grasps the trend that consumers love.
A Zara garment takes about 14 days from design to production. In some domestic factories, even ten small orders can be sampled and produced, not to mention that SheIn has established its own supply chain. Relying on a strong domestic supply chain, SheIn shortened this time to 7 days. And because there are no offline stores, SheIn updates more frequently and has less inventory pressure. Last year, SheIn released 150,000 new products throughout the year, with an average of tens of thousands of new products per month. It only took one or two months to catch up with Zara's annual new product sales. And it's accelerating.
In the past month, SheIn has launched an average of 2,000 new styles per day in the womenswear category alone. Such a high frequency of new products and low prices have won SheIn's overseas market. With the development and growth of SheIn, SheIn is striving to build its own brand matrix and build its own moat through diversification. The so-called moat means that a company must have a sustainable competitive advantage. They are like a wide moat outside a castle, with crocodiles cruising inside, protecting businesses from competition. For brands, there must be a continuous cumulative effect, expanding categories and influence.
This includes intangible assets such as technology, unique resource endowment, network scale advantages and other comprehensive factors of DTC brand value-added services overseas. As such, Buffett sees the moat as a competitive structure, even more so than the CEO. After gaining fame, SheIn must work hard to expand the category. First, DTC brand value-added services overseas build a brand matrix through diversified development paths to resist risks. The second is to enter the mid-to-high-end market after occupying the sinking market. The popular beauty marketplace is SheIn's testing ground.
