Shein squints at Switzerland: China’s controversial low-cost fashion giant questioned this for the SNB Observatory

Sports leggings for 8 francs. A dress with straps for 9 francs. A hoodie for 10 francs. The offer on the Chinese online portal Shein is large. And most importantly, it’s cheap. In barely 15 years, the company has developed into a fashion giant, thanks to a young, willing and especially female clientele.

In fact, as of last year, Shein (pronounced She-in) is considered the largest fashion retailer in the world after being valued at $100 billion in a funding round last spring – more than Spain’s Zara parent company Inditex and H&M combined. The dealer employs 10,000 people.

Shein relies on so-called ultra-fast fashion: fashionable garments, often inspired and copied from expensive originals, produced in a very short time by some 5,000 low-cost suppliers. Every day, up to 9,000 new items appear in the online shop, which are advertised by paid influencers. But celebrities like Katy Perry, Khloé Kardashian, and Rita Ora have also been harnessed to the Shein marketing machine.

Hostile image of environmental organizations

The offer is what is currently trending on social media. As a result, most goods spoil quickly and end up in the household waste after a short time. In addition, little is known about production in the sewing and dyeing factories. Shein is also a major enemy for sustainability organizations such as Greenpeace.

Meanwhile, this does not prevent the Chinese group from continuing to grow. The recent move in Japan is remarkable. The online retailer has opened a permanent store in metropolitan Tokyo for the first time. Garments with a QR code are exhibited on 200 square meters and two floors. The purchases are also processed online in the store. It also hosts fashion shows and other events.

Target the Shein pop-up store in Switzerland

It should not stop at this showroom. Shein spokeswoman Charlene Lee says when asked that the focus remains on the online business. With pop-up branches, however, the intention is to make Shein fashion tangible for customers.

The Group regularly opens such temporary branches in various international cities. “We continue to expand with it.” The group also has Switzerland in its sights, Lee confirms: “We can’t communicate a date for Switzerland at the moment, but we are working hard to take this step.”

From online to offline business? Shein is not alone in this. However, the optimal coordination of the two strategies is not always successful. The American online giant Amazon announced last February that it would close nearly 70 stores.

This included the Amazon 4 star format. Particularly well-rated products from the online range were offered in these industries. And in the UK, the expansion with Amazon Fresh self-service supermarkets has been suspended.

From the flop in Silicon Valley to European players

The German online fashion retailer Zalando currently operates 13 own outlet stores in Germany. He is also trying to enter into more collaborations with larger clothing chains such as C&A, but also with small, local boutiques.

Of this development would like ensign benefit. The German start-up sees itself purely as a brand broker. In other words, Vaund offers various manufacturers that do not have their own store a curated, physical platform to present their items in the areas of mobility, consumer electronics, kitchen, household and lifestyle.

There are already Vaund stores in five German cities. “In Switzerland, we are in initial talks with retailers for Vaund shop-in-shops,” says managing director and co-founder Michael Volland. The cities of Zurich, Bern, Basel and Lucerne are in the crosshairs. The first store is scheduled to open this year.

Vaund’s idea is not new – and has yet to prove itself in the long run. The California company is considered the pioneer of the concept – the industry talks about showrooming B8ta, which also rented retail space for third parties where customers could touch and test the products. In February, just seven years after its foundation, B8ta had to cease operations due to lack of success.

What does the expert say?

Retail expert Martin Hotz of the consultancy firm Fuhrer & Hotz is not surprised about the penetration of online retailers in the high street. The feeling, ie touching and experiencing the goods, remains important. “Above all, the total mixing of the different channels is necessary, because customers are everywhere on the move, from social media via the webshop to shops in the city.”

In the early days of online shopping, most retailers left the IT department to set up an online store, says Hotz. “They took on a life of their own and often had little to do with the physical industry and were not very customer-friendly.” As a result, professional online retailers such as Zalando or Shein had it easy with their large selection.

According to Hotz, many retailers have stuck to the industry motto ‘Ropo’ for too long. The acronym stands for “research online, buy offline” – i.e. the hope that customers will learn more online, but then make the purchase in-store. “That was once,” says Hotz. Not that this behavior no longer exists. “But it also works the other way around and social media also plays an important role.”

It may not stay that way. “It’s entirely possible we’ll be shopping the Metaverse soon.” It is clear that classic Saturday shopping will continue to lose importance. “Today we can shop 24 hours a day, seven days a week, whenever we want.” This makes the emotional staging of the shopping experience in the store as a location all the more important.

(aargauerzeitung.ch)