Silicon Star: Shein won the top spot in the US free app download list in May 2022. The number of downloads from January to April was 13.8 million times

It is most appropriate to describe Shein's development status as unstoppable. Just a month ago, Shein completed a $1.5 billion financing and became the world's third largest unicorn with a valuation of $100 billion. This month, Shein once surpassed other popular applications such as TikTok, Instagram, and Google Maps to win the top spot in the US free app download list.

You know, although Shein has already shown its edge, its main achievements are still in the field of "shopping". If placed in the big pool of all application categories, Shein still has a certain gap with the champions in other tracks such as social networking, map navigation, and image processing.

But Shein has clearly entered an ultimate battle state of "killing all who stand in its way". TikTok, Meta, Google, Snap and other giants are unable to resist its progress. Today, its popularity among consumers in the United States and around the world is similar to that of TikTok, which emerged a few years ago. It has truly become a phenomenal application.

Shein topped the US free rankings (May 3) and shopping rankings (May 1 to present). Images from marketplacepulse and SimilarWeb

According to Silicon Star’s observation, although the daily rankings have fluctuated recently, Shein has always been among the top ten free apps in terms of downloads, and its ranking is basically ahead of Tiktok, Instagram, Amazon and other apps.

Who would have thought that one day, the top two companies in the US app rankings would actually be two companies with Chinese genes? What’s interesting is that behind the rapid growth of TikTok and Shein, there is even some meaning of mutual achievement and joint progress.

Traffic and sales: a win-win collaboration that takes a different approach

As we all know, although Shein has been established for more than ten years, it has only really exploded in the last two or three years, almost in sync with the rise of TikTok (slightly lagging behind).

This has a lot to do with Shein's marketing model. Today, the reasons for Shein's success can be roughly attributed to two major aspects: one is a strong real-time supply chain system, and the other is a marketing strategy based on social media.

In fact, before Shein, ASOS, Boohoo and other fast-moving consumer goods brands had already begun to work hard on the supply chain, and had already surpassed Zara and HM in terms of timeliness. However, none of them became popular because of this. It can be seen that between the two, the successful marketing strategy is the more critical factor for Shein's popularity.

A major feature of fast-moving consumer goods brands is that they have trendy styles and low prices, and their target consumer groups are young people who have low purchasing power but like to chase trends. Shein realized this very early and keenly realized that social media is the best entry point to reach this consumer group.

As early as 2012, when online influencers and livestreaming were not popular in China, Shein had already tried to cooperate with established online influencer platforms such as YouTube and Facebook, starting with some small online influencers and gradually figuring out a way to create popular traffic posts. Around 2018, when TikTok, which has a viral effect, was just rising, Shein quickly seized TikTok's territory.

Picture taken from Youtube

At that time, Shein’s marketing on TikTok was very “barbaric”.

Regardless of their fame or number of followers, KOLs can participate in the promotion as long as they have an account, and once the promotion is successful, they can get a 10%-20% commission for each order; everyone's video may be forwarded to Shein's official account to gain traffic support, attracting users to post try-on videos and tag themselves; free products are sent to these posters every month, and exclusive discount codes are provided; various topic tags are established, and prizes are given out if there is a disagreement...

Under such "bombardment", batches of TikTok girls fell into it, and Shein's figure could be seen everywhere on TikTok.

Accompanied by rhythmic music, young girls quickly and continuously changed into sets of brightly colored and novel clothes from Shein. The prices of the clothes were marked in the video, a few yuan or more than ten yuan, enticing people to place orders continuously. Shein's users and sales also continued to rise.

At the same time, for TikTok, Shein's crazy subsidy and barbaric promotion model has also brought more users, traffic and advertising revenue to the platform. According to data on TikTok, as of now, the views of the "Shein" and "SheinHaul" tags on TikTok have reached 27.4 billion and 5.2 billion times, and other tags such as Sheincare and SheinFashion have also reached billions of views.

Attracted by Shein's low-threshold subsidies and preferential policies, many users joined TikTok and released their first video. In order to gain more traffic, some bigger bloggers increased their promotion efforts on the TikTok platform, forming a virtuous cycle of traffic and sales.

Screenshot from TikTok official page

Today, the two brands with Chinese genes have become the applications that best understand the preferences of young Americans. They have both relied on the huge dividends of the traffic of American Generation Z Internet celebrities to rise rapidly and subvert their respective industries.

Aiming at Amazon, gathering the "Taobao power" to challenge the e-commerce throne

While TikTok is making waves in the social field and putting Meta's social empire built over many years in jeopardy, Shein has just surpassed Amazon in the e-commerce field and seems to be widening the gap.

According to the latest report from Business Insider, Shein's app downloads were 13.8 million from January to April 2022, while Amazon's were 13.3 million, surpassing Amazon for the first time in quarterly downloads. Previously, data for the whole year of 2021 showed that Shein's 32 million downloads were still behind Amazon's 40 million downloads.

In terms of growth rate, Shein has left Amazon far behind. In 2021, Shein's year-on-year growth rate of 68% surpassed Amazon's -2%. This momentum has continued this year. Compared with the same period last year, Shein's download growth rate has reached 50%, while Amazon's is only 0.75%.

Previously, Silicon Stars has repeatedly stated in reports about Shein that although Shein started out with cheap women's clothing, its goal is no longer limited to the women's clothing field, but to become a full-category e-commerce company like Amazon.

Shein now has almost everything you need, including kitchen supplies, household supplies, pet supplies, children's supplies, and other categories. Moreover, many of the same products are not only cheaper than those sold on Amazon, but even cheaper than buying them directly on Taobao in China.

The picture is taken from Shein official website

The reason behind this is that Shein has accumulated huge overseas traffic and a mature supply chain system in recent years, which gives Shein a great bargaining power. Currently, many domestic wholesale factories are scrambling to establish cooperation with Shein, and even constantly compressing their profit margins just to become Shein's supplier.

According to Silicon Stars’ observation, in recent times, more and more domestic Taobao stores have begun to cooperate with Shein and use Shein’s platform to expand their brands overseas. For example, SimpleRetro, which focuses on French style and has 1.3 million Taobao fans, Unifree, which focuses on girl fashion brands and has 1.74 million Taobao fans, and smaller Taobao stores such as Inflation, Dodc, and Jazzevar have also appeared on Shein.

The prices of these products are mostly on par with those in domestic Taobao stores, and some are even lower than in China after adding platform coupons. The speed at which products are put on the shelves and updated is almost synchronized with that in China.

Although this cross-platform brand cooperation is currently mainly focused on women's clothing, the direct impact is that in the future, everything we can see or buy on Taobao can be bought on Shein at almost the same price, with only a few more days of delivery time.

SimpleRetro and Unifree product interface on Shein

In addition to gathering the power of Taobao, Shein has also recently been constantly trying various methods to try to get rid of the single "fast fashion" label.

The first step is to launch various free-brand lines, covering mid- to high-end product routes.

Click on Shein's "Brand" tab, and you will see nine sub-brands, including women's clothing, women's shoes, beauty products, pet brands, and electronic products. These sub-brands are Shein's own brands, with brand positioning ranging from low to high. Similar to the silk products in MOTF's recently launched art series, they have both design and quality, and are no longer cheap women's clothing as everyone thinks.

In addition, Shein often launches various co-branded products with celebrities, designers or well-known IPs. For example, the recently launched Hello Kitty series of co-branded products and the monthly co-branding with different young artists have greatly increased the uniqueness and diversity of the products.

Designer and IP co-branded product series on Shein

A week ago, in response to many people's doubts about the environmental pollution caused by fast fashion, Shein also launched a new environmentally friendly clothing line, evoluSHEIN. These products are all made of recycled polyester, which can effectively reduce the production of raw materials and the consumption of resources such as water and energy. The first batch of 170 products in the evoluSHEIN series were sold on the platform on April 29, covering tops, skirts and pants, etc., and are expected to expand to at least 1,500 models by the second half of this year.

From the various measures taken recently by Shein, we can clearly feel its emphasis on young consumer groups and its passion and drive to expand the market, which is in sharp contrast to the increasingly strong "middle-aged atmosphere" revealed by Amazon's e-commerce business.

It is said that the new wave pushes the old wave forward. Will the old waves like Facebook and Amazon, which have been prosperous for more than ten years, be knocked unconscious on the beach by the new waves like TikTok and Shein? We may have seen some answers from the choices of users.

Silicon Star