When SHEIN stands on the "podium" with Nike and Adidas
Text | Zhang Bing
The landscape of the world's top three fashion retailers has changed.
Recently, in the 2024 ranking of fashion retailers, SHEIN has leapt to become the world's third - largest fashion retailer, second only to sports giants Nike and Adidas.
When expanding the scope to the world's top four fashion brands, SHEIN has surpassed ZARA, H&M, and Uniqlo to become the highest - ranked one at present.
In addition, LV, Skechers, Puma, and New Balance also rank among the top ten. It's not hard to see that among the world's top ten fashion retailers, SHEIN is the only Chinese brand.
It's not easy to change the pattern of this ranking competition.
For decades in the past, the world's top ten fashion brands were almost monopolized by European and American brands, and these brands had a first - mover advantage, with at least 30 to 50 years of development foundation.
However, the enterprises on the list have one thing in common: they have all built competitive defenses in aspects such as brand building, supply - chain construction, and sustainable development.
Take Adidas as an example. After experiencing some challenges, it has now returned to "quality growth" in the Greater China region. This is due to its strategies such as continuously promoting the upgrading of the flexible supply chain in the Chinese market, promoting brand youthfulness and personalization, and practicing the ESG concept.
Taking SHEIN as a reference, its ability to gain a foothold in the overseas market also depends on its innovative, continuously upgraded, and leading digital on - demand flexible supply chain, as well as the layout of technological innovation and sustainable development covering all production links.
From a geographical perspective, the digital upgrading of the Chinese supply chain led by SHEIN is giving rise to brands with global competitiveness.
From the perspective of industry competition, against the background of global economic fluctuations and subtle changes in consumer behavior, innovation in the digital supply chain and sustainable development have become the standard for fashion retail enterprises.
The Answer Behind the Growth
Not only is SHEIN the third - largest fashion retailer, but it also has remarkable speed.
According to data from GlobalData, Nike, as the largest fashion retailer, has seen its market share decline instead of increase, dropping from 3% in 2023 to 2.85%, a decrease of 0.15 percentage points. Among the other three brands, Zara and Uniqlo increased their market shares by 0.05 and 0.04 percentage points respectively, while H&M decreased by 0.01 percentage points.
In 2024, SHEIN's market share reached 1.53%, an increase of 0.24 percentage points compared with 2023. It became one of the biggest winners in the fashion market last year, along with Hermès and Chanel.
It should be noted that among the top ten brands, even Adidas, which had the largest increase in market share, only increased by 0.17 percentage points compared with the previous year.
The fact that brands like SHEIN, Hermès, and Chanel, which represent "affordable fashion" and "more expensive luxury" respectively, can win market choices confirms a view of Axel Dumas, the sixth - generation head of Hermès: "One of the factors that makes Hermès different is that it adheres to its own products, which can attract consumers even when the entire industry is in a downturn."
Beyond cost - effectiveness, why can SHEIN achieve continuous growth and be as favored by consumers as top luxury brands?
Brand power may be the best answer.
In the past, if you randomly stopped a foreigner on the street overseas and asked about Chinese brands they knew, the answers were mostly consumer electronics brands like Huawei, Xiaomi, and DJI. Now, SHEIN may appear more frequently. If you pay attention to some street - interview short videos posted by foreign bloggers, you'll find that this is indeed the case.
Previously, 36Kr paid attention to the inspiration brought by the top 50 Chinese global brands under the era proposition of Chinese enterprises going global. At that time, the top three brands that won the favor of international consumers through innovation and localization strategies were ByteDance, Xiaomi, and SHEIN.
New consumer groups give rise to new opportunities. The Xiaomi electric vehicle, which was launched just one year ago, has become a "Dream Car" loved by young people with its high - value appearance and cost - effectiveness. ByteDance is even called a "blockbuster product maker", having launched many Internet products that have changed people's ways of life and entertainment. SHEIN provides high - cost - effective products for young consumers, which is in itself a unique value creation. Based on the rapid creation, capture, and leadership of fashion and trends, while meeting the functional and emotional needs of users, its product power and brand power are established.
Both the price advantage and the quick response to market trends rely on the breakthrough brought by the "small - order, quick - response" flexible supply chain.
In the fashion industry, high inventory has long been a thorny problem. The inventory levels of many companies generally hover between 30% and 40%, but SHEIN has reduced its inventory rate to single - digits, greatly reducing costs and creating room for lowering product prices.
In addition, the construction of SHEIN's flexible supply - chain system is constantly iterating process improvements and process optimizations. In 2023, SHEIN established its first clothing manufacturing innovation research center in Guangdong, continuously outputting flexible supply - chain standards and exploring cutting - edge clothing manufacturing technologies. Recently, at this clothing manufacturing innovation research center, 36Kr saw auxiliary tools to replace manual sewing of rhinestone chains, machines that can automatically cut, and equipment templates that can sew a pair of gloves in just a few seconds...
As is well - known, the return rate of clothing has always been high, even reaching 80%. It is understood that SHEIN had a very low return rate due to quality issues last year, because a series of supply - chain improvements have made the delivery quality more standardized.
A supplier factory using automatic clothing hanging system equipment
Like enterprises such as Adidas, SHEIN's supply - chain barrier was not built overnight. It is the result of continuous investment over the past decade or even decades.
The Cyclical Journey of a Recycled Polyester T - Shirt
The report "The State of Fashion 2025" jointly launched by McKinsey & Company and the Business of Fashion (BoF) shows that collective action on sustainability has become one of the eight major trends in the fashion industry. As the climate crisis intensifies, inaction is no longer an option. The fashion industry must take action to promote sustainable development.
Regarding SHEIN's flexible supply chain, it is worth mentioning that by using actual market demand to predict sales and control production, it not only reduces overproduction but also significantly reduces the waste of industrial resources.
In fact, SHEIN attaches great importance to green exploration throughout the entire supply chain and in technological innovation. From packaging to the product design stage, SHEIN pays attention to using environmentally friendly materials to reduce the negative impact on the environment.
In the production process, by optimizing the production process, it improves resource utilization efficiency, reduces energy consumption and waste emissions. For example, some clothing is made of recyclable materials, and the use of clean energy is promoted during the production process. In addition, SHEIN actively cooperates with suppliers to promote the green transformation of the entire supply chain, prompting suppliers to also adopt environmentally friendly production methods.
Recently, SHEIN jointly developed a more applicable and economical breakthrough recycled polyester solution for the industry with Donghua University, a leading university in the industry. This innovative recycled polyester technology combines the advantages of physical and chemical methods. This innovative process can expand the scope of recycled materials, including pre - consumer and post - consumer polyester materials such as waste textile materials and PET bottles, providing greater flexibility for raw material procurement, reducing costs, and improving efficiency.
Tests by Donghua University show that this process can repeatedly recycle recycled polyester without significantly affecting the material properties of textiles. Based on this, a recycled polyester T - shirt may be able to have an infinite number of cyclical journeys.
It is reported that SHEIN's new - generation polyester fiber intermediate recycling solution is expected to be promoted to industrial suppliers for mass production in June this year. And SHEIN's textile technology R & D team and Donghua University are still accelerating the development of more innovative recycled polyester technologies.
At SHEIN's clothing manufacturing innovation research center, 36Kr was particularly impressed by a scene. A roll of heat - transfer paper several meters long with various patterns transferred the patterns onto the fabric through a series of rotations quickly and without consuming water. This is a printing process with zero water consumption applied by SHEIN - digital thermal transfer technology.
It is reported that more than 65% of SHEIN's products are produced using digital thermal transfer technology, and the water saved could be enough for a person to drink for 124 million years. In addition, the digital cold transfer denim process production technology widely used by SHEIN can save up to 70.5% of water consumption compared with traditional denim fabric production methods.
Digital cold transfer denim process production
These are just the tip of the iceberg of SHEIN's ESG innovation.
SHEIN's green exploration also includes launching sustainable clothing programs, setting up circular funds, continuously exploring environmental protection technologies such as fabric recycling and reproduction, and investing in start - up companies innovating in recycled materials.
Not only SHEIN, but also Adidas, as mentioned before, has integrated the concept of sustainability into all aspects of its business practices.
Data shows that by the end of 2023, the proportion of Adidas' sustainable products had reached 80%, more than 77 million pairs of sports shoes were made from recycled ocean plastics, and the utilization rate of recycled polyester fibers in its entire product line had reached 99%.
The "2024 Global Fashion Market Data Report" also shows that the fashion industry has now become one of the industries at the forefront of sustainable design, manufacturing, and distribution, and is gradually turning into a consumer - oriented industry. Driven by young consumers, the environmental impact of fashion products has become a selling point for many fashion brands. Therefore, meeting the demand for sustainable development can actually bring additional revenue.
In the past year, 46.4% of global consumers bought sustainable clothing, one - third of consumers bought shoes made of sustainable materials, and 20% bought sustainable accessories.
Continuous investment in ESG also shapes the brand's resilience to a certain extent and enhances its popularity among consumers.
The Leverage Effect of "Sustainable Fashion"
From the day of its birth, SHEIN's business model has destined the brand to follow a sustainable development path, which also means SHEIN's global influence in fashion.
In the wave of globalization, the ESG concept has increasingly become the "world language" for evaluating corporate brand value.
For the fashion clothing industry, sustainable development has transformed from a passive moral principle in the early years to a core element actively integrated into brand strategies, becoming the key for enterprises to gain competitiveness in the international market.
With the awakening of consumers' environmental awareness, their expectations for fashion brands are no longer limited to aesthetics and functionality but also extend to the brand's environmental footprint and sustainable development practices. Brands that actively engage in environmental protection actions, such as using organic, recycled, or biodegradable materials and innovating production processes to reduce energy consumption and waste, can gain consumers' emotional resonance and trust first.
SHEIN's ready - to - wear plastic packaging bags containing 100% recycled polyethylene (rPE)
It can also be seen from many industry reports that as the concepts of "green", "environmental protection", and "sustainability" have taken root in the hearts of young consumers, buying fashion products with sustainable features has become a trendy lifestyle.
Looking back at the development history of the entire fashion clothing industry, many fashion companies have damaged their brand images due to pollution. There are also many fashion brands that have built brand depth through sustainable concepts and environmental protection innovation. For example, Allbirds' repurchase rate increased significantly after it proposed the concept of carbon footprint in 2019, and the environmentally friendly outdoor legend Patagonia has even made ESG a brand card.
Paul Polman, the former CEO of Unilever, helped Unilever gain the recognition of consumers and society through the path of sustainable development when the company was facing unprecedented challenges.
Sustainability is not a cost but a lever to attract young consumers. Perhaps this can also explain why SHEIN, which has only been established for more than a decade, can "compete on the same stage" with international giants.
When waste clothing recycling and renewable technology R & D become the key paths for the fashion industry to move towards sustainable development, the ESG investment from 0 to N will continue to transform into the internal driving force of many enterprises, invisibly enhancing the brand's style and value and making it more stable in the international market.
Ultimately, sustainability is not only reflected in environmental protection but also in sustainable and long - term competitiveness.