How Shein and Temu threw a bomb at eCommerce conventions
Mark Schaefer
Top Voice in Personal Branding, keynote speaker, university educator, futurist, and bestselling author of "Marketing Rebellion," "Belonging to the Brand," and "Audacious: How Humans Win in an AI Marketing World."
When I dress for the day, the first question that enters my head is, "I wonder how old this shirt is?"
So ... I'm not a shopper. But I do love studying the marketing behind shopping trends, and there is something going on right now that is blowing my mind. Temu and Shein are dominating the retail scene, seemingly coming out of nowhere.
And when I say out of nowhere, Temu was founded 18 months ago and is now the most downloaded retail app in the world with 250 million customers. Shein has been around longer, but since the pandemic, it has become the number one fashion retailer in the world.?It's the second-most downloaded retail app.
The fascinating marketing case study here is the non-intutive way they did it.
Both companies are leveraging a massively large selection and unbelievably low prices -- taking advantage of the low-cost (and controversial) Chinese supply chain. Low prices have always had a place in the value shopper's heart, but there is something more going on here.
Shein and the eCommerce revolution
Shein is offering basement-level prices -- think $3 for a bikini -- and yet seems to be pulling off fast deliveries, respectable quality, and responsive customer service. That doesn't make sense.
Another achievement that goes against the grain is that these are cheap Chinese goods, and yet the brands are winning the hearts of fashion-conscious teens as a preferred fashion statement. Again ... what?
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Both companies are driving awareness hard through aggressive, ubiquitous digital advertising. But the advertising and promotions offer even deeper discounts on already low prices. They continue to build loyalty by introducing 1,000 new products a day and offering incentives for customers to earn loyalty points. Rapid innovation, aggressive advertising, and loyalty rewards are not typical hallmarks of a bargain basement brand!
The companies are innovating so fast that they have no time for product descriptions, let alone SEO. They seem to be getting by on product photos, thousands of positive reviews, and push from teens doing "unboxing videos" from their shopping adventures.
Now, here's where it gets really weird. Research shows that about 60% of Shein's customers consider themselves eco-buyers. They'll even spend more for sustainable products. Yet Shein's "fast fashion" is basically throw-away consumerism and the company has been hammered by both environmentalists and critics of harsh labor practices. Does purpose matter to these consumers ... at all?
It's an enigma that Amanda Russell and I joyfully explore in this new episode of The Marketing Companion. We explore all these ideas and suggest that these shopping sites don't just threaten Amazon, they are becoming the new social media communities.
You won't want to miss this. Click here to listen:
I appreciate you and the time you took out of your day to read this! You can find more articles like this from me on the top-rated {grow} blog and while you’re there, take a look at my Marketing Companion podcast and my keynote speaking page. For news and insights find me on Twitter at @markwschaefer, to see what I do when I’m not working, follow me on Instagram, and discover my RISE community here.
Leather Fashion Designer - Vicissitude Leather and Saddlery
1 年So Mark Schaefer and Amanda Russell, MBA I had to listen and by the end it seems like you were landing on some things, especially with the idea that these companies may be using a similar strategy to Fb, Twitter, etc in that they are heavily investing towards advertising and getting an enormous client base to dominate market share. But this and other points are touched on and then veered away from I think. Customers are providing the reviews, but they aren't getting value. A bribe doesn't have value, it's to get a job done. Essentially it's what has been said before: If it's free, the product is you. I think one thing that sustains business models like this are folks like you who unwittingly talk about it in a way that doesn't tell it for what it is. Why is it so cheap? Why is there such variance between different manufacturers in terms of quality? Anyone in the manufacturing of garments is aware that there is a long process involving design, creation, multiple fittings on multiple sizes to be able to sell ready to wear fashion. They are skipping these steps. They are using slave labor. Sustainable fashion is a privilege, so is a platform. Don't list it in the show notes: name people who call out these unprincipled businesses.
Leather Fashion Designer - Vicissitude Leather and Saddlery
1 年I'll have to come back to this after a listen tomorrow. Hopefully you don't describe the worst labor practices in the history of the species as just 'controversial' in the audio. So I'm marking this with a post, hope to absolutely tear you apart or enjoy the podcast's insights tomorrow during the storm!
Chief Strategy Officer at Packhelp | Marketplace, Retail & Digital experience | Entrepreneurial spirit
1 年While Temu and Shein's growth is impressive, I'm concerned about the long-term impact of their business models. It's not merely the environmental toll of their activity that's worrisome, but the broader ripple effects. Local companies now finding themselves in a fierce battle for production cost cuts and visibility in the online ad space, where giants like Temu and Shein are outspending and outshining them.
Marketing Consultant, Publishing, Research Communications, Associations, Education, EdTech
1 年AND the problem with fast fashion anyway... see article for Ghanian fisherman's perspective....please stop.
Community Development
1 年I have been reluctant to buy anything from Temu because the pricing seems too low for the same products ( using same stock photo) and it appears to be a scam or a way to collect data. How can a $18 product be $3 as Temu? As with Shein, didn’t they both have recent lawsuits on fraud or unethical business dealings, especially with those who use the app. And I agree with the Google analytics issue because their products are features first using the same product photo that more recognizable brands.