Scoot Over, Amazon - Shein is Moving In

Scoot Over, Amazon - Shein is Moving In

Walmart and Target have tried to take over the online shopping space from Amazon but haven't made too much of a dent. But a new challenger is on the scene – Shein, a Chinese fashion retailer whose app is said to be the most-downloaded on earth.

Shein has already made a splash in Mexico and Brazil and reports say it is heading north and planning to expand beyond the fashion marketplace, where it has sold $30 billion worth of trendy merchandise at extremely low prices in 2022, according to the Wall Streeet Journal.

Although not well-known beyond the fast-fashion market, Shein is nevertheless an online giant. Its website handle hundreds of millions of monthly visitor and it has a larger social media presence than many major brands. It ships to more than 150 countries and was valued at more than $100 billion in a recent funding round, the Journal said.

Besides eyeing new geographic markets, Shein is expanding into additional categories, including beauty and home goods. It has also expanded its supply chain from China and is building three large distribution centers in the U.S. that will reduce shipping times for its customers.

The first center, in Whitestown, Indiana, is already in operation and a Southern California warehouse is expected to open this spring.

Adding a marketplace

Besides selling its own goods, Shein wants to build a marketplace of third-party vendors, like those Amazon and Walmart operate. But whether it can speed up delivery times and inventory fast enough to compete effectively with Amazon and Walmart is an open question.

Currently, orders from Shein can take a week or more to show up. That was acceptable a decade or two ago but may not be enough today, given the massive distribution networks Amazon and other major online vendors have built.

On the other hand, Shein is already the biggest direct-from-China retailer, according to MarketplacePulse, which gives it a strong customer base that it can build on as it tries to expand.

While Shein's up-to-the-minute fashions appeal to its Gen-Z customers, they've also sparked complaints from competitors who have filed numerous lawsuits alleging theft of their designs.

There are at least 50 lawsuits pending in U.S. federal courts, the Wall Street Journal reports, most of them alleging trademark or copyright infringement.

The complaints range from major U.S. corporations to individuals. In one case, an artist said Shein lifted an illustration from her website and used it on a t-shirt.