Introduction

E-commerce enterprises are constantly working to maintain a competitive advantage and adapt to the ever-
changing needs of consumers in today's fast-paced and constantly changing digital market. Shein, a business
that has attracted enormous international interest, an impressive market share, and a fair amount of
controversy, is at the vanguard of this new wave of online commerce.

How attractive is the apparel of fast fashion industry?

The fashion retail industry is an ever-changing and highly competitive sector with a broad range of players,
including both small independent retailers and large multinational corporations. To assess the industry's
competitive landscape, a Five Forces Analysis can be conducted.
The fashion retail industry has a relatively low threat of new entrants due to high capital requirements for
starting a fashion retail business. The cost of real estate, inventory, and marketing can be a significant barrier
to entry for new players. However, the emergence of e-commerce has provided new opportunities for entry
into the market, as these players can bypass the costs associated with opening physical stores. Suppliers have
moderate bargaining power in the fashion retail industry. While fashion retailers have many suppliers to
choose from, some key suppliers for particular products, such as luxury brands, have more bargaining power.
The trend towards fast fashion has also put pressure on suppliers to produce goods quickly and at lower prices,
which has reduced their bargaining power. Buyers have high bargaining power in the fashion retail industry.
Consumers have many options for purchasing fashion products, both online and offline, which provides them
with the ability to shop around for the best deals, compare prices, and make informed purchasing decisions.
The rise of social media has also given consumers more power to share information about products and
pricing, further increasing their bargaining power. Substitute products have moderate potential to threaten
the fashion retail industry. While a broad range of substitute products, such as fast fashion and vintage
clothing, are available, they may not always provide a perfect replacement for new fashion products. However,
consumers are becoming more environmentally conscious, and sustainable and eco-friendly alternatives are
becoming more popular, posing a threat to traditional fashion retail. The competitive rivalry in the fashion
retail industry is high, characterized by a large number of players competing for market share. Online retailers
have also intensified the competition, as they can offer a wider range of products at competitive prices to a
global market. The fast-paced nature of the fashion industry, with new trends and styles emerging frequently,
contributes to the high level of competition.

Does Zara create the capture value? How did Zara achieve its business success by changing the
business model of fashion industry?

Zara, a worldwide fashion retailer owned by Inditex, achieved success through its rapid response to trends and
ability to reduce lead times. Despite going against the conventional wisdom of outsourcing production to
lower-cost Asian factories, Zara vertically integrated its supply chain and moved production to Europe, utilizing
a near-shoring approach. This decision has been a key factor in the company's success, allowing for greater
control over the production process and quicker response times to emerging trends in the fast-paced fashion
industry. Zara's disruption of the fashion industry is characterized by its ability to reduce the time to market to
less than three weeks, from the initial inspiration to retail availability. By creating a new category of affordable
fast fashion, Zara established itself as a significant player in the highly competitive fashion industry. This
business model has been a key factor in the company's success, enabling it to become a heavyweight in the
fashion industry.
Another one of its key strengths is its customer-centric approach. From the company's inception, it has placed
a strong emphasis on prioritizing the needs and preferences of its customers. This focus on customer

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satisfaction has helped to define the brand's culture and has been instrumental in establishing Zara as a global
fashion powerhouse.
What are SHEIN business model and core competence? What is SHEIN value innovation? How is
SHEIN different from the incumbent fast-fashion players?

Shein is an online fashion retailer that offers affordable clothing, footwear, and accessories for men, women,
and children. Its business model is based on an online-only approach, which helps the company keep its costs
low while also providing a high degree of flexibility in terms of inventory management and product
development. The company's core competency lies in its ability to quickly identify and respond to changing
fashion trends, as well as its fast supply chain and logistics capabilities.

Shein's main value innovation is in its ability to offer customers fast fashion at extremely low prices. This is
achieved through direct-to-consumer sales via its online platform, as well as through data analytics and
automation to optimize its supply chain and reduce costs. Compared to traditional fast fashion players, Shein
stands out by focusing on online sales, data-driven decision-making, and offering low prices. Additionally, the
brand has gained a loyal following among younger consumers through its heavy reliance on social media
influencers and user-generated content in its marketing strategy.

What is the role of digitization in Shein Business Model? How can one build an ecosystem and
become a digital player like SHEIN?

SHEIN's business model is built on a direct-to-consumer (DTC) approach that heavily relies on digital
technology. The business model benefits greatly from digitization since it enables the company to use data and
technology to increase efficiency, tailor client experiences, and react quickly to shifting market trends. Shein
has created a thorough digital environment with e-commerce-optimized social networking sites, mobile apps,
and a user-friendly website. Shein has been able to develop a global presence, spur sales growth, and
effectively communicate with its target audience by utilizing the power of these digital channels. The
company's CEO, Chris Xu, has expertise in search engine optimization (SEO) and brand marketing, which have
played a crucial role in SHEIN's success. SHEIN leverages its software technology and geographic location to
collect and analyze customer data in within as little as three days. This approach has led to the company's
ability to offer low-priced fashion products with a quick turnaround time. real-time, allowing the company to
create new designs.

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Building an eco-system

Embrace agile
Leverage social media to
Focus on customer methodologies to
build a community
experience and use data respond quickly to
around your brand and
to personalize offerings. changing customer
reach new customers.
preferences and trends.

Prioritize technology and

What should Shein do in the future? Which option on the case is your priority if you an on board?

I believe that establishing sustainable practices and enhancing supply chain transparency should be Shein's
primary future priorities. My top priority as a board member would be to put ethical and sustainable practices
ahead of only concentrating on growth and money. Shein can utilize the blue ocean strategy, which is used to
expand markets and innovate on values. The objective is to establish an uncontested market area by
eliminating competition and to generate new demand by presenting a distinctive value proposition. The Blue
Ocean Strategy's cornerstone is value innovation. It entails increasing value for the business and its clients
while concurrently cutting costs. This is accomplished by pursuing distinction and low cost at the same time.
There are four strategies – Eliminate, Raise, Reduce, Create. Shein must focus sustainability by using eco-
friendly products, cutting back on waste, and lowering its carbon impact to create a new value proposition.
Enhancing supplier compliance with moral labor standards and environmental regulations is crucial for
increasing supply chain transparency. Prioritizing long-term sustainability over immediate advantages is
important. Involving stakeholders can help better understand ideas and suggestions, and public reporting on
sustainable performance can promote accountability and transparency for the company.

What do you think about the environmental impact caused by the fast fashion industry? Could
Shein find the solution to this problem within the current business model?

The fast fashion industry contributes significantly to the triple planetary crisis of pollution, waste, and
emissions. Despite the possibility of sustainable fashion and circularity in the textiles value chain, consumers
today are buying more clothes and wearing them for shorter periods, leading to an increase in discarded
garments as trends change rapidly. This behavior fuels the negative environmental impact of the industry.
According to the Ellen Macarthur Foundation, every second a truckload of discarded textiles is thrown into
landfills or incinerated. In addition, people are buying 60% more clothing than they did before, but they are
wearing them for half the amount of time. Fast fashion is causing environmental issues, such as plastic fibers
polluting oceans, wastewater, and the exploitation of underpaid workers due to toxic dyes. However, experts
suggest that there is an alternative solution, which is a circular economy for textiles. Shein, as a fast fashion
company also contributes to this problem. Their unsustainable business model is caused by the tremendous

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volume of products it generates every day. However, Synthetics Anonymous 2.0, a report on fashion
sustainability, claims that the manufacturers' rapid use of virgin polyester and significant oil consumption
produces as much CO2 as about 180 coal-fired power plants.
Shein's focus on quick, inexpensive, and fashionable apparel manufacture and distribution is
intrinsically unsustainable, therefore it would be difficult for the company to address the issue of fast fashion's
environmental impact within its existing business model. After getting hit with claims of unethical production
practices, they have hidden behind greenwashed claims. Shein might, however, take measures to lessen its
negative environmental effects and transition to a more sustainable economic strategy. This could entail
making investments in environmentally friendly materials, cutting back on waste and emissions, enhancing the
integrity and ethics of the supply chain, and investigating circular economy models for the manufacture and
consumption of textiles. In the end, switching to a more sustainable business model would necessitate a
considerable change in the organization's goals and tactics, but it would also offer chances for innovation and
differentiation in the fiercely competitive fast fashion sector.

Conclusion
Shein is a fast fashion brand that has gained popularity by leveraging a unique business model that focuses on
delivering trendy, affordable, and diverse fashion products to its customers across the world. Shein has
managed to differentiate itself from other fast fashion brands by investing heavily in digital marketing, social
media, and technology. By doing so, Shein has been able to create a strong brand identity and loyal customer
base that keeps returning to purchase its products. However, Shein's business model and the fast fashion
industry in general has been heavily criticized for its negative impact on the environment and labor practices.
The industry's emphasis on speed and low-cost production has resulted in the exploitation of workers, waste,
pollution, and environmental degradation.

To mitigate these negative impacts, Shein and other fast fashion brands must adopt more sustainable and
ethical practices throughout their supply chains, from sourcing materials to manufacturing and distribution.
This includes investing in renewable energy, reducing waste, and ensuring fair labor practices. Overall, Shein's
success as a fast fashion brand highlights the importance of constantly adapting to changing consumer
demands and leveraging technology and social media to create a strong brand identity. However, it also
underscores the need for the fashion industry to adopt more sustainable and ethical practices to mitigate its
negative impact on the environment and society.

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