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In early February 2022, two investment news around SHEIN once again brought attention to this low-key brand.
According to the "China Guangzhou Release" news, SHEIN spent 15 billion yuan to invest in the construction of supply chain headquarters projects in the Greater Bay Area has begun preliminary work. The project is located in Zhongxin Town, Zengcheng District, Guangzhou, with a total land supply of about 3,000 mu and a total construction area of about 3.3 million square meters. But the other piece of news wasn't so rosy. After SHEIN's acquisition of Patoson, the transfer payment has not been paid so far. In this regard, cross-border communication has filed a lawsuit.
It can be seen that after Patoson suffered a heavy blow from Amazon's name, SHEIN has decided to stop the loss in time even for Bo Gongtang. Throughout the history of SHEIN, both of these messages have been branded by SHEIN - showing an iron fist and boldness in the process of building a commercial map.
SHEIN's story began in 2008, when its founder Xu Yangtian established Nanjing Dianwei Information Technology Co., Ltd. in Nanjing, and from 2009 onwards, he began to turn to cross-border e-commerce, and turned to Guangzhou after discovering the shortcomings in the supply chain.
Since its establishment, every step of SHEIN is inseparable from a series of investments and mergers and acquisitions. Every public transaction of SHEIN and its founder Xu Yangtian has a clear idea and logic, relying on frequent acquisitions during the expansion period, and after the establishment of the status of the jianghu, it uses funds to continue to bet on the SEA DTC brand, in addition to women's clothing related categories, the commercial map further involves furniture, 3C, musical instruments and other tracks.
In the process, SHEIN's small ecology has become a climate.
SHEIN is involved in investing in projects
Invest in genes
For SHEIN, 2015 may be a year to remember. Since 2014, SHEIN has been unable to meet its stocking needs by relying on its original external supply chain. So in 2015, they moved from Nanjing to Guangzhou Panyu, and all of SHEIN's suppliers followed them to Panyu that year.
Subsequently, SHEIN entered a period of rapid expansion. Not only built its own supply chain, but also through investment, mergers and acquisitions, to further expand its business territory. Since the end of 2014, SHEIN has begun to acquire women's clothing competitors specializing in the European and American markets, and has acquired Romwe and MAKEMECHIC successively.
In fact, Romwe's founder, Li Peng, has long been associated with SHEIN and Xu Yangtian. Previously, some media reported that Xu Yangtian had two partners, Wang Xiaohu and Li Peng, at the beginning of his business in Nanjing. After that, they parted ways, and Li Peng later mentioned in an interview, "One day in 2009, Li Peng and Wang Xiaohu came to the company and found that Xu Yangtian and his team were missing. Subsequently, Li Peng founded Romwe, whose operating ideas were similar to SHEIN's.
Judging from SHEIN's early mergers and acquisitions of competitors, SHEIN's early thinking may not be to operate a single brand. Some media have combed and found that in the three years from 2015 to 2018, SHEIN's Hong Kong company "ZOETOP BUSINESS CO LIMITED" applied for at least 11 trademarks, including the following trademark names: "SHEIN", "MAKEMECHIC", "DOTFASHION", "DIDK", "MILUMIA", "FLOERNS", "VERDUSA", "SOLY HUX" , "EMMACLOTH" and "WDIRARA". Most of these trademarks have been actually operated.
In the cross-border e-commerce industry, the simultaneous operation of multiple brands is not a new thing, and the most important transaction in that year was the acquisition of the cross-border e-commerce shopping guide platform ZZKKO, and then the APP under ZZKKO also became the official APP of SHEIN. Pei Yang, the founder of the APP, also joined SHEIN and was interviewed many times in the name of SHEIN.
Hand in hand with friends
According to the data platform IT Orange data, Pei Yang has now left SHEIN, but he still maintains close contact with SHEIN.
After ZZKKO, Pei Yang also joined the army of brands going overseas, operating the cross-border brand JW PEI. The brand is currently part of Shenzhen Longjinxiang Commercial Co., Ltd., which also received shein's investment in 2017.
Screenshot of JW PEI standalone station
"We are a niche designer brand from Los Angeles, USA, founded in 2017 by Chinese designer couple PEI and Stephanie, the global headquarters of the brand is located in Los Angeles, USA, and the Asia Pacific region is headquartered in Shenzhen, China. We insist on independent design, independent production, sustainable and environmentally friendly simple design of plain leather material is the core of the brand. The company said.
It can be seen that in addition to the external mergers and acquisitions of competitors and the realization of business expansion, many of the companies that SHEIN participates in investment have a deep relationship with SHEIN early on, and have always received shein's support in the development process.
Another case is Guangzhou Longyiren Garment Co., Ltd., which was founded in March 2011 as Nanjing Monochrome Trading Co., Ltd., and after several years of development in Nanjing, the company relocated to Panyu, Guangzhou at about the same time as SHEIN.
The company describes itself as "an e-commerce company focused on foreign trade online retail and small wholesale, mainly designing, producing and selling clothing for special occasions (various festivals or parties under Western culture)." The main target markets are North America, Western Europe, Australia, Japan and other countries. ”
On May 14, 2018, Guangzhou Longyiren Garment Co., Ltd. completed the industrial and commercial change, and the shareholders added Nanjing Lingtian Information Technology Co., Ltd., and on August 28 of that year, Nanjing Lingtian Information Technology Co., Ltd. was changed to Guangzhou Xiyin International Import and Export Co., Ltd., with a current shareholding ratio of 16%.
Now, Guangzhou Longyiren Clothing Co., Ltd. has also joined the ranks of the brand going overseas. According to the investigation, Longyiren Clothing began to apply for the registration of the product LATUZA on December 16, 2019. LATUZA currently has both independent stations and Amazon stores, mainly selling pajamas and other clothing, and featuring bamboo fiber.
Screenshot of LATUZA stand-alone station
In the brand introduction, the brand manager named Latus Wang wrote, "Children who grew up in bamboo forests believe in the power of nature." According to its Facebook page, Latus Wang is Wang Chenglong, the majority shareholder of Guangzhou Longyiren Clothing Co., Ltd.
Intensive outbound investment in 2021
In 2019, Xu Yangtian also invested in the main company of the jewelry e-commerce platform SOUFEEL in the name of an individual - "Guangzhou Maiyuan E-commerce Co., Ltd." However, with the exception of startups like Guangzhou Longyiren Clothing and Pei Yang, which have deep roots in SHEIN, SHEIN itself rarely makes financial investments.
However, entering 2021, SHEIN's investment interest is visible to the naked eye. In January 2021, SHEIN tried to bid £300 million for british brand Topshop, but lost. In the same month, outdoor home DTC brand Outer completed a $10.5 million Series A financing, of which the lead investors are quite luxurious, namely Sequoia Capital China Fund and SHEIN.
Although Outward appears to be an American brand, it is also closely related to China, co-founded in California for Jiake Liu and Terry Lin, two Chinese-Americans. Outer's products are produced at a processing plant in Ningbo, Zhejiang. These factories have a close relationship with Outer founder Liu Jiake and have long been engaged in the export business of outdoor furniture.
Subsequently, SHEIN also participated in the investment of Guangzhou Lanshen Technology Co., Ltd. and Shenzhen Qianhai Patuoson Network Technology Co., Ltd. According to a previous report by Zhixiang Network, Lanshen Technology is a cross-border musical instrument DTC brand, with sales reaching 1.5 billion yuan in 2020, ranking among the top three in the world in amazon's musical instrument brand sales. Patuoson was once the "cash cow" of the first cross-border e-commerce share of cross-border communication, and when it was sold by cross-border communication, the buyers included 20 giants such as Xiaomi, Shunwei, Zongteng, SHEIN, Aoji, Byte affiliates, and CDH.
When the news of patoson's sale was just announced, many people in the cross-border e-commerce industry believed that cross-border sales lost money and the value of Patosun was underestimated. However, including SHEIN, the outside world obviously did not expect that Patoson would suffer a major blow from Amazon later. At the end of April 2021, Patoson's main brand was first blocked due to the problem of brushing orders, and then the cross-border big sale fell instantly and has not yet recovered.
However, it is clear that SHEIN's interest in outbound investment will not stop there. On May 17, 2021, SHEIN also established Hainan Xiyan Technology Holdings Co., Ltd., which includes "engaging in investment activities with its own funds" and "venture capital investment (limited to investment in listed enterprises)." ”
But the company's role goes beyond investment, as SHEIN has also used it to connect with long-standing cross-border logistics giant, Zongteng. Shenzhen Yunxi Heguang Technology Co., Ltd., which is invested by the company, is affiliated to the Zongteng Group, and the major shareholder is Shenzhen Yida Technology Co., Ltd., a subsidiary of Zongteng, which operates the overseas warehouse brand "Barn Overseas Warehouse".