In recent years, the cross-border e-commerce platform SHEIN, which has been dormant abroad, has become popular.
On the "2023 Global Unicorn List", SHEIN (Shein) ranks among the top 10, with a valuation of 450 billion yuan, becoming one of the most successful companies in the past three years.
Before 2021, Shein was a name that was not mentioned by the e-commerce industry.
Today, it is the world's fifth largest unicorn company after ByteDance, SpaceX, Ant Group, and Stripe, and has become an international clothing e-commerce giant that punches Amazon and steps on ZARA.
Overseas, it is regarded as the "e-commerce version of TikTok".
Behind Shein's success is inseparable from its founder Xu Yangtian, who ranked 79th in the "2023 Hurun Report" with a net worth of 50 billion yuan
The British "Guardian" praised him as the "king of fast fashion" and "mysterious billionaire".
was born in the countryside, but created a super unicorn and became a billionaire worth 50 billion, what did Xu Yangtian rely on?
Unlike many rich people, although he is sitting on a company with a valuation of 100 billion, Xu Yangtian is extremely low-key, so that when he is on the rich list, everyone is still speculating about who Xu Yangtian is?
Among the 40 business elites under the age of 40 in Fortune China in 2023, Xu Yangtian is at the top of the list, but because he is too low-key, he doesn't even have a photo.
In 1984, Xu Yangtian was born in a poor peasant family in Zibo, Shandong Province.
When I was a child, it was common to eat steamed buns dipped in soy sauce. In my junior year of high school, I was nervously preparing for the exam, but I also had to squeeze in time to go out and do odd jobs to help my parents support the family.
For people born in a poor family, reading is the best shortcut to change their fate.
In 2002, Xu Yangtian was admitted to Qingdao University of Science and Technology, and during his four years in college, he worked part-time to earn living expenses while attending classes.
After graduating from university, Xu Yangtian chose to go to other places to find his own world. He first went to a foreign trade online marketing company, where Xu Yangtian came into contact with a very important technology - SEO (search engine optimization), and also mastered a lot of sales in overseas markets.
In 2008, Xu Yangtian left the foreign trade company and founded his own company with two partners, but the company closed down within a year due to poor management.
But Xu Yangtian was not discouraged, but regained his strength and established a second company.
This time, the company's business is mainly to sell wedding dresses across borders.
Because when he accompanied his girlfriend to a wedding dress shop in Suzhou to choose a wedding dress, he found that the wedding dresses there were of good quality and low price, not only of good quality, but also very cheap compared with foreign ones.
In addition, I have worked in a foreign trade company before, and I have some cross-border e-commerce experience.
So Xu Yangtian immediately registered a company when he went back, began to be a wedding dress agent, sold domestic wedding dresses abroad, and placed a large number of advertisements on Google and Facebook.
At that time, the wedding dress industry was thriving, the profits were considerable, and with the publicity effect of advertising, Xu Yangtian quickly earned the first pot of gold in his life.
This year, Xu Yangtian was 26 years old.
After his first success, Xu Yangtian began to think more long-term.
Once, Xu Yangtian joined an overseas social media platform and became one of the first users of the overseas version of Xiaohongshu Pinterest, where he learned that most of the users were women.
Quick thinking, he began to think about wedding dresses after all, which are disposable items, and if he sells women's clothes, he will attract customers to buy them all the time.
In 2011, Xu Yangtian bought a domain name called Sheinside (the predecessor of Shein), began to build his own independent website, expanded the cross-border wedding dress business to the entire women's clothing business, and established a full-category women's clothing platform.
This move completely kicked off his business.
Although all preparations are in place, the market environment in which Shein operates is not optimistic.
In the fashion market, young people like to pursue high-quality and low-cost trendy clothing, with established brands such as ZARA, H&M, and Uniqlo in the front, and mature cross-border e-commerce platforms such as Amazon and Lanting Jishi in the back.
It also means that there isn't much room left for a newcomer like Shein.
But now that I have decided to do it, there is no turning back from the bow, so I can only kill a business track of my own.
Xu Yangtian first adjusted the marketing method on the Sheinside platform to be similar to Pinduoduo in China, with the price of women's clothing set at a maximum of $20 and the lowest price at less than $5.
Because of the affordability, many styles, complete categories and fast launches, it has attracted many fans, as long as someone places an order on the platform, Xu Yangtian's team will go to the wholesaler to pick up the goods and deliver the goods.
Subsequently, Xu Yangtian seized the new trend of online Internet celebrity sales, and by cooperating with some Internet celebrities and models, he used FB, Ins, Twitter and other social platforms to attract huge female traffic to Shein.
But as more and more people pay attention, sales continue to soar, which also brings another difficulty and challenge to the company.
Since Shein does not produce its own goods, it only goes to the market to buy according to the customer's order every time, which will lead to too long receiving time, poor user experience, and many complaints.
Therefore, Xu Yangtian made up his mind to build his own supply chain, and in order to run through the whole process as soon as possible, he personally went to Guangzhou to set up a supply chain.
However, there is a common characteristic of the fashion industry, consumers' decision-making is random, it is difficult for brands to predict whether the product has the potential to be a hit, and it is naturally difficult to quickly deliver the product to consumers, which may lead to the production of more overstock, less production and not enough sales.
Xu Yangtian's supply chain pursues the "small order quick return" model, that is, small batch production, as long as there are 100 orders, it will be put into production, and according to the actual sales situation, the order will be quickly returned to production.
This model not only ensures timely shipment, but also avoids inventory overstock.
However, it was difficult for Shein to find a supplier who was willing to cooperate with her.
Many suppliers did not accept orders because they were small, and finally Xu Yangtian promised to subsidize the factory and ensure that they would not lose money, so he did this.
In order to keep the "small order quick return" model going, Shein has increased its investment in suppliers.
First of all, the subsidy of real money, it is reported that the first batch of factories to participate in the expansion and renovation received a total of 6 million yuan of support from Shein.
Then, Shein also incorporated suppliers into its own production system, and comprehensively improved its entire production process, acceptance standards, quality control, and efficiency.
After a series of improvements, the factory's production efficiency has improved a lot compared to before, and even if Shein still follows the model of small batches and rebates, suppliers can still make money, and Shein does not need to increase subsidies.
For suppliers who need rectification, Shein will also assist them one-on-one in sorting out the processes of material procurement, production process management, quality inspection, etc., so as to increase the number of orders and deliveries.
At the same time, with the continuous evolution of Shein's digital system, the quality of the factory's products and delivery cycle are also continuously improving through order tracking and order scheduling optimization.
In order to build its own brand, Shein also set up a clothing product team composed of designers and buyers.
For each individual category, Shein has established a corresponding team, which is responsible for designing styles, building fabric libraries, organizing shooting, etc., to accurately explore immediate and rich fashion elements.
This flexible and robust supply chain system will be Shein's real moat.
With the continuous improvement of the entire production and sales process, Shein's advantages have been fully demonstrated, with many styles, fashion sense and high cost performance.
This also accurately poked at consumers' shopping desires and brought more traffic and attention to Shein.
In 2013, Shein was propelled to a faster runway, securing a US$5 million first round of investment from JAFCO Asia.
But the faster you go, the greater the pressure and challenges.
In the face of increasingly fierce competition in the market, if we want to go steadily and far, we need to plan more.
Xu Yangtian decided to expand the sales beyond just "women's clothing".
Since 2015, Xu Yangtian's company has officially changed the name of Sheinside to SHEIN.
At the same time, Shein no longer positions itself as a single women's clothing brand, but expands its product categories, including home furnishing, shoes, bags and accessories, beauty, pet supplies, etc., gradually forming a huge brand matrix.
This move helped Shein take off quickly again.
So far, it has launched 9 independent brands, including young fast fashion brand ROMWE, mature women's clothing brand EMERY ROSE, beauty brand SHEGLAM, mid-to-high-end clothing brand MOTF, shoe brand Cuccoo, etc.
The bigger the plate, the more money you need to keep up.
Subsequently, Shein won an investment of 300 million yuan from IDG and Greenwoods Capital.
With the help of capital, Shein receives a new round of financing almost every year, sales have also grown rapidly, and the company's valuation has doubled, ushering in a real explosive period.
During the epidemic, other industries have seen their revenues shrink, but Shein's sales have increased instead of decreasing, and have even tripled compared to before.
In 2020, Shein's annual revenue will be close to US$10 billion (about 66.539 billion yuan), which is also the eighth consecutive year that Shein's revenue has increased by more than 100%.
In 2021, Shein's revenue has reached 100 billion.
Since then, Shein's domestic headquarters office in Guangzhou Side City has begun to accelerate its expansion to a full-category platform model, and the dual engine of self-operated brand and platform has begun to take shape.
In order to strive for growth, Shein strives to attract more users to the platform, allows third-party partners to settle in, and is ready to introduce more types and numbers of third-party merchants.
Shein has also announced a "Gravity" million sellers plan, planning to help 10,000 sellers around the world in the next three years, with annual sales exceeding one million US dollars.
The reason why it announced this plan is also because it has its own strength and capital.
With years of accumulated experience in brand building, marketing network resources and a wide range of global traffic bases, Shein provides sales channels for those merchants with brand power and operational capabilities, and helps more merchants and brands develop in the international market.
For small and medium-sized sellers who do not have experience in sales and operation of overseas third-party platforms, Shein also provides them with agency operation services, and sellers only need to focus on their own products;
In addition, Shein also provides merchants with a series of attractive policies, including free traffic support, lower commission rates than Amazon, etc.
At the same time, it has also formulated a full life cycle growth support system for merchants from training, operation support, performance, financial settlement to comprehensive capabilities.
Shein does all this to benefit others and itself, while helping third-party merchants, it is also seeking more possibilities for itself in the increasingly fierce market competition.
Whether it is the continued operation of its own brand, the expansion of the platform to all categories of services, or the development of more third-party merchants to further seize more merchant resources, it can help Shein better expand its monetization model.
With a series of measures, Shein has become the largest cross-border e-commerce in China, and Xu Yangtian himself quickly ranked 79th on the "Hurun Report" with a net worth of 50 billion yuan, becoming a generation of upstarts.
This year, Xu Yangtian was 39 years old.
However, Shein, who has been singing all the way, has not had an easy time.
In April 2022, Shein secretly raised a round of financing of at least $1 billion. After this round of funding, it was valued at a whopping $100 billion.
But in March 2023, the valuation of the financing was only $64 billion, a decrease of $36 billion in less than a year.
Secondly, Shein has also been involved in infringement disputes with fashion brands and independent artists on several occasions.
More seriously, external competitors are trying to outdo it.
PINDUODUO'S TEMU HAS TAKEN THE WORLD BY STORM WITH ITS LOW-PRICE STRATEGY, AND IN DECEMBER 2023, THE NUMBER OF UNIQUE VISITORS TO TEMU HAS REACHED A STAGGERING 467 MILLION.
AliExpress, a subsidiary of Alibaba, is also developing rapidly, with orders in the Middle East increasing by 40% month-on-month in 2023.
Not to mention, there are also mature cross-border e-commerce bigwigs such as Amazon and Lanting Jishi.
It is certain that the competition will be more intense, and whether Shein can continue to run wild in the future will leave Xu Yangtian with many challenges.
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Resources:
Fortune List: 2023 Fortune China's 40 Under 40 Business Elites
Tiantian Finance 116: Shandong's "new richest man in Zibo": The post-80s generation started a business from scratch and made more than 330 billion unicorns in 9 years
Chinese Business Elite Circle: Shandong Zibo people: only 39 years old, raising a 450 billion unicorn
Cui Cui talks about cross-border e-commerce: AliExpress wants to increase traffic in the Middle East market!
Global Tiger Finance: Dismantling Fashion E-commerce SHEIN: How Does a Billion-Dollar "Hidden Unicorn" Make Venture Capitalists Make a "Thousand Times"?
Author: Mu Lin
Editor: Willow Leaf chatter