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Who’s Dominating Fast Fashion? It’s Not H&M Anymore

A company that’s openly exploited America’s de minimis loophole for its own abundant gains has a new jewel to add to its crown.

2021 has been a big year for Shein, but the trendy Gen Z darling now has another accolade to add to its growing list—fast fashion’s U.S. market leader.

Market share data from Earnest Research revealed that while Shein started the year with 13 percent of total fast fashion sales, the e-commerce company has since more than doubled that market share percentage to 28 percent as of June 16. The China-based brand saw sales grow approximately 160 percent in the period, the data analytics provider said.

In the process, Shein usurped H&M’s crown as the leader in fast-fashion market share, with the Swedish giant commanding 20 percent of U.S. sales, a 3-percentage-point decline.

Of the brands cited, Zara was the only other one that grew its share, from 9 percent up to 11 percent in the six-month span. During the same time, Forever 21 and Fashion Nova both dropped from 11 percent market share to 10 percent and 8 percent, respectively.

The “other” category took the largest collective hit, dropping from 34 percent of the market to only 23 percent of U.S. fast fashion sales within half a year. Brands within the “other” category including Asos, Boohoo, Charlotte Russe, Charming Charlie, Cotton On, Hot Topic, Missguided, PrettyLittleThing, Primark, Shein’s sister brand Romwe, Rue21 and Topshop.

Overall, the total U.S. fast fashion market grew 15 percent between January and mid-June, according to Earnest, so there’s still growing market opportunities particularly as pent-up demand for dresses and other social attire continues to increase.

Shein caught many off guard in May when various mobile app tracking firms revealed that the DTC brand topped the mobile download charts across shopping apps. Including all free apps, Shein is ranked 14th on iOS, six spots below Amazon but ahead of all other commerce apps.

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As of July 13, the retailer remains the top trafficked website across all fashion and apparel sites worldwide, beating out Nike and H&M for No. 1, according to analytics platform SimilarWeb. Shein carries the highest average visit duration as well in the top 20 ranked at 8 minutes and 34 seconds. The 21st-ranked site by traffic, French secondhand marketplace Vinted surpasses it at 11 minutes and 54 seconds per visit.

The growth has led to speculation about a potential public listing in the company’s future. In a surging IPO market, Shein would fit right in—it reportedly reeled in approximately $10 billion in sales in 2020, according to Chinese financial publication LatePost. The publication more recently reported that Shein earned as much as $2 billion in revenue in June alone.

And Shein seems to have found its stride with the high-school-aged and college-bound crowd. A Piper Sandler survey of 7,000 U.S. teens with an average household income of $76,750 found that the fast-fashion retailer ranked second after Amazon as their most popular shopping website.

Shein’s growth path is still shrouded in mystery, largely due to the increasingly quicker turns and deliveries within its supply chain, with new product releases coming in at a minimum of 1,000 per day, according to report from financial publication Nikkei Asia. The company has shortened the time from design of a new piece of clothing to mass production from two to three weeks to just five to seven days.

On top of the quick lead times, Shein now has more than 300 suppliers, Nikkei Asia reported. All suppliers use Shein’s proprietary supply chain management (SCM) software, improving visibility across all ends of the chain. These suppliers are willing to accept orders as small as 30 pieces, which enables Shein to test ideas cheaply.

All in all, this has driven prices down for the fast fashion brand, which sells sundresses for less than $10 and swimwear for under $15, among many other low-price categories that even outperform off-price retailers.

Shein is currently embroiled in lawsuits over trademark infringement, particularly due to launching products on its website that are visually similar to those of more expensive brands. Dr. Martens is the most recent major brand wrapped in IP litigation with the company, with manufacturer AirWair International suing Shein and Romwe for marketing, distributing and selling shoes and boots that are “direct and obvious copies” of 26 distinct Dr. Martens styles.

Despite selling in most major markets, Shein surprisingly doesn’t sell in its homeland of China. Shein focuses largely on women’s fashion, but also sells apparel, accessories and footwear for men and kids, along with items for pets.