Guest Mark Schaefer and Amanda Russell break down the biggest revolution in retail since Amazon, discussing the rise of Chinese fashion brands Shein and Temu. They explore the unique business models and success factors of these eCommerce platforms, while also delving into the complexities of consumer behavior, ethical concerns, and unconventional pricing strategies in the fashion industry.
Shein and Tumu have revolutionized retail by breaking traditional marketing norms and subverting expectations.
Despite their success, Shein and Tumu face ethical and environmental challenges that may impact their long-term sustainability and reputation.
Deep dives
The Rise of Shein and Tumu in the Fashion Industry
Shein and Tumu, Chinese e-commerce companies, have rapidly gained dominance in the fashion scene, surpassing well-established brands. Shein, known for its fast fashion, releases over a thousand new items per day, meeting consumer demand and synthesizing trend data. Tumu operates as a marketplace, providing a wide range of home goods and has over 6,000 merchants. Both companies offer exceptionally low prices, attracting customers with limited budgets. They heavily rely on massive advertising campaigns on platforms like Facebook and TikTok to drive brand awareness and reach. Their digital strategies focus on image-based marketing with minimal product descriptions. These companies also prioritize customer loyalty, utilizing vast quantities of customer reviews, offering various upsells, downsells, and cross-sells, and implementing a robust rewards program. This approach, alongside their immersive e-commerce experiences and recommendation algorithms, helps foster a strong sense of community, engagement, and addictiveness, keeping customers loyal and hooked on their platforms.
Ethical Dilemmas and Environmental Concerns
Despite their success, both Shein and Tumu face ethical dilemmas and environmental concerns. Shein, in particular, has been rated poorly for its environmental practices and worker conditions. Reports have exposed sweatshop-like conditions, with long working hours and low wages. The company has responded by inviting people to inspect their facilities, although conflicting reports and allegations persist. These ethical and environmental concerns, alongside the disposable fast fashion culture they perpetuate, may impact their long-term sustainability and reputation, especially since a significant portion of their customer base characterizes themselves as environmentally sensitive or environmentalists. The tension between low prices, customer loyalty, and sustainability creates a complex challenge for these companies moving forward.
Digital Marketing Strategies and Counterintuitive Approaches
Shein and Tumu have embraced counterintuitive approaches in their digital marketing strategies. They prioritized voluminous inventory updates, releasing new items each day to appeal to consumers' desire for fresh fashion. Another counterintuitive approach is minimalistic product descriptions and poor ad quality, focusing more on images and user reviews as influential factors. Both companies leverage massive advertising campaigns on platforms like Facebook and TikTok, driving brand awareness and expanding their reach. Their success is partially attributed to user-generated content, with customers becoming advocates and creating reviews and content. Consequently, they establish strong customer loyalty by providing continuous value, offering upsells, downsells, and cross-sells, and implementing reward programs to incentivize repeat purchases. Their ability to thrive while subverting traditional marketing norms, such as prioritizing premium experiences or SEO optimization, is notable.
The Future of Marketing and the Role of AI
Shein and Tumu's unique approach to marketing and rapid rise in the fashion industry reflect the evolving landscape shaped by AI technology. The ability to synthesize vast amounts of consumer data, predict trends, offer personalized recommendations, and optimize manufacturing processes has allowed these companies to disrupt traditional fashion marketing. As AI continues to advance, more opportunities for creativity, productivity, and unforeseen possibilities within marketing will emerge. The rise of Shein and Tumu showcases the power of digital strategies, community-centric approaches, and the ability to leverage technology to transform consumer experiences and dominate the fashion market.
If it seems like Shein and Temu have taken over the world overnight, you would not be wrong. These leading retail brands came out of nowhere by seemingly breaking all the rules of marketing. Mark Schaefer and Amanda Russell break down the biggest revolution in retail since Amazon!
Mark Schaefer is a strategy consultant, college educator, keynote speaker, and the author of 10 books including "KNOWN," “Belonging to the Brand,” and "Marketing Rebellion." His annual marketing retreat is The Uprising.
For more of Mark’s insights every week, subcribe to his award-winning blog.
Amanda Russell is the founder of the Global Center for Influence (C4In), launching (2023) at the University of Texas at Austin with a mission to help brands & people learn how to position themselves and their companies for success, bridging the gap between academia and practice. Amanda's mission is to enhance how we do 'higher education.
Former Olympic-level athlete, Founder-to-sale Entrepreneur and Marketing Consultant who still loves the brain gymnastics of helping people and companies become more influential among their desired audience. Professor, Author "The Influencer Code", Speaker, Board Member and Director of C4In
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