Dive Brief:

• Fast fashion has supposedly slowed down, but Chinese player Shein is winning over Gen Z with a level of newness that entails "analyzing customer data to inform new designs within as little as three days" and adding more than 1,000 new styles daily, according to research from retail analytics firm Edited.
• The DTC company is also beating fast-fashion stalwarts like Zara and H&M on price, and despite sluggish overall apparel sales last year, grew its own sales 250% year over year to $10 billion, Edited said.
• Another differentiator is how Shein caters to the plus customer: Its "curve + plus" styles are 16% of its assortment, compared to 9% at Forever 21, according to the report.

Dive Insight:

Shein founder and CEO Chris Xu's expertise in SEO and brand marketing "are key factors in Shein's rise to dominance," because the brand latches onto the styles that go viral on TikTok, where it boasts 2.1 million followers and gets 3 billion views of its #Sheinhaul videos, according to Edited analyst and report author Kayla Marci.

But its supply chain is also agile, with a "close proximity and strong relationship with its small-to-mid-sized factories that pick up orders daily," which allows "for small units to be placed," Marci said. As a result, 70% of Shein's assortment is less than three months old, compared to 53% at Zara and 40% at H&M.

The brand keeps much of its focus on smaller, easier-to-churn items like accessories, which make up 21% of its assortment compared to 9% at Zara, and, with an average price of about $5, are cheapest among the major fast-fashion companies. But even its outerwear is priced at less than $30, less "than fast fashion heavyweights boohoo and H&M," per the report.

With prices and margins low, major fast-fashion players have been slow to e-commerce. But Shein, a mobile-first DTC company (taking over Amazon as the most downloaded app in the U.S.), has been able to escape the Trump-era tariffs by shipping directly from its factories, Edited found.

Meanwhile, the brand keeps customers spending with a plethora of discount codes.

While Gen Z is supposedly concerned about brands' environmental and social impact, that hasn't stopped Shein's rise despite accusations of cultural insensitivity and questionable sustainability, Marci noted. And while resale's rise may be a threat to fast fashion in general, according to several analysts, it's Shein's newness that appeals to these young consumers.

"In an era where retailers are desperately decoding what makes Gen Z tick, Shein just gets it," Marci wrote.