Shein’s rapid rise in Southeast Asia could topple ecommerce giants

In Shinsaibashi, Osaka’s main shopping district, a two-story Shein pop-up sits conspicuously in a space once occupied by Japanese retailer Uniqlo. Right across the street is a branch of the Swedish brand H&M.

It’s a reminder of Shein’s rapid ascent to the top, cementing its place among longtime stalwarts of fast fashion.

Shein’s pop-up store in Singapore / Photo credit: Melissa Goh / Tech in Asia

Founded in China but headquartered in Singapore, Shein catapulted into the media spotlight in the past year and saw its valuation soar to US$10 billion at one point. The ultra-fast fashion firm is expected to hit US$20 billion in gross merchandise value (GMV) this year, with sales closing in on OG fast-fashion retailers like H&M and Spanish label Zara.

Shein’s dirt-cheap, trendy apparel appeal to price-sensitive and trend-seeking customers – particularly in the West, among women aged between 18 to 35. Never mind its long shipping times and poor quality as well as a patchy environmental and social record at best.

In Southeast Asia, however, Shein’s price advantages quickly erode. For one, labor costs in the region can be a fraction of that in China, where the company produces a bulk of its clothing. Many Chinese sellers are already peddling goods to consumers, not just on regional marketplaces like Shopee and Lazada but also on short-video app TikTok‘s shopping feature.

But that’s not stopping Shein from trying its luck.

This year, Shein has rolled out pop-up stores in Bangkok, Manila, and Singapore. The fourth run of its pop-up store in the city-state – located just a stone’s throw from the famous Orchard Road shopping district – ended this week.

In 2021, Shein was the official clothing sponsor for Miss Universe Philippines. The following year in October, the company named popular Filipino actress Belle Mariano as brand ambassador.

Photo credit: Belle Mariano’s Instagram

Shein has identified Southeast Asia as a significant growth market, Leonard Lin, Shein’s general manager for Singapore, tells Tech in Asia. Specifically, the company is targeting Singapore, the Philippines, Thailand, and Malaysia.

Like in the West, Shein sees “a strong demand for value-for-money products” in the region, “driven by younger demographic groups,” adds Lin, who is also the firm’s global head of government relations.

Rising in prominence

Southeast Asia is a small but growing market for Shein, which ships to over 150 countries and territories – mostly to the Western and increasingly to pockets of Latin America. Between September to November, the US made up the bulk of traffic (36%), according to SimilarWeb data.

Solving the “logistics problem”

What are Shein’s chances?