Chinese-owned fast-fashion giant Shein has entered the world of e-commerce with the addition of a new third-party marketplace feature. The marketplace, known as Shein Marketplace, was launched in May and offers a wide range of products from third-party sellers, including home appliances, pet supplies, and high-end shoes.
However, Shein has set a high bar for brands interested in selling on its platform. According to The Wall Street Journal, brands must first achieve $2 million in annual sales on Amazon before they are eligible to sell on Shein. This requirement ensures that only established and successful brands have the opportunity to showcase their products on the platform.
Despite the high entry barrier, Shein is offering attractive incentives to entice brands to join its marketplace. Sellers who meet the sales criteria can enjoy free advertising and no commission for the first three months, as reported by The Wall Street Journal. These incentives aim to make the transition to Shein Marketplace more appealing for brands and encourage them to take advantage of the platform’s growing customer base.
In an interview with The Wall Street Journal, Shein’s head of strategy, Peter Pernot-Day, expressed the company’s goal of finding third-party sellers that complement their existing product offerings and resonate with their customer base. This strategy allows Shein to expand its product range and appeal to a broader audience by incorporating high-end brands such as Paul Smith and Stuart Weitzman.
Since its marketplace launch, Shein has faced some challenges. Sellers offering counterfeit items have been discovered on the platform, raising concerns about product authenticity. In addition, social media users called out the company for selling fake Air Jordans in June. These incidents highlight the need for robust seller vetting processes and tighter controls to maintain the integrity of the marketplace.
Despite these challenges, Shein’s growth in the United States has been remarkable. According to data from market research firm Euromonitor International, Shein achieved an estimated $8 billion in annual sales in the US in 2022, reflecting its strong presence in the fast-fashion industry.
The expansion into the third-party marketplace marks a significant step for Shein as it diversifies its product offerings and opens up new opportunities for businesses. By incentivizing brands to sell on its platform, Shein aims to strengthen its position in the e-commerce market and continue its growth trajectory.