China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>AMZN/PDD/ Shein:  Amazon temporarily display the same discount and coupons (-)</li>
<li>FUTU: HK stock turnover remains lukewarm, while Futu is gaining market share in HK（-）</li>
<li>PDD/Shein: TikTok launching “Mall” and “fully managed” model in the USA and UK (-/-)</li>
</ul>


AMZN/PDD/ Shein:  Amazon temporarily display the same discount and coupons (-)
FUTU: HK stock turnover remains lukewarm, while Futu is gaining market share in HK（-）
PDD/Shein: TikTok launching “Mall” and “fully managed” model in the USA and UK (-/-)


AMZN/PDD/Shein/FUTU/TikTok: TikTok Launching “Mall” and “fully Managed” Model in the USA and UK

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>E-commerce /In Depth: Chinese fast fashion platforms could be next U.S. target</li><li>Sentiment /: British firms ‘conditionally optimistic’ about their China operations in 2023</li><li>AIDS /: HIV/AIDS cases in China fell 13% during pandemic, expert says</li></ul>

E-commerce /In Depth: Chinese fast fashion platforms could be next U.S. targetSentiment /: British firms ‘conditionally optimistic’ about their China operations in 2023AIDS /: HIV/AIDS cases in China fell 13% during pandemic, expert says

CX Daily: Chinese Fast Fashion Platforms Could Be Next U.S. Target

<ul>
<li>Many newcomers are trying to replicate Shein’s path, but none has proven to be successful, as Shein’s moat in supply chain requires longterm down-to-earth work. </li>
<li>PDD’s Temu will be Shein’s biggest challenger because it is pursuing a different model. Instead of penetrating into the supply chain, Temu offers value-for-money, fair quality products from all categories.</li>
<li>Although Shein’s foundation remains solid (ladies’ apparel + developed countries), growth is slowing down. We reiterate BUY to PDD and BABA and SELL to SE and VIPS after studying Shein.</li>
</ul>


Many newcomers are trying to replicate Shein’s path, but none has proven to be successful, as Shein’s moat in supply chain requires longterm down-to-earth work. 
PDD’s Temu will be Shein’s biggest challenger because it is pursuing a different model. Instead of penetrating into the supply chain, Temu offers value-for-money, fair quality products from all categories.
Although Shein’s foundation remains solid (ladies’ apparel + developed countries), growth is slowing down. We reiterate BUY to PDD and BABA and SELL to SE and VIPS after studying Shein.


Shein Deep Dive:Imitators Perish; Differentiators Flourish

Research on Tech Companies

Evelyn Zhang

Private Capital Markets

<ul>
<li>SheIn targets women aged 18-35 with below average income; they are more sensitive to the price (Shein’s products are $9-24) and are less demanding in terms of shipping time (over 2 weeks) and quality; sensitive to fashion trends (3000 new SKU every day, 7-8 days design to shelf time).</li>
<li>The sales growth is driven by the increase in order volume and high users retention rate;</li>
<li>SheIn is adopting the C2M model in which customers interest and feedback directly influence the production.</li>
<li>SheIn uses offline buyers and trawls online influencers to capture fashion trends, then designs products based on the information to create bestseller products.</li>
<li>SheIn has in-depth cooperation with 2,000-3,000 small and medium-sized manufacturers (including 300 core suppliers), 100 fabric suppliers in Guangzhou to establish a fast response supply chain.</li>
<li>SheIn adopts a "small order quick turnaround" production model, that is, each product has only about 100 pieces of initial order, and then put on the market for testing, and feedback, and iterate by launching new products every day</li>
<li>SheIn built its own supplier management system to coordinate long-term cooperative suppliers. SheIn can access detailed production line information from suppliers, including textile type, the personnel status, the current fabric and dye inventory level, production capacity etc.</li>
</ul><ul>
<li>SheIn started online influencer &amp; celebrity marketing in 2011, by providing commissions/exclusive discounts/payments cooperation, now inviting internet celebrities to live broadcast on unboxing, try on, review etc.,</li>
<li>Thanks to the company's brilliant marketing and dominant position, the marketing expense ratio from 2017 to 2019 has decreased YoY to 28.5%, 26.2%, and 17.5%, respectively.</li>
</ul>


SheIn targets women aged 18-35 with below average income; they are more sensitive to the price (Shein’s products are $9-24) and are less demanding in terms of shipping time (over 2 weeks) and quality; sensitive to fashion trends (3000 new SKU every day, 7-8 days design to shelf time).
The sales growth is driven by the increase in order volume and high users retention rate;
SheIn is adopting the C2M model in which customers interest and feedback directly influence the production.
SheIn uses offline buyers and trawls online influencers to capture fashion trends, then designs products based on the information to create bestseller products.
SheIn has in-depth cooperation with 2,000-3,000 small and medium-sized manufacturers (including 300 core suppliers), 100 fabric suppliers in Guangzhou to establish a fast response supply chain.
SheIn adopts a "small order quick turnaround" production model, that is, each product has only about 100 pieces of initial order, and then put on the market for testing, and feedback, and iterate by launching new products every day
SheIn built its own supplier management system to coordinate long-term cooperative suppliers. SheIn can access detailed production line information from suppliers, including textile type, the personnel status, the current fabric and dye inventory level, production capacity etc.

SheIn started online influencer &amp; celebrity marketing in 2011, by providing commissions/exclusive discounts/payments cooperation, now inviting internet celebrities to live broadcast on unboxing, try on, review etc.,
Thanks to the company's brilliant marketing and dominant position, the marketing expense ratio from 2017 to 2019 has decreased YoY to 28.5%, 26.2%, and 17.5%, respectively.


SHEIN Is In- Gen Z’s Own Fast Fashion Revolution

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Shein is a monster e-commerce company based in China. Shein is the fastest growing e-commerce company in the world. The company generated nearly $10 billion in revenues in 2020, up nearly 250% YoY. Shein could realistically overtake Zara in terms of revenues by 2022. Shein's core business model is to sell clothing (mostly women's apparel) online to the younger generation consumers in the US, Europe, and other parts of the world. <a href="https://techcrunch.com/2021/06/22/why-amazon-should-pay-attention-to-shein/" target="_blank" rel="noopener">Shein</a> is especially popular among the budget conscious younger generation in the Americas, Europe, and Asia (excluding China). The following are the key competitive advantages of Shein:<ul>
<li>Superb execution of "art of trend setting" in apparel products</li>
<li>Extremely attractive pricing</li>
<li>Faster adoption of new fashion styles</li>
<li>Aggressive promotions through influencers and discount codes</li>
<li>Effective use of data analytics and technology</li>
<li>Capitalize on the tax loop holes between the US and China</li>
</ul>The tremendous growth of Shein and other pure-play fashion companies have had major negative impact on some of the largest apparel companies with signficant brick and mortar operations such as <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a>, <a href="https://www.smartkarma.com/entities/gap-inc-the" target="_blank" data-smartkarma-citation="entities:7941:1" rel="noopener">Gap Inc/The (GPS US)</a>, and <a href="https://www.smartkarma.com/entities/industria-de-diseno-textil-sa" target="_blank" data-smartkarma-citation="entities:21278:1" rel="noopener">Industria De Diseno Textil Sa (ITX SM)</a>.

Shein is a monster e-commerce company based in China. Shein is the fastest growing e-commerce company in the world. The company generated nearly $10 billion in revenues in 2020, up nearly 250% YoY. Shein could realistically overtake Zara in terms of revenues by 2022. Shein's core business model is to sell clothing (mostly women's apparel) online to the younger generation consumers in the US, Europe, and other parts of the world. Shein is especially popular among the budget conscious younger generation in the Americas, Europe, and Asia (excluding China). The following are the key competitive advantages of Shein:
Superb execution of "art of trend setting" in apparel products
Extremely attractive pricing
Faster adoption of new fashion styles
Aggressive promotions through influencers and discount codes
Effective use of data analytics and technology
Capitalize on the tax loop holes between the US and China
The tremendous growth of Shein and other pure-play fashion companies have had major negative impact on some of the largest apparel companies with signficant brick and mortar operations such as Fast Retailing (9983 JP), Gap Inc/The (GPS US), and Industria De Diseno Textil Sa (ITX SM).

SHEIN: The Fastest Growing E-Commerce Company in the World & Ready to Overtake Zara in 2022?

Hong Kong

Zoetop Business Co., Limited, doing business as SHEIN, operates as a fashion e-commerce platform. The Company focuses on women's wear, men's apparel, children's clothes, accessories, shoes, bags, and other fashion items. SHEIN serves clients worldwide.

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SHEIN (1895674D HK)

AMZN/PDD/Shein/FUTU/TikTok: TikTok Launching “Mall” and “fully Managed” Model in the USA and UK

AMZN/PDD/ Shein: Amazon temporarily display the same discount and coupons；FUTU: HK stock turnover remains lukewarm；PDD/Shein: TikTok launching...

Blue Lotus Research Institute

CX Daily: Chinese Fast Fashion Platforms Could Be Next U.S. Target

E-commerce /In Depth: Chinese fast fashion platforms could be next U.S. target Sentiment /: British firms ‘conditionally optimistic’ about their...

Caixin Global

Shein Deep Dive:Imitators Perish; Differentiators Flourish

A deep dive into Shein, one of the largest fashion retailers in the world. We give a detailed breakdown to some of the key metrics, and reveal...

Blue Lotus Research Institute

SHEIN Is In- Gen Z’s Own Fast Fashion Revolution

Fast fashion new king SHEIN combined integrated manufacturing, data science, world class supply-chain and influencer marketing, and created a fast...

Evelyn Zhang

SHEIN: The Fastest Growing E-Commerce Company in the World & Ready to Overtake Zara in 2022?

Shein is the fastest growing e-commerce company in the world. The company generated nearly $10 billion in revenues in 2020, up nearly 250% YoY....

Douglas Kim

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