The Marketing Bestie Podcast with zoeunlimited - SheIn is LUXURY now?

Episode Date: December 5, 2024

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Or is that Miss Kylie Jenner? working with Sheehan. Sheenho? $800. $900. $900.000. $1,000 shain order. How does Sheehan, a Chinese company

that never sold a single piece of clothing in China, make over $32 billion of your money? Guys, shopping off Shian can no longer be considered embarrassing because what are these prices? Call me cheap, call me whatever you want, but this is not the Shian, I know. This really isn't a flex.

Is this not? Is this allowed? Chris Jenner, where are you? Two years ago, I made a video about the scary rise of Sheehan, and wow, have things changed since. Not only are they selling premium clothing now, did a fashion show, expanding to office supplies, getting more popular on social media,

but also still emailing me for collabs. I am so honored, but please stop contact me every few weeks, and please stop referring to me as a Sheehan stuff. Before we get into the dive, this video, this video is not to shame anybody who shops at Sheehan or anywhere else. I do marketing deep dives every Thursday on this channel and on podcast networks. And wow, dare I say, when marketing is manipulated with shady intentions, it gets really scary. You know what it never was?

That serious. It was never that serious. This is literally half the size of me. So if you enjoy this dive, I kindly ask you to rate and share this episode to to share the impact. As your marketing bestie, who graduated top 1% UCLA business economics

with a background in marketing, we're going to explore the aggressive marketing behind how Sheehan makes $30 billion a year from teenage girls. It's long list of shady practices. They're desperate rerun to a luxury route. Did you know you could get all these sparkles from Sheehan? Because they know they will be replaced soon.

And despite how being a billion dollar brand, A company without ethics will be devalued as cheap as their clothes. From 100 billion to 66 to 45 and eventually cheat itself to death. Just like the downfall, a wish. And by brand, I don't just mean stealing other brands designs and calling it your own. This is my bra and this is Sheen's bra. This is my leggings, note the pattern down the side. And this is Sheen's leggings, note the pattern down the side.

Branding is about how your future college, future boss, future boyfriend sees you. And I'm creating this series to analyze pop culture influences including brands from a marketing perspective. Because many of whom do not recognize the power of influence they have over a generation of young girls. So here's the story of how Sheehan is doing everything I can to go public to save itself from its events. eventual death from its terrible brand, but cannot because of a terrible brand. Being an adult has its high points, like you can eat ice cream for dinner anytime, or go to bed however early or late, but it's not all fun. You also have to figure out what's for dinner every freaking night, do your taxes, and make your own doctor's appointments, and for that

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best adulting hack. That's ZO-C-D-O-C.com slash unlimited. Zocdoc.com slash unlimited. Pivoting to something less healthy. The only reason I'm filming this hall is so that I can be held accountable, they put this stuff away. First, how does Sheehan? A Chinese company that does not sell a single piece of clothing in China make over $32 billion of your money. Well, what is Sheehan? Sheehan, a global online retailer, sells no longer just $1,000,000. fast fashion, but real time fashion.

Pumps out up to 10,000 new items daily. For your reference, Zara releases 500 new designs every week. Most of your clothing, beauty, and lifestyle products are still priced between $5 and $25. That is 30 to 50% less than comparable prices at Zara or H&M. So how in the world do you make $32 billion dollars a year selling $5 t-shirts when your The net profit margin is only 5%, meaning you only make 50 cents per every $10 shirt you sell. I have a piss kick. SpongeBob, that is fucking just as get me too. While paying an army of influencers and affording everyone from the real housewife Addison

Ray to Chloe Kardashian to Katie Perry. Before we dive deep into the manipulative marketing strategies of Sheehan, we need to first understand how do they afford all their expectations? expensive marketing, which points to four shady and even illegal tactics that power their marketing budget. First, design. You already know this. How many humans are needed to come up with 10,000 original designs a day? Last time I checked, they barely have 10,000 employees. And I don't think all of them are sitting in front of a screen pumping out new styles all day. Imagine waking up one day to find that your design is being sold on Sheehan for $1.00. with your photo and logo removed. I knew the day would come, but I am still astounded.

They must have people scouring every corner of the internet for designs to steal because my brand the vault is a tiny brand here in Australia. And this just happens so, so often that the real question is, which of the designs on Sheehan are actually original? My dear friend Cassie or Blagalotti's creates one of my favorite at Leisure brands, Popflex, which I'm wearing right now to support. amazing quality, super innovative, and so much work put into the product. Has her viral pirouret squirt worn by Taylor Swift even stolen by Sheehan.

And not just the design. But Sheehan even tried copying the photo, the styling, and the model. Wow, great! So they don't even need to pay a single cent to design this massive collection. But guess what else saves costs? Labor. Are their workers still working 75-hour shifts? a week?

Yes. Is Sheehan still paying $20 daily salary that will be docked by $14 if any garments had mistakes? Yes. Sure, living costs are much lower in certain regions in China. So the $20 salary might actually meet the local minimum wage law. But the cost saving continues. Guess where else they could find some marketing dollars from? The materials.

This is to wish it! So I ordered a new bathing suit from Sheehan. I noticed it came broken. Crotch stains Disgusting Do I trust that there are certain products from Sheehan that you can wear for life and pass down to your grandchildren? Um, maybe. A lot of time machine quality isn't really good, but these are items that I've literally had for over a year.

But because Sheein exists to satisfy a demand for microtrends, may I argue nanotrends now, that are changing. Every 30 minutes, thanks to TikTok. They never intended their close. their clothes to last after a few washes. They ripped on me midsats. Honey, it was ruined when she bought it. The cheap synthetic fabric and potentially toxic chemicals are meant to be thrown out. Make sure it's all low.

So best believe when she makes a brand about making fashion affordable for everyone. They're not thinking about your financial health by encouraging you to buy 10 tops for $7, but will be thrown out after two washes. And one of their sneakiest cost saver is tax loophole. Now, why does Xi Yan, a Chinese company, never sell in China? And how did it surpass both Zara and H&M in revenue? First, what are the commonalities between Xi and Zara H&M other than the fact that they're known as fast fashion brands?

That one of their biggest markets is the US. And why does that matter? Well, Sheehan found a tax loophole and is crushing its competitors through this. The de minimis exemption's original purpose was to allow tourists who bought gifts abroad to avoid paying a fee when they return home now capped at $800. But Sheehan is like what a great opportunity. Since none of Sheehan is made in the US, they just need to individually ship out the packages to their customers and not pay the taxes because who is buying over $800 of Sheehan anyways.

And it was $5. So there is no way for an original design local fashion label to compete with this mass producing company. Cutting costs in materials and by directly copying designs, on top of which has a huge tax loophole advantage. Plus focuses a huge part of their digital marketing on micro-influencer strategy, where they don't even pay these influencers and send them a bunch of quote-unquote free products that aren't worth that much to begin with, allow them to make a 10 to 20% commission but pump out an aggressive amount of free She and Hall content, targeting young demographic who are highly influenced by price,

and trends and essentially has no-cost influencer marketing. With all these saved costs, you now have a huge pile of cash for aggressive marketing. To tailor your search and display ads to young people by featuring ads of college students. Use giveaways and challenges to incentivize more customers to post and tag them, aka more free UGC, free marketing, and paying high dollars to celebrities and influencers, influencers for endorsement. I love evolving my style to express myself. Together, we are the evolution.

Sure. Money buys your marketing. It buys you ads on people's feeds. It buys you access to certain influencers. It even buys you a reality show with Chloe Kardashian, the Sheehan 100k fashion challenge that supposedly invests in up-and-coming original designers. To quote, offset recurring infringement issues within the industry. But money.

cannot buy you brand. So far, the brand of Sheehan has been nothing but cheap, shady, and poor quality. There is an inherent shame around the brand where unlike a positive brand that increases a product's inherent value, for example, a Chanel bag that costs 10,000 but only takes $300 to make. The reverse is true for Sheehan, where it could be a perfectly good quality cute shirt, but saying that it was from Sheehan decreases the value as if it were found in. a dumpster and every celebrity or influencer that Sheehan uses to save their brand hoping to rub off

of their positive associations only backfires by cheapening the brands of these influencers and that's a major problem for Sheehan because what is the business model of Sheehan making only 50 cents on every $10 shirt they sell how many cheap shirts do they need to sell in order to maintain that $30 billion annual revenue. The minute the volume declines, they will go bust. And sure, you can keep creating micro-trends and copying other trendy designs, but eventually the demand for Sheehan will slow down. Because not only is there no brand loyalty, there's also a lot of shame around the brand. The only reason someone will buy Sheehan is for its price. And that's a way to out-compete a company to death. Because with zero brand loyalty, the second that achieved,

where alternative appears like Timu, it's going to be a war of who can have the lowest price. The price elasticity is extremely high, and it will downward spiral into a perfectly competitive market where no one makes any money. If you take Sheehan and Zara as two case studies, Sheehan made $32.5 billion in revenue, while Zara did $26.5 billion in 2023. But if you look at net profit, Sheen made $2 billion, impressive, but Zara did $1,000. 5.9 billion. While both are huge numbers, Zara has a much more elevated brand where yes, they are relatively affordable, but they don't need to compete to the death in pricing. Whereas

for Sheehan, the minute the tax law changes, the minute they get suit to a point where they can't just get free designs by copying, the minute that a competitor is able to beat them in price, which is already beginning with the Sheehan Timu wore, their net profit margin is only getting thinner and thinner where yes they can have a huge inflated revenue but essentially makes no money. Their only hope now is to go public and take the investors money. Sheehan could be ready to start trading on the public markets as soon as 2024. Because this soulless volume pumping machine might be able to fight one TEMU but not 10 TAMUs. But guess who is having the hardest time IPOing because of a shady and controversial brand?

And that's the aftermath of creating an empty giant brand with no trust. Associated with stealing, scamming, and disregarding human rights, that Sheehan became a household name because it is embarrassing. Disgusting, disgusting. Hence, Sheehan is in a major branding crisis where they are trying everything and anything to rebrand and do something more quote-unquote elevated by launching their premium collection, trying to save their PR by working with independent designers, and luring luxury brands like Stuart Weitzman and Paul Smith to sell their products on the marketplace,

which now only makes me perceive Stewart Weizmann as cheaper than it was, because the negative associations of the Sheean brand synonymous with cheap is so much stronger than the diminishing positive branding of Stuart Weitzman. And just increasing the price won't do it, because people aren't there for the premium quality, but for the dirty cheap price. And working with a few independent designers won't cover the fact that they are still stealing designs and are still having unethical labor and material issues, and people are still disgusted by its track record brand of shadiness, which means any established brands. Either fashion labels or pop culture influencers who don't align with its value will run as far away from Xi'an as possible. Just take the telltale sign of wish, which also sewed these ridiculous,

low-priced items like a wedding dress for a dollar, the company was once valued at $14 billion, then sold at $173 million. Sound familiar? Because the sheean valuation was topping $100 billion, then slumped to $66 to $45. And with price competitors like Timu and more upcomers entering the market, eventually it will play this unethical price-cutting game until it bleeds itself out. Just like the micro-trends that it capitalizes on, Sheen itself won't live too long without actual and repeated genuine actions to rebuild the brand. The brand of trust. Like the environmentally damaging sweatshop clothes that end up in the dumpster,

that's the only possible ending for our soulless company without boundaries or brand. Again, this is not to shame anybody who shops at Sheehan or anywhere else, where I do understand that not all low-priced items have terrible quality or are unethically made. I still wear some of the most affordable things I got since high school up to this day. But Sheehan's brand of affordability or fashion for everyone is very hypocritical. Because there is nothing affordable about most things breaking after one to two washes, so you have to keep buying and keep spending money. It is estimated by Harvard Business Reviews that Sheen alone ships two to three billion items a year.

You guys, there are only 8 billion of us on this planet. It really scares me the impacts we have on our home. And when Sheian dies, there will be a Timo, a She Out, and so on. This episode is a little different, but to wrap up a very important message to take away is that a brand only exists in people's minds, in our minds. We as consumers hold way more power to a trend or an industry than we think. So don't give up that power. This is your marketing bestie, Zoe Unlimited.

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