In the fashion industry, every once in a while, a chain comes and it seems all the teenagers or young adults are buying something from that chain. If the company is public, then the valuation only goes up. At some point the company will mature, growth flattens and everyone asks what happened?

In an article by Sui-Lee Wee of the New York Times News Agencies, the hot company was the most talked about company in retail. After millions watched the Grammies or Academy Awards and whatever the women were wearing was in stores by Wednesday. Shein was that company that could spot what Generation Z wanted and they could buy it within days. Shein overtook Zara and H&M, however something has changed.

No Chinese company has been successful as Shein as going global. And yet the company remains unusually reclusive.

Shein has taken pains to distance itself from its Chinese origins. In 2019, it established its headquarters in Singapore and deregistered its original Chinese corporate a few years later. The aim was to navigate Chinese rules governing companies seeking offshore listings and clear a path toward an IPO in New York.

The strategy failed. In the US, Shein encountered intense bipartisan scrutiny from lawmakers over its supply chain and labor practices. After abandoning its New York listing effort to 2024, it turned to London, where it faced similar resistance from non-governmental orgainzations and protesters.

This left Hong Kong.

Shein first act was remarkable. Their secret was a system built to compress the traditional fashion cycle. Shein used algorithms to track emerging trends, then place initial orders for a few hundred units to test demand. The model allowed it to introduce 4,700 apparel styles a day, Zara by comparison, produces 20,000 a year.

Shein paired that technology with an industrial ecosystem in Guangdong where spinners, weavers, seamstresses and small factories could rapidly manufacturer orders as small as 100 pieces. Shien has tried to model the system in Turkey and Vietnam but has struggled. In addition, competition such as Temu arrrived with even broader product assortments and even lower prices.

What is the future? investors such as Juozas Kaziukenas, an independent e-commerce expert do not see a clear picture. Outside of the fact that early investors want to cash out, what is the next phase.

Shein has tried some other tactics such as making its system available for brands, but 20 brands have signed on, however that is only 1% of the total net revenue in 2025, after starting it in 2023.

Shien is branching out to non-apparel items which accounted for 1/3 of its revenue – furniture, cosmetics, pet products and electronics.

Linking to dividend paying stocks, one of the reasons why you are biased towards them is they have demonstrated long term ability to make profits. Businesses often sees fast risers, but sustainability is a different equation because companies often start off seeing a better way or less expensive way or to reduce the margin of larger companies. There is always another company looking to do it less expensive, it is harder to be in a market where margins can rise or be stable. There is a reason why to like companies that can pay dividends for years – they have adaptability.

There are more questions than answers, till the next time – to raising questions.