Is Shein’s Marketplace Bad News For Amazon and Other Retailers’ Platforms?

Shein earlier this month announced the launch of its U.S. marketplace after successful rollouts in Mexico and Brazil.

The online retailer is opening its platform to third-party domestic and international sellers as it expands product offerings “to meet increasing demands for product variety.”

Third-party sellers on the Shein platform will gain access to the millions of Gen Z customers who use its apps to shop for low-price fashion merchandise. Shein’s app consistently ranks among the most downloaded from Apple and Google.

A Bloomberg Second Measure report from earlier this year showed Shein’s share of the U.S. fast fashion market going from 12 percent in January 2020 to 50 percent in November 2022. Shein today holds a greater share than H&M (16 percent), Zara (13 percent), Fashion Nova (11 percent), Forever 21 (six percent) and Asos (four percent).

Statista only puts Macy’s ahead of Shein for U.S. online apparel sales. Gap, Walmart and Kohl’s trail behind.

“Shein is committed to delivering the best shopping experience for customers and empowering the communities where we operate while doing so,” Sky Xu, Shein CEO, said in a statement. “By bringing new sellers onto Shein Marketplace that are aligned with our vision of making the beauty of fashion accessible to all, we are creating increased value for our customers while enabling local businesses to grow with us.”

Shein’s marketplace will compete with Amazon.com, Macy’s, Target and Walmart for more than just customers. The digital seller’s platform will also vie for sellers currently established on other marketplaces.

Market Pulse reports that Shein has added Anker, an Amazon aggregator with over $1 billion in annual sales. Anker, which started selling electronics on the Amazon platform in 2011, has expanded to other marketplaces. Sales on Amazon now represent about half of Anker’s total, down from 80 percent in 2016.

Some Anker products sold on Shein were less expensive than those on Amazon, according to Market Pulse. The article speculated that this could be a  decision from Anker based on lower selling fees from Shein or a promotion funded by the platform. Shein is not charging a selling fee to sellers for the first three months. Its price after that is 10 percent lower than Amazon’s.

It’s unclear whether Shein will make its growing distribution center space available to third-party sellers.  The company operates a 1.5 million square foot warehouse in Indiana and is building a similar facility in California, Peter Pernot-Day, global head of strategy and corporate affairs, told RetailWire in an interview last month.